Markets Wired

The Federal Trade Commission has asked a U.S. district court to hold three Internet pagejackers in contempt and order them to give up their ill-gotten gains for violating a previous order barring their unfair and deceptive practices.

According to papers filed by the FTC with the court, Walter Rines, his company, Online Turbo Merchant, Inc., and his business partner, Sanford Wallace, diverted users of MySpace.com to different Web sites and barraged them with ads to earn advertising commissions. The agency alleged that the defendants targeted MySpace users with “phishing,” “pagejacking,” and “mousetrapping” tactics in violation of a previous federal court order.

In October 2005, the FTC charged Odysseus Marketing, Inc. and its principal, Rines, with luring consumers to their Web site by offering free software including a program that supposedly allowed them to engage in anonymous peer-to-peer file sharing. According to the FTC, the bogus software was bundled with spyware that intercepted and replaced search results and barraged consumers’ computers with pop-up ads. The FTC alleged that the defendants’ software captured consumers personal information and transmitted the information to the defendants’ servers. Consumers were unable to locate or uninstall the spyware through reasonable means, the agency charged. The court ordered a preliminary halt to these practices pending trial, and in October 2006 Odysseus and Rines settled the charges by stipulating to a permanent injunction.

The permanent injunction prohibits the defendants from redirecting consumers’ computers to sites or servers other than those selected by the consumers; from changing any Web browser’s default home page; and from modifying or replacing the functions of any computer application. It requires them to obtain consumers’ express consent before downloading or distributing any content to their computers and bars the defendants from installing software that cannot be readily uninstalled. It also bars them from exploiting any security vulnerability to download or install software, computer code, or other content. The injunction also prohibits the defendants from making deceptive representations and bars them from misrepresenting the benefits, efficacy, performance, cost, or features of any software program. It also required the defendants to destroy the personal information they previously collected and prohibits them from obtaining personal information in the future unless they have consumers’ express consent.

The permanent injunction further requires Rines to obtain a $500,000 performance bond before downloading or installing computer code or other content that causes the display of ads, modifies Web browsers or operating systems, or collects personal information. Finally, the settlement imposed a $1.75 million judgment, of which all but $10,000 was suspended based on the defendants’ inability to pay.

In its most recent filing, the FTC alleges that Rines, his company, and his business partner Wallace knew of the permanent injunction and violated that order by diverting users from MySpace.com to their Web sites and barraging them with ads. Specifically, the agency charges that the defendants distributed online content to consumers without their consent; obtained personal information about MySpace users without their consent by sending “phishing” messages that appeared to be from MySpace or other MySpace users; redirected users to Web sites other than those they chose to visit by “pagejacking” them to Web sites displaying advertisements; and modified and disabled users’ Web-browser navigation controls by “mousetrapping.” The agency also alleges that Rines violated the previous order by failing to obtain the required bond before participating or assisting others in the display of online advertising.

The FTC has asked the court to order the defendants to give up the money they earned from their scheme. The contempt motion for violations of a permanent injunction was filed in U.S. District Court for the District of New Hampshire.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

The operators of imbee.com, a social networking site specifically targeting kids and “tweens,” have agreed to settle Federal Trade Commission charges that their data-collection practices violated federal law. The settlement bars future violations of the Children’s Online Privacy Protection Act (COPPA) and the Commission’s implementing rule, requires that the defendants delete all personal information they collected and maintained in violation of the law, and provides for a $130,000 civil penalty.

Industrious Kid, Inc., and owner Jeanette Symons, promoted the imbee.com Web site as a “free, secure, social networking and blogging destination specifically designed for kids ages 8 to 14.” In addition, the Web site was promoted as “purposely designed to ensure the greatest level of safety and satisfaction for young members,” and as “safer than other social networking sites.”According to the FTC, imbee.com collected and maintained personal information from children under the age of 13 without first notifying parents and obtaining their consent.

COPPA prohibits unfair or deceptive acts or practices in connection with the collection, use, or disclosure of personally identifiable information from and about children on the Internet. The statute gives parents the power to determine whether and what information is collected online from their children under age 13, and how such information may be used. In general, COPPA prohibits operators of child-directed Web sites from collecting personal information from children without first obtaining parental consent.

According to the FTC’s complaint, imbee enabled more than 10,500 children to create imbee accounts by submitting their first and last names, dates of birth, personal e-mail addresses, parents’ e-mail addresses, gender, user-names and passwords prior to the site’s providing notice to parents or obtaining their consent. Children who registered also were able to create and post text, photographs, and other content on their personal imbee blog pages, which could not be viewed by others until the parent had completed the registration process. After a child registered with imbee.com, the site sent an e-mail to the child’s parent asking the parent to complete the registration process and allow the child full access to the imbee site. When the parent did not respond to imbee’s e-mail notification or complete the registration process, the site nonetheless maintained the child’s personal information.

The FTC complaint alleged that the defendants violated COPPA and the COPPA implementing rule by failing to obtain verifiable parental consent before any collection of personal information from children; failing to provide sufficient notice of what information they collected online from children, and the site’s information use and disclosure practices and other required content; and failing to provide sufficient notice of the types of personal information they had collected from children prior to obtaining verifiable parental consent.

While imbee’s e-mail notice to parents provided general information about the imbee site, it failed to disclose, among other things, that imbee.com already had collected a child’s full name, e-mail address, date of birth, gender, and a user-name and password. The e-mail notice also failed to inform parents of their right to review or have their children’s personal information deleted. Imbee’s privacy policy suffered from similar shortcomings, and also failed to disclose that Imbee would use the child’s personal information to mail the child “imbee cards” bearing the child’s name, address, photo, imbee name and imbee profile page URL.

The Commission’s consent order calls for the defendants, Industrious Kid, Inc. and Jeanette Symons, to pay a $130,000 civil penalty. In addition, the order specifically prohibits the defendants from violating any provision of the Rule, and requires them to delete all personal information collected and maintained in violation of the Rule. The defendants are required to distribute the order and the FTC’s “How to Comply with the Children’s Online Privacy Protection Rule” to company personnel. The order also contains standard compliance, reporting, and record keeping provisions to help ensure the defendants abide by its terms.

To provide resources to parents and their children about children’s privacy in general, and social networking sites in particular, the order requires the defendants to link to certain FTC consumer education materials for the next five years. The defendants must include a link to the children’s privacy section of the Commission’s www.ftc.gov site on any site they operate that is subject to COPPA. In addition, the defendants must include links to the Commission’s safety tips for social networking on any of their social networking sites.

Imbee recently altered its information practices and now participates in the Kid’s Privacy Safe Harbor Program of CARU, the Children’s Advertising Review Unit of the Council of Better Business Bureaus.

The Commission vote approving the complaint and consent order was 5-0. The complaint was filed by the Department of Justice on the FTC’s behalf on January 28, 2008, in the U.S. District Court for the Northern District of California; the consent decree was filed on January 30, 2008.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.

NOTE: Consent orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Consent orders have the force of law when signed by the judge.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

Sellers of the “Centro Natural de Salud Obesity Treatment” have agreed to settle Federal Trade Commission charges that they made false and unsubstantiated claims that their product causes rapid, substantial, and permanent weight loss. The “treatment” consists of three pills and a bar of “special soap.”

According to a complaint filed by the FTC, in Spanish-language infomercials and on the Internet the marketers made claims such as “Lose 35 pounds in 2 months,” “Everything you lose, you will never gain back,” and “No diets, no skipping dinner, no calorie counting, no side effects.”

Under the proposed settlement, the defendants are prohibited from representing that any weight-loss product causes users to lose substantial amounts of weight rapidly without reducing caloric intake, to lose as much as a half-pound per day for multiple weeks and months, and to lose weight permanently. They also are prohibited from making any representation about the weight-loss effect or health benefits, performance, or efficacy of a product unless it is true, not misleading, and substantiated by reliable scientific evidence.

The defendants, Centro Natural Services, Inc. and Xavier Rodriguez, are located in Santa Ana, California. The settlement contains a monetary judgment of $2,377,000, all but $20,000 of which is suspended based on the defendants’ inability to pay. The full judgment will be imposed if they are found to have misrepresented their financial condition.

The Commission vote to authorize staff to file the stipulated final order and amend the complaint to dismiss Rocio Diaz-Rodriguez as a defendant was 5-0. The order was filed in the U.S. District Court for the Central District of California.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the order are available from the FTC’s Web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

An online advertiser that drove traffic to its Web sites using spam e-mails with misleading subject lines has agreed to settle Federal Trade Commission charges that it failed to disclose that consumers have to spend money to receive the so-called “free” items it touts. The settlement, filed by the Department of Justice on behalf of the FTC, requires the defendants to disclose the costs and obligations to qualify for the advertised products or services, and bars them from sending e-mail that violates the CAN-SPAM Act. The settlement also requires that the company pay $200,000 in civil penalties.

According to the FTC, Member Source Media LLC, doing business as ConsumerGain.com, PremiumPerks.com, FreeRetailRewards.com, and GeatAmericanGiveaways.com, and the company’s principal, Chris Sommer, used deceptive spam and online advertising to lure consumers to its Web sites. For example, Member Source Media used e-mail subject lines such as, “Congratulations. You’ve won an iPod Video Player”; “Here are 2 free iPod Nanos for You: confirm now”; “Nascar Tickets Package Winner”; “Confirmation required for your $500 Visa Gift Card”; or “Second Attempt: Target Gift Card Inside.” The company’s Web-based ads contain similar representations: “CONGRATULATIONS! You Have Been Chosen To Receive a FREE GATEWAY LAPTOP.”

When consumers arrive at Member Source Media’s promotional Web pages, they are led through a series of ads for goods and services from third parties. To “qualify” for their “free products,” consumers must first wade through pages of “optional” offers. If they clear this hurdle, they discover that they must “participate in” a series of third-party promotions that requiree them to do things such as purchase products, subscribe to satellite television service, or apply for multiple credit cards.

The FTC alleges that Member Source Media’s failure to disclose material facts – such as the fact that consumers must pay money or provide some other consideration to obtain their “free product” – is deceptive in violation of the FTC Act. In addition, the agency charged that deceptive subject lines in Member Source Media’s spam e-mails violate the federal CAN-SPAM Act.

The settlement requires that Member Source Media clearly and conspicuously disclose in its ads and on its promotional Web pages that consumers have to spend money or incur other obligations to qualify for a free product or service. The settlement also requires the company to provide a list of the obligations a consumer is likely to incur to qualify for their chosen item – such as applying for credit cards or purchasing products. In addition, the settlement bars future violations of the CAN-SPAM Act and requires Member Source Media and Sommer to pay a $200,000 civil penalty. Finally, the settlement contains bookkeeping and record-keeping provisions to allow the agency to monitor compliance.

The Commission vote to approve the stipulated final order was 5-0, with Commissioner Jon Leibowitz concurring in part and dissenting in part. In his dissenting statement, Commissioner Leibowitz said he had dissented from a similar case against Adteractive, Inc. “on the ground that the civil penalty the company had to pay represented a downward departure from our other CAN-SPAM Act cases and was not adequate to deter violations in the future. I respectfully dissent in part in this case because I believe that the civil penalty here, which was being negotiated at roughly the same time as that in Adteractive, is also inadequate. But I am concurring in part because I do not want a continuing difference on the amount of the civil penalty to suggest that I disagree with the Commission’s efforts in this area.”

The complaint and stipulated final order for permanent injunction were filed in the U.S. District Court for the Northern District of California.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Dietary supplement marketers must run more frequent and prominent advertising disclosures after violating a court order entered against them two years ago. The original order settled Federal Trade Commission charges that the defendants deceptively marketed their dietary supplements, sublingual sprays, and other products. Despite the order’s specific requirements on how to disclose that the programs were paid advertisements, the companies aired a number of television and radio infomercials that did not make the proper disclosures.

According to the FTC, the defendants violated the court order by failing to include clear, audible, and properly placed disclosures that the programs actually were paid advertisements. For example, the defendants failed to run required “paid advertising” disclosures immediately before product-ordering instructions. At times, the disclosures were too small or onscreen too briefly to be read by consumers.

The court order entered today against Great American Products, Inc., Physician’s Choice, Inc., and Stephen Karian modifies the previous order by imposing the following requirements:

• The defendants must display a visual paid advertising disclosure continuously throughout the ordering instructions during television advertisements.
• The defendants must broadcast a supplemental audio paid advertising disclosure simultaneously with the initial visual disclosure (in the first 30 seconds of the advertisement, for a period of at least 10 seconds), clearly and audibly, in a cadence sufficient for the ordinary consumer to hear and comprehend, and in a volume as loud or louder than the loudest statement in the advertisement.
• The audio paid advertising disclosure for a radio advertisement must be as loud or louder than the loudest statement in the advertisement, and the defendants must make the disclosure immediately prior to ordering instructions.

The Commission vote to authorize the staff to file the stipulated final order was 5-0. The stipulated final order for permanent injunction was entered on January 23, 2008, by the U.S. District Court for the Northern District of Florida.

NOTE: A stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

The Federal Trade Commission today announced a complaint and proposed consent decree settling charges that a California-based “voice broadcaster” made over 46 million unlawful telemarketing calls. The proposed court order permanently bars the defendants from violating the FTC’s Telemarketing Sales Rule (TSR) and requires them to pay $180,000 in civil penalties.

According to the complaint filed by the Department of Justice (DOJ), since October 1, 2003, Voice-Mail Broadcasting Corporation (VMBC) and its owner, Jesse Crowe, have used automated dialers to “blast” consumers with prerecorded telemarketing pitches. The calls pitched products from debt-consolidation services to mortgage brokerage services and other retail and financial services. When VMBC’s telemarketing calls were answered by consumers rather than answering machines or voicemail systems, VMBC either immediately hung up, leaving consumers with “dead air,” or played a prerecorded message. Such calls violate the TSR, which limits telemarketers’ use of prerecorded messages by requiring that calls answered by a person be connected to a sales representative within two seconds. The FTC’s complaint alleges that VMBC, under the direction of its owner, made more than 46 million calls that violated the TSR.

The consent decree announced today is similar to those previously approved by the Commission in other cases involving the misuse of prerecorded telemarketing messages. The proposed consent decree bars VMBC and its owner from violating the TSR by either hanging up or playing a recorded message when a consumer answers a call, instead of promptly connecting the consumer to a sales person. The proposed consent decree imposes a civil penalty of $3 million against VMBC and its owner, of which all but $180,000 will be suspended based on the defendants’ inability to pay. However, VMBC and its owner will become liable for the full amount if the court finds they misrepresented their financial condition.

The consent decree against VMBC and its owner is the third FTC case challenging telemarketing practices filed in federal district court in Los Angeles in as many months. In November 2007, as part of the FTC’s most recent Do Not Call enforcement sweep, the Commission filed a complaint and consent decree against Ameriquest Mortgage Company for improperly calling consumers on the Do Not Call Registry whose numbers had been obtained from third-party lead-generators, resulting in a $1 million penalty. At the same time, the FTC filed a complaint against Global Mortgage Funding, Inc., for making hundreds of thousands of calls to consumers on the Do Not Call Registry, failing to transmit the required caller ID information, failing to pay the Do Not Call Registry fees, and improperly abandoning calls made to consumers.

The Commission vote approving the complaint and proposed consent decree was 5-0. The complaint and proposed consent decree were filed by DOJ on January 28, 2008, in the U.S. District Court for the Central District of California.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law. Stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated judgments have the force of law when signed by the judge.

Copies of the Commission complaint and stipulated final order can be found as a link to this press release on the FTC’s Web site. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

Commission approval of amicus brief filing: The FTC’s Office of General Counsel has filed an amicus brief with the U.S. Court of Appeals for the Federal Circuit in the matter of In re Ciprofloxacin Hydrochloride Antitrust Litig., sub nom. Arkansas Carpenters Health and Welfare Fund v. Bayer AG, No 08-1097 (Fed. Cir.). In the brief, which can be found on the Commission’s Web site as a link to this press release, the FTC urges the Court of Appeals to reverse the District Court’s decision and hold that patent laws do not immunize patent settlements between pharmaceutical firms from antitrust scrutiny. The Commission filed the brief based on “the importance of the issues presented to its mandated mission and the serious risk to consumer welfare posed by anticompetitive settlement agreements” between drug companies.

The Commission vote approving the filing of the amicus brief was 5-0. It was filed with the U.S. Court of Appeals for the Federal Circuit on January 25, 2008. (FTC File No. P082105; the staff contact is Imad Dean Abyad, Office of General Counsel, 202-326-2375.)

Commission approval of joint FTC/DOJ letter: The Commission, in consultation with the staff of the Department of Justice’s Antitrust Division, has submitted a joint letter to the Supreme Court of Hawaii regarding a proposed rule defining the practice of law in the state. The rule being considered by the Court would define the practice of law to include: 1) giving advice or counsel to another person about the person’s legal rights and obligations; 2) performing legal research; 3) selecting, drafting, or completing documents that affect the rights of another person; and 4) negotiating legal rights or obligations . . . on behalf of another person.

According to the joint agency letter, the broad, general definition in the proposal likely would force Hawaiians who would not otherwise hire a lawyer to do so by eliminating the resources consumers can rely upon to obtain legal information and prevent, among other activities: 1) tenants’ associations from informing renters about landlords’ and tenants’ legal rights and responsibilities; 2) lay organizations, advocates, and consumer associations from providing citizens with information about their legal rights and way to negotiate solutions to problems; and 3) human resource management and other specialists from advising employers about discrimination, harassment, and other issues. To preserve competition and to benefit consumers, the agencies suggest that the Court adopt language similar to that found in Rule 49 of the District of Columbia Court of Appeals. Rule 49 defines the practice of law as “the provision of professional legal advice or services where there is a client relationship of trust or reliance,” and explains that giving advice or counsel to others as to legal rights or responsibilities is not necessarily the practice of law, but may be the practice of law when provided in the context of an attorney-client relationship.

The Commission vote approving issuance of the joint letter was 5-0. The letter was transmitted to the Supreme Court of Hawaii on January 25, 2008. Copies of the letter can be found on the FTC’s Web site and as a link to this press release. (FTC File No. V080004; the staff contact is Gustav P. Chiarello, Office of Policy Planning, 202-326-2633.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

The Federal Trade Commission and the Department of Justice’s Antitrust Division today announced that they will host a joint workshop entitled, “2008 International Technical Assistance Workshop: Charting the Future Course of International Technical Assistance at the U.S. Department of Justice and the Federal Trade Commission.”

The workshop, which will be held on February 6, 2008, will outline the agencies’ experience providing technical assistance to new antitrust and consumer protection agencies and to countries in the process of reforming their markets and adopting antitrust and consumer protection laws. It also will provide an opportunity to discuss ideas for improving the agencies’ technical assistance programs, maximizing their effectiveness, and charting future courses of such efforts.

FTC Chairman Deborah Platt Majoras and Thomas O. Barnett, the Assistant Attorney General in charge of the Antitrust Division, will deliver introductory remarks.

The workshop will consist of several interactive panel discussions covering topics including:

• An overview of the antitrust technical assistance provided by the FTC and the Antitrust Division over the past two decades;
• The expanding role of consumer protection in developing legal and economic policies through technical assistance;
• The experience of other providers of technical assistance, including foreign agencies and multilateral organizations;
• Perspectives from private practitioners, academics and officials from foreign agencies on what is needed in the technical assistance area; and
• Technical assistance for the 21st century, including recommendations to be implemented by the FTC and the Antitrust Division as they promote competition and consumer protection law and policy.

The workshop, which will be free and open to the public, will be held from 8:30 a.m. until 5:30 p.m. at the FTC ‘s satellite building conference center, located at 601 New Jersey Avenue, N.W., Washington, DC. A government-issued photo ID is required for entry. Pre-registration is not required.

Reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via e-mail to [email protected] or by calling Carrie McGlothlin at 202-326-3388. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information. Please provide advance notice.

Anyone may submit written or electronic comments, either before or after the workshop. Two complete copies of each written submission should be submitted. The e-mail address for submitting comments to the FTC is: [email protected]. Comments to the Justice Department can be submitted using the DOJ conference Web site. For more information on the workshop, including a detailed agenda, please visit: www.ftc.gov/oia/wkshp/index.shtm or www.usdoj.gov/atr/public/workshops/techassist2008/index.htm.

A federal court has entered a final order against a Florida debt collection agency, its principals, and its attorney, settling a Federal Trade Commission action that alleged that the defendants violated the FTC Act and the Fair Debt Collection Practices Act (FDCPA) while collecting consumers’ debts.

The FTC’s complaint alleged that the enterprise used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed. The complaint alleged that the collectors often shouted and used profanity and other abusive language to carry out their collections.

The stipulated final order, among other things, permanently bars the defendants from falsely representing the character, amount, or legal status of a consumer’s debt, that their collector is an attorney or represents an attorney, or that if the consumer does not pay, the defendants can or will file a lawsuit against the consumer. It also prohibits them from violating the FDCPA in any way, including by disclosing a consumer’s debts to any third parties, using profanity or other abusive language in collection calls, or by continuing to attempt to collect a debt before providing verification of the debt to consumers who properly request such verification. The settlement also requires the defendants to provide consumers with a toll-free number and mailing address to file complaints, promptly investigate each such complaint, and take steps to cease, resolve, and cure any violations of the court order or the FDCPA.

The defendants are Rawlins & Rivera, Inc. of Florida, Rawlins & Rivera, Inc. of Georgia, Ryan & Reed, Inc. of Florida, Ryan & Reed, Inc. of Georgia, RRI, Inc., the corporations’ officers, Janis Brust, Joe L. Hunt, Sr., Joe L. Hunt, Jr., and a Florida lawyer, Robert W. Bird, whose letterhead was used for many of their collection letters. The settlement contains a monetary judgment of $3.4 million, which represents the total amount the defendants took in through their allegedly improper debt collection activities. The settlement requires the defendants to sell property and transfer the proceeds of the sale to the FTC. The remainder of the $3.4 million will be suspended based upon the defendants’ inability to pay.

The Commission vote to authorize staff to file the stipulated final order was 5-0. The order was entered by the U.S. District Court for the Middle District of Florida, Orlando Division, on January 14, 2008, along with an order dismissing Shannon Hunt from the complaint.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

The Federal Trade Commission has submitted a staff comment to the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (“TTB”) concerning a proposed rulemaking on alcohol labeling.

TTB proposed to adopt a mandatory Serving Facts panel, to include the serving size, number of servings per container, and for each serving, the number of calories, and the quantity in grams of carbohydrates, fat, and protein. It also proposed to require that labels contain a disclosure of alcohol content by volume (“ABV”) somewhere on the label and to permit, but not require, disclosure of pure alcohol content in fluid ounces per serving. The FTC staff supports TTB’s proposal to increase substantially the amount of information contained on alcohol labels, but recommends that TTB require labels to disclose pure alcohol content in fluid ounces per serving (rather than in the form of ABV) and specify that this disclosure should appear within the Serving Facts panel.

As proposed by the FTC staff, the labels would give consumers the standard serving size (to be defined in the new rules) as well as the amount of pure alcohol per serving, thus permitting consumers to compare different beverages. Because labeling can be an important vehicle for communicating government recommendations, the comment urges TTB to consider permitting labels to carry information about public health recommendations to limit alcohol consumption. The staff recommends that TTB conduct consumer research on the new labels before finalizing the rulemaking. Finally, regardless of the form in which the disclosures are made, consumers will need help learning how to interpret the disclosures and how to compare the alcohol content of different beverages. Accordingly, the comment recommends that TTB engage in consumer education about the new labels, in connection with their introduction into the marketplace.

The Commission vote approving issuance of the report was 5-0. (FTC File No. P084504; the staff contact is Janet M. Evans, Bureau of Consumer Protection, 202-326-2125.)

Copies of the document mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.