Petitions for approval of proposed divestiture: The Commission has received two petitions from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. In the FTC’s consent agreement and order allowing the transaction to proceed with conditions, SCI and Alderwoods were required to divest a range of funeral home and cemetery services companies. Through the petitions, public versions of which can be found on the Commission’s Web site as a link to this press release, the companies have requested approval to divest Lee Funeral Home in Manassas, Virginia, to Found, LLC; and Evergreen Memorial Chapel in Anchorage, Alaska; Evergreen’s Eagle River Funeral Home in Eagle River, Alaska; and Alaska Cremation Center in Anchorage, Alaska, to Janssen Funeral Homes, Inc. and Janssen-Eastman Properties, LLC.
The FTC is seeking public comments on the proposed divestitures for 30 days, until August 6, 2007, after which it will decide whether to approve it. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. (FTC File No. 061-0156, Docket No. C-4174; the staff contact is Elizabeth A. Piotrowski, Bureau of Competition, 202-326-2623, see press release dated November 22, 2006.)
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.
In the case against the cross-border advance-fee telemarketing scheme known as Centurion Financial Benefits, a federal district court – acting at the request of the Federal Trade Commission – has entered several additional orders against participants in the scam. The FTC today announced the court has entered final orders requiring the corporate defendants and Robert Houttuin to halt their illegal cross-border telemarketing and barring them from violating the Commission’s Telemarketing Sales Rule (TSR). These orders contain monetary judgments of nearly $10 million.
The FTC also announced today that the court has held individual defendant Frank Bellissimo and non-party Ira Rubin in contempt of court for their operation of another telemarketing scam in violation of a preliminary injunction entered earlier in this matter.
The FTC’s Complaint
According to the FTC’s complaint, filed in September 2005, since at least 2004, the defendants used outbound telemarketing to contact consumers in the United States, falsely offering major credit cards, such as MasterCard and Visa, to people who agreed to have the defendants electronically debit their bank accounts for an advance fee of $249. The defendants typically claimed that the credit cards would have a $2,000 credit limit, zero percent interest, and no annual fees, and often targeted their offers at consumers with poor credit histories. Consumers who provided their bank account information did not receive a major credit card, but instead were sent an application for either a “stored value card” or “cash card” that had no line of credit associated with it and could be used only if the consumer first transferred funds onto the card.
The complaint named the following entities as defendants, both individually and as corporate officers: Sean Somma aka Sean Soma, individually and as an officer of corporate defendants Centurion Financial Benefits LLC and 1629936 Ontario Ltd, also d/b/a Spectra Financial Benefits; Antonio Marchese aka Tony Marchese, individually and as an officer of corporate defendant 1644738 Ontario Ltd., also d/b/a Sureway Beneficial, Simple Choice Benefits, and Oxford Financial Benefits; Tony Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc., Credence Travel Processing Inc., and Topstar Media Inc., also d/b/a Integra Financial Benefits; and Dennis Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc. and Topstar Media Inc., also d/b/a Integra Financial Benefits.
The complaint also charged Centurion Financial Benefits LLC; 1629936 Ontario Ltd., also d/b/a Centurion Financial Benefits; 1644738 Ontario Ltd, d/b/a Integra Financial Benefits; American Getaway Vacations Inc., also d/b/a Integra Financial Benefits; Credence Travel Processing Inc., d/b/a Integra Financial Benefits; and Topstar Media Inc., also d/b/a Integra Financial Benefits. The FTC filed an amended complaint in December 2006, adding the following corporate and individual defendants to the case: 1648534 Ontario Ltd., d/b/a Sureway Beneficial; 1652242 Ontario Ltd., d/b/a Oxford Financial Alliance and Oxford Financial Benefits; 1656324 Ontario Ltd., d/b/a Simple Choice Financial Benefits; 1466827 Ontario Ltd., d/b/a ESI Employment Solutions, Inc.; 6347738 Canada Inc., d/b/a ESI Contact Inc.; 1571816 Ontario Ltd, d/b/a RNR Holdings and Vu Com Communications; Frank Bellissimo; Robert J. Houttuin; Catreena Alexandra Marchewka; and Sylvain Cholette.
Dennis Andreopoulos later was voluntarily dismissed as a defendant, and on May 9, 2007, the Commission announced a settlement with three defendants – Soma, Marchese, and Cholette. Litigation continues against defendants Tony Andreopoulos and Catreena Marchewka.
The Final Orders
The final orders announced today concern all thirteen of the corporate defendants as well as individual defendant Robert Houttuin. These orders bar Houttuin and the corporate defendants from: 1) making, or assisting anyone else in making, any false or misleading statements concerning any fact material to a consumer’s decision to buy any program, product, or service; and 2) violating, or helping anyone else to violate the TSR. The orders also hold Houttuin and the corporate defendants jointly and severally liable for $9.89 million (the total amount of consumer injury associated with their scam), freeze their assets until they have satisfied this judgment, and bar them from selling their customer lists. Finally, the orders contain provisions designed to ensure future compliance with the FTC Act and the orders themselves.
The Contempt Order
In an order entered May 23, 2007, the court held individual defendant Frank Bellissimo and non-party Ira Rubin in contempt of court. The court entered a preliminary injunction in January 2006, shortly after the FTC filed its initial case. Among other things, the preliminary injunction freezes the defendants’ assets and prohibits them from engaging in deceptive conduct. The injunction also prohibits third parties like Rubin who receive notice of the order from assisting the defendants in violating it. Rubin was notified of this order, and was therefore bound by it.
In papers submitted to the court, the FTC demonstrated that just a few months after entry of the preliminary injunction, Bellissimo began a new telemarketing venture that falsely promised consumers they would receive at least $5,000 in government grants in exchange for an application fee of several hundred dollars. Rubin withdrew these fees from consumers’ bank accounts. In total, Rubin took approximately $657,648 from consumers on behalf of Bellissimo’s grants scam, transferred over $550,000 of these funds to Bellissimo, and kept the rest in fees for himself. Rubin and his employees also provided “customer service” for the grants scam and even edited sales scripts used by Bellissimo’s telemarketers. Consumers received nothing of value — much less a $5,000 “grant” — in exchange for the fees that Rubin deducted from their bank accounts and passed along to Bellissimo. The court found that this conduct violated the preliminary injunction.
The court ordered Bellissimo and Rubin to return the $657,648 that they took from U.S. consumers victimized by their grants scam, and it imposed a fine of $5,000 per day for each day the amount remains unpaid. Finally, the court has barred Bellissimo from engaging in the sale or promotion of any product or service to consumers in the United States.
Law Enforcement Assistance
The FTC appreciates the considerable assistance of several U.S. and Canadian law enforcement partners, including the Toronto Strategic Partnership, in conducting this investigation. In addition to the FTC, the Toronto Partnership is composed of the U.S. Postal Inspection Service, Canada’s Competition Bureau, the Toronto Police Service Fraud Squad’s Telemarketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Government Services, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading.
Assistance also was provided by the Alberta Partnership Against Cross-Border Fraud. The Alberta Partnership consists of the FTC, Alberta Government Services, the Calgary Police Service, Canada’s Competition Bureau, the Edmonton Police Service, the Royal Canadian Mounted Police, and the U.S. Postal Inspection Service. The FTC alleged that part of the Centurion telemarketing took place in Calgary, Alberta.
Shortly after the Commission filed its complaint in September 2005, Canadian authorities executed search warrants on the telemarketing boiler rooms in Toronto and Calgary used to perpetrate the scam and brought criminal charges against the scam’s principals. See
http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1949&lg=e and
http://www.gov.calgary.ab.ca/citybeat/public/2005/09/release.20050927_141328_9398_0. On June 18, 2007, Robert Houttuin and Frank Bellissimo pleaded guilty to criminal charges in Canada. They will be sentenced in November 2007.
Copies of the final orders are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. 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.
Commission approval of final consent orders: Following a public comment period, the Commission has approved a final consent order in the matter concerning DirectRevenue, LLC, et al. The Commission vote approving the final consent order and authorizing the staff to issue letters to the commenters of record was 4-1, with Commissioner Jon Leibowitz voting no and issuing a dissenting statement. (FTC File No. 052-3131; the staff contact is Mamie Kresses, Bureau of Consumer Protection, 202-326-2070; see press release dated February 16, 2007.)
Following a public comment period, the Commission has approved a final consent order in the matter concerning Sony BMG Music Entertainment. The Commission vote
approving the final consent order and authorizing the staff to issue letters to the commenters of record was 5-0. (FTC File No. 062-3019; the staff contact is Matthew Daynard, Bureau of Consumer Protection, 202-326-3291; see press release dated January 30, 2007.)
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.
Federal Trade Commission Chairman Deborah Platt Majoras today announced that Michael A. Salinger, director of the Bureau of Economics for the past two years, will leave the FTC to return to the Boston University School of Management, where he is a Professor of Economics. The Chairman also announced that Michael R. Baye, the Bert Elwert Professor of Business in the Kelley School of Business at Indiana University, has been named to succeed him. The Director supervises economic analysis at the Commission and advises the Commission on economic policy matters.
“I am grateful to Michael for his outstanding work at the FTC, his excellent service, and his outstanding achievements. We have benefitted greatly from his expertise and his insight, which have helped further the important message that free markets and unfettered competition work for consumers,” Chairman Majoras said. “We are fortunate that Michael Baye will take over as Bureau Director, and I am confident that he will continue this tradition of excellence and provide valuable assistance to the Commission in fulfilling its competition and consumer protection mission.”
Salinger, who has served as Chairman of the Department of Finance and Economics at the Boston University School of Management and recently was named a W. Everett Lord Distinguished Faculty Scholar, joined the school in 1990. He previously was an associate professor at Columbia University Business School, and a staff economist in the FTC’s Bureau of Economics. Salinger has served on the editorial boards of the Journal of Industrial Economics and the Review of Industrial Organization, and he has been a consultant for the FTC, the
Environmental Protection Agency, the Australian Competition and Consumer Commission, and private clients. He has a Ph.D. in Economics from the Massachusetts Institute of Technology and an undergraduate degree from Yale University.
While at the FTC, Salinger promoted effective interaction of the Bureau of Economics with the Bureaus of Competition and Consumer Protection, ensuring that the Bureau’s analysis in support of the FTC’s missions was analytically sound and effectively communicated. He was also the public face of the Bureau, communicating its work and the Commission’s through speeches, writings, and personal outreach to lawyers, economists, the general public, foreign antitrust authorities, other government agencies, and Congress. During Salinger’s tenure, the Bureau produced pathbreaking studies on such topics as food advertising to children and the transparency of housing loan disclosures, and it sponsored conferences on topics such as Internet auctions, behavioral economics, and the history of grocery store merger review. He played a particularly important role in the Bureau’s analysis of petroleum markets and in the Commission’s study of authorized generics in the pharmaceutical industry.
Baye has served as the Bert Elwert Professor of Business in the Kelley School of Business at Indiana University since 1997. He previously held academic positions at Penn State University, Texas A&M University, and the University of Kentucky, and visiting appointments at Cambridge and Oxford universities in England, Erasmus University in Rotterdam, The Netherlands, and the New Economic School in Moscow, Russia.
Baye’s research focuses mainly on pricing strategies and their impact on consumer welfare and firm profits. His recent work applies tools from game theory and industrial organization to derive equilibrium strategies in network industries, mergers, auctions, and contests. Much of this research concerns pricing strategies in oligopoly environments where consumers view the products sold by different firms to be close substitutes. Baye’s pricing research shows, among other things, that optimal pricing strategies by firms and information “gatekeepers” in conventional and online markets can lead to equilibrium price dispersion when firms have identical costs, shoppers are well-informed, and products are perceived to be identical. Many of these strategies are discussed in Baye’s managerial economics textbook and taught to business students around the world.
Baye’s research on mergers, auctions, and contests has been published in such journals as the American Economic Review, the Review of Economic Studies, and the Economic Journal. His research on pricing strategies in online and other environments where consumers search for price information has been supported by the National Science Foundation, the Fulbright Commission, and other organizations, published in leading economics and marketing journals such as the American Economic Review, Econometrica, and the Journal of Political Economy, and featured in The Wall Street Journal, Forbes, and The New York Times.
Baye has served as an editor of Advances in Applied Microeconomics, an associate editor of Journal of Economics & Governance, and he has served on the editorial boards of Economic Theory and the Journal of Public Policy and Marketing. He has a Ph.D. in Economics from Purdue University’s Krannert School of Management, a master’s degree from Purdue University, and an undergraduate degree from Texas A&M University.
The Bureau of Economics assists the Commission in evaluating the economic impact of its antitrust and consumer protection actions. The Bureau’s analytical work provides economic advice for enforcement actions, working closely with the bureaus of Competition and Consumer Protection; studies the effects of legislative options and regulations as part of the advocacy program coordinated by the Office of Policy Planning; and analyzes market issues to create economic reports and recommendations on various markets and industries.
The Federal Trade Commission has issued an administrative complaint challenging Whole Foods Market Inc.’s approximately $670 million acquisition of Wild Oats Markets Inc. The administrative complaint preserves the Commission’s legal option to pursue an administrative remedy following the federal district court proceeding. According to the complaint, the transaction would violate federal antitrust laws by eliminating the substantial competition between these two uniquely close competitors in the operation of premium natural and organic supermarkets nationwide. The FTC contends that if the transaction goes forward Whole Foods would have the ability to raise prices and reduce quality and services.
The issuance of the administrative complaint follows the filing of a similar complaint in the U.S. District Court for the District of Columbia on June 6, 2007. On June 7, 2007, the judge issued a temporary restraining order under which the parties may not consummate the deal until after a preliminary injunction hearing, which is scheduled for July 31 and August 1, 2007.
The FTC’s vote to issue the complaint was 5-0. The complaint is available on the FTC’s Web site as a link to this press release and on the Whole Foods case docket page.
NOTE: The Commission issues or files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the named parties have violated the law.
The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.
The Federal Trade Commission’s Internet Access Task Force today issued a report, “Broadband Connectivity Competition Policy,” which summarizes the Task Force’s findings in the area of broadband Internet connectivity and, in particular, so-called network neutrality regulation. Based on these findings, and FTC staff’s experience with the operation of myriad markets throughout the economy, the report identifies guiding principles that policy makers should consider in evaluating proposed regulations or legislation relating to broadband Internet access and network neutrality.
According to Chairman Deborah Platt Majoras, “This report recommends that policy makers proceed with caution in the evolving, dynamic industry of broadband Internet access, which generally is moving toward more – not less – competition. In the absence of significant market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.”
As the report notes, certain conduct and business arrangements that broadband providers may pursue, including data prioritization, exclusive deals, and vertical integration into online content and applications, can benefit consumers. “The primary reason for caution is simply that we do not know what the net effects of potential conduct by broadband providers will be on all consumers, including, among other things, the prices that consumers may pay for Internet access, the quality of Internet access and other services that will be offered, and the choices of content and applications that may be available to consumers in the marketplace.”
Noting that three federal agencies – the Federal Communications Commission, the Department of Justice, and the FTC – have jurisdiction to address broadband Internet access, the report explains that the FTC, for its part, will continue to devote substantial resources to maintaining competition and protecting consumers in the broadband area. In addition to vigorously enforcing the antitrust and consumer protection laws, the FTC will expend considerable efforts on consumer education, industry guidance, and competition advocacy in the area of broadband Internet access.
In addition to proposing guiding principles for policy makers, the report includes background information on the technical functioning of the Internet and the legal and regulatory developments that have led to the current debate over network neutrality regulation; provides an overview of the arguments for and against such regulation; analyzes the consumer welfare effects of certain potential conduct by broadband providers, including data discrimination and prioritization; explores the application of the antitrust and consumer protection laws to such conduct; and identifies various proposals for broadband Internet access that have been put forth to date.
The report is the second publicly released work from the Task Force, which was convened by Chairman Majoras in August 2006 and is headed by Maureen K. Ohlhausen, Director of the FTC’s Office of Policy Planning. With members from throughout the agency, the Task Force seeks to enhance the FTC’s expertise in the increasingly important area of Internet access.
The Commission vote to approve the report was 5-0, with Commissioner Jon Leibowitz issuing a separate concurring statement. In his statement, Commissioner Leibowitz said, “The Report also soberly reminds us that regulation often has unintended side-effects. That is surely true. But it seems to me equally clear that this Report shows that doing nothing may have its costs as well.”
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.
A new publication from the FTC has information that could help consumers save their homes and recognize and avoid foreclosure scams. The publication, “Mortgage Payments Sending You Reeling? Here’s What To Do,” explains different kinds of mortgages, what to do if you’re behind in your payments, how to avoid default and foreclosure, and how to avoid predatory scams.
Consumers who have a mortgage with a fixed rate for a few years followed by an adjustable rate may face payment shock when their rate soars. Others may be anticipating an adjustment upward and wondering what their payments will be. Still others may have unrelated financial problems that could threaten their ability to pay their mortgage.
The FTC’s advice: Know the terms of your mortgage, and contact your loan servicer to find out your options as early as you can.
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 told the U.S. House Committee on Ways and Means, Subcommittee on Social Security that to prevent thieves from obtaining consumers’ personal information, including Social Security numbers (SSNs), and using it to steal identities, government and businesses should collect only information that is necessary to meet clear legal or business needs, and protect the data they do collect. Other steps to reduce identity theft should include improved authentication techniques, which ensure that consumers are who they claim to be.
Joel Winston, Associate Director of the FTC’s Division of Privacy and Identity Protection, told the committee “SSNs play an important role in our economy. With 300 million American consumers, many of whom share the same name, the unique 9-digit SSN is a key identification tool for businesses, government, and others.” The testimony describes the various uses of SSNs. For example, consumer reporting agencies use SSNs in credit reports and “businesses and other entities use those reports in making eligibility and pricing decisions for a variety of products and services, including as credit, insurance, home rentals or employment.” In addition, city, county, and state governments use SSNs for such things as birth and death records, tax records, and voter registrations. “As these records are increasingly placed online, access to large stores of SSNs becomes easier and less costly.”
The result of the widespread use and ready availability of SSNs means that they are more accessible to scammers who could obtain and use them to commit identity theft, the testimony says. “The challenge is to find the proper balance between the need to keep SSNs out of the hands of identity thieves and the need to give business and government entities sufficient means to attribute information to the correct person.”
The testimony states that in addition to federal laws designed to protect consumers’ sensitive information, including the FTC Act, The Fair and Accurate Credit Transactions Act, The Safeguards Rule, and the Health Information Portability and Accountability Act, the presidentially appointed Identity Theft Task Force has forwarded “recommendations on ways to improve the effectiveness and efficiency of the government’s activities in the areas of identity theft awareness, prevention, detection, and prosecution.”
The Task Force made five recommendations to restrict unnecessary uses of SSNs by the federal government:
The Task Force also recommended that the FTC and other Task Force agencies review the use of SSNs in the private sector and the extent to which it is driven by business necessity, as opposed to convenience or habit, assess the costs of requiring businesses to use alternate identifiers, and make recommendations to the president on whether additional steps should be taken regarding the use of SSNs.
“To prevent thieves from obtaining sensitive information, government and the business community should, first, limit the information they collect and maintain from or about consumers – including SSNs – to that necessary to meet clear legal or business needs, and second, to better protect the data they do collect. In addition, to keep thieves from using information they do procure to steal identities, consumer authentication techniques must be improved,” the testimony concludes.
The Commission vote authorizing the presentation of the testimony and its inclusion in
the formal record was 5-0. A copy of the testimony can be found on the FTC’s Web site and as a link to this press release.
Copies of the testimony 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, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.shtm. 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.
At the request of the Federal Trade Commission, a federal court has stopped an operation that allegedly victimized Spanish-speaking consumers nationwide by posing as debt collectors seeking payments consumers did not owe.
“Lying to consumers about debts they don’t owe and harassing and threatening them when they don’t pay are illegal business practices, period,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “We will aggressively pursue companies that use these tactics to extort money from consumers.”
According to the FTC’s complaint, from 2003 to 2005 the defendants sold an English-language instruction course, “Inglés con Ritmo,” advertised on Spanish-language television and the defendants’ Web sites, www.tonorecords.com and www.tonomusic.com, stating that it was free due to government or non-profit subsidies. Inquiring consumers were told that a shipping and handling fee of $100 to $169 applied. Since 2006, the complaint states, the defendants, posing as third-party debt collectors, told consumers they owed money, typically $900, and repeatedly called them, even though the evidence shows that they owe no money.
The defendants are charged with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA) by falsely claiming that a debt is owed; by falsely claiming to be, or to represent, an attorney; and by falsely threatening legal action, arrest, imprisonment, property seizure, or garnishment of wages. Other FDCPA violations alleged are attempting to collect an amount of debt not authorized by contract or permitted by law; harassing consumers; and failing to inform consumers, within five days of their initial communication with them, of their right to dispute and obtain verification of their debt and the name of the original creditor.
The defendants are Tono Records, dba Tono Music and Professional Legal Services, Tono Publishing, Promo Music, Millennium Three Corp., Dulce Ugalde, Luis Roberto Ruiz, and Maria Oceguera, all based in Los Angeles County, California.
On June 14, a U.S. district court judge ordered an ex parte temporary restraining order freezing the defendants’ assets. The FTC seeks to permanently bar them from further violations and make them forfeit their ill-gotten gains. By a 5-0 vote, the Commission approved the filing of the complaint in the U.S. District Court for the District of California, Central District of California.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint 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 in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.shtm. 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.
