Markets Wired

FTC Action Stops Unsupported Claims for Opiate Withdrawal Treatments

A company that marketed itself as “the leader in home opiate detox since 2009” and its CEO have settled Federal Trade Commission charges that the withdrawal treatment claims for their “Withdrawal Ease” and “Recovery Ease” products were false or unsupported by scientific evidence.

The court order settling the FTC’s charges bars Catlin Enterprises, Inc. and George Catlin, based in Austin, Texas, from making claims about opiate withdrawal, opiate dependency, or other health conditions, including through their product names, unless they possess competent and reliable science to back up those claims.

“Opioid addiction is a scourge that has affected millions of Americans,” said Acting FTC Chairman Maureen K. Ohlhausen. “People who struggle with this problem need real help, not phony claims and false promises like the ones peddled by these defendants.”

According to the FTC’s complaint, the defendants violated the FTC Act by making unsubstantiated claims that Withdrawal Ease: 1) significantly alleviated the symptoms of opiate withdrawal; and 2) significantly increased the likelihood of a person overcoming opiate dependency. The defendants also allegedly misrepresented that clinical studies proved Withdrawal Ease’s effectiveness. The complaint charges the defendants with deceptively representing that Recovery Ease significantly alleviated long-term opiate withdrawal symptoms.

The proposed order settling the FTC’s complaint prohibits the defendants from making health claims, including claims that their products can alleviate withdrawal symptoms or help with drug dependency, unless the claims are non-misleading and are substantiated by scientific evidence. The terms of the order are very similar to those in the FTC’s recent case against Sunrise Nutraceuticals, another company that the FTC alleged lacked the necessary scientific evidence to prove its herbal product helped with opiate withdrawal.

Finally, the proposed order imposes a $6.6 million judgment against the defendants, which will be suspended based on their inability to pay.

The Commission vote authorizing the staff to file the complaint and to approve the stipulated proposed order was 2-0. The FTC filed the complaint and proposed order in the U.S. District Court for the Western District of Texas.

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. Stipulated court orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

FTC Announces Final Agenda for Identity Theft Conference

The Federal Trade Commission has announced the final agenda for a conference that will examine the state of identity theft now and how it may evolve in the future. The event will take place on May 24, 2017, in Washington, D.C.

FTC Acting Chairman Maureen K. Ohlhausen will deliver keynote remarks at the “Planning for the Future” conference. The event will bring together industry representatives, consumer advocates, government officials, and others.

The daylong conference will include panel discussions on how identity thieves acquire and use consumer information, how websites trade in stolen consumer information, the impact of identity theft on financial services, health care and other sectors, the challenges that identity theft victims face, and resources available to identity theft victims. In addition, FTC technical experts will give a presentation describing how consumer data available online is used by malicious actors.

The conference, which is free and open to the public, will be held at the FTC’s Constitution Center, 400 7th St., SW, Washington, DC 20024. The conference will be webcast live. Additional information about the conference can be found on the event page.

FTC Obtains Court Approval of Divestiture of Saltzer Medical Group by Idaho-based St. Luke’s Health System

A federal court has approved the divestiture of Saltzer Medical Group from Idaho-based St. Luke’s Health System as a result of the Federal Trade Commission’s successful challenge of St. Luke’s acquisition of Saltzer.

The order by the U.S. District Court for the District of Idaho follows a December 2015 order requiring a divestiture trustee to negotiate a divestiture of Saltzer and reestablish Saltzer as an independent provider of adult primary care services in the Nampa, Idaho, area. Change Healthcare, a Nashville, Tennessee, healthcare management company and subsidiary of McKesson, Inc., will manage and operate Saltzer as an independent primary care medical practice. The divestiture will help restore competition in the market for adult primary care services in the Nampa, Idaho, area.

In 2013, the FTC and the Idaho Office of the Attorney General challenged the acquisition as anticompetitive. The U.S. District Court in the District of Idaho held that the acquisition violated Section 7 of the Clayton Act and the Idaho Competition Act by creating a single dominant group of adult primary care physicians for patients living near Nampa, Idaho. In January 2014, the court ordered St. Luke’s to fully divest itself of Saltzer’s physicians and assets, and in February 2015, that ruling was affirmed by the U.S. Court of Appeals for the Ninth Circuit.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

FDIC Releases Final Handbook for Organizers of De Novo Institutions

FIL-17-2017
May 1, 2017

FDIC Releases Final Handbook for Organizers of De Novo Institutions

Printable Format:

FIL-17-2017 – PDF (PDF Help)

Summary:

Applying for Deposit Insurance – A Handbook for Organizers of De Novo Institutions provides an overview of the business considerations and statutory requirements that de novo organizers will face as they work to apply for deposit insurance and establish a new depository institution.

Statement of Applicability to Institutions with Less Than $1 Billion in Total Assets: This Financial Institution Letter applies to all proposed insured depository institutions.

Highlights:

The handbook provides a plain language overview of the requirements and considerations significant to the application process, and provides organizers a clear and transparent explanation of the path to obtaining deposit insurance.
The handbook offers guidance for navigating the three phases of establishing an insured institution: pre-filing activities, the application process, and pre-opening activities. It provides useful information for organizers of a new depository institution, and reflects comments from organizers and other interested parties during recent industry outreach events.
It does not establish new policy or guidance, or modify existing policy or guidance.
On December 22, 2016, the FDIC issued a draft of the handbook for comment. The final version provides additional clarification sought by commenters.
Recently, the FDIC held industry outreach meetings in San Francisco, New York, Atlanta, and Dallas to inform industry participants about the FDIC’s application process. Additional outreach events will be held on May 12, 2017, in Kansas City, Missouri, and May 31, 2017, in Chicago, Illinois.
Additional resources are available on the FDIC website dedicated to applications for deposit insurance.

Comptroller Discusses the Future of Finance and Responsible Innovation

News Release 2017-48 | April 28, 2017

CHICAGO—Comptroller of the Currency Thomas J. Curry today discussed the state of financial innovation and its potential to improve the lives of ordinary Americans and the bottom lines of businesses. During the remarks at an event sponsored by Northwestern University’s Kellogg School of Management, the Comptroller also highlighted what the Office of the Comptroller of the Currency is doing to encourage responsible innovation within the federal banking system.

FTC Imposes Conditions on Acquisition of Industrial Valve Manufacturer Pentair plc by Emerson Electric Co.

Industrial valve manufacturer Emerson Electric Co. has agreed to sell the switchbox business of Pentair plc to Stamford, Conn.-based Crane Co. in order to settle Federal Trade Commission charges that Emerson’s proposed $3.15 billion acquisition of Pentair would violate federal antitrust law.

Emerson and Pentair are manufacturers of industrial valves and control products, including switchboxes, which are widely used in the oil and gas, chemical, petrochemical, power, and other industries. Switchboxes are devices used to monitor and control valves that regulate the flow of liquids and gases in industrial facilities.

According to the complaint, the acquisition would combine the two leading manufacturers of switchboxes in the United States – which together control about 60 percent of the U.S. market. These market share numbers may underestimate the likelihood of anticompetitive effects to switchbox customers that would otherwise result from this transaction. Switchboxes perform a critical safety function, so brand reputation and product reliability are very important to customers. Emerson’s TopWorx and Pentair’s Westlock switchboxes are the most widely-used brands nationwide and, for many customers, the only acceptable brands of switchboxes.

Because of the time and investment required to develop switchboxes along with the time required to build a sufficient reputation with customers for quality and reliability, current and future competitors in the switchbox market are unlikely to restore the loss of competition caused by the acquisition, the complaint alleges.

Under the terms of the consent agreement, within 10 days after Emerson acquires Pentair, Emerson must divest Westlock Controls Corporation, the Pentair subsidiary that designs, manufactures, and sells switchboxes, to Crane Co. The order requires Emerson to provide Crane all of Westlock’s production facilities, intellectual property, confidential business information, and the opportunity to hire Westlock employees.

As a diversified designer and manufacturer of highly engineered industrial products, Crane has the financial strength and industry expertise and experience to acquire Westlock, and Crane is not currently a competitor in the U.S. switchbox market, according to the FTC.

Further details about the consent agreement – which includes an asset maintenance order and allows the Commission to appoint a monitor trustee – are set forth in the analysis to aid public comment for this matter.

Commission staff cooperated with antitrust agencies in Canada, the European Union, and Mexico, often working closely with their staff to analyze the proposed transaction and reaching outcomes that benefit consumers in the United States.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 2-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through May 30, 2017, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

NOTE: The Commission issues an administrative 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. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $40,654.

FTC Approves Sycamore Partners II, L.P. Application to Sell 323 Family Dollar Stores to Dollar General

Following a 15-day public comment period, the Federal Trade Commission has approved an application from Sycamore Partners II, L.P. to sell to Dollar General Corporation the assets it acquired under a 2015 FTC settlement.

To resolve concerns that Dollar Tree, Inc.’s acquisition of Family Dollar Stores, Inc. would be anticompetitive, the Commission required Dollar Tree to divest 330 Family Dollar stores. Dollar Tree selected Sycamore as the buyer, which the Commission approved. Dollar Express LLC, the company Sycamore formed to operate the divested stores, has entered into an agreement to sell the 323 Family Dollar stores it currently operates to Dollar General, subject to FTC approval. As part of the 2015 settlement, the Commission required Sycamore to obtain FTC approval if it chose to sell all or almost all the assets it acquired within three years of the acquisition.

Sycamore requested a shortening of the FTC 30-day public comment period on its sale of Dollar Express assets to Dollar General to allow Dollar Express to fulfill the majority of its commitments, including those made to approximately, 3,000 employees. Sycamore stated in its application that Dollar Express LLC, “can no longer operate as a viable standalone business,” due to changes in competitive conditions since the purchase.

The Commission vote approving the application and responses to commenters was 2-0. (FTC File No. 141 0207; the staff contact is Dan Ducore, Bureau of Competition, 202-326-2526.)

Acting Chairman Ohlhausen Welcomes FCC Action as Important Step to Restore FTC Consumer Protections

Acting Federal Trade Commission Chairman Maureen K. Ohlhausen issued the following statement on Federal Communications Commission Chairman Ajit Pai’s announcement of a process to reverse the FCC’s 2015 decision to treat broadband Internet access service as a Title II common carrier service:

“I welcome Chairman Pai’s announcement as an important step toward restoring the FTC’s ability to protect broadband subscribers from unfair and deceptive practices, including violations of their privacy. Those consumer protections were an unfortunate casualty of the FCC’s 2015 decision to subject broadband to utility-style regulation. I look forward to working with Chairman Pai and other stakeholders to return to broadband subscribers the consumer protections they deserve.”

The FTC is the nation’s primary consumer protection agency and the most active consumer privacy and data security enforcer in the world. The FTC has brought more than 150 privacy and data security-related cases against companies across the economy, including cases against many of the largest Internet companies.

Debt Collector Ordered to Pay $2 Million in Civil Penalties

At the Federal Trade Commission’s request, a federal court has ordered Timothy L. Ford, the president of Commercial Recovery Systems Inc. (CRS), to pay a $2 million civil penalty for violating the Fair Debt Collection Practices Act by falsely threatening debtors.

The court judgment resolves a case filed on the FTC’s behalf by the Department of Justice in January 2015, alleging that CRS’s collectors falsely claimed the company would sue debtors, garnish their wages, levy their bank accounts, or seize their property unless their debts were paid.

Ford and CRS are banned from the debt collection business under a permanent injunction issued in April 2016 by the U.S. District Court for the Eastern District of Texas, Sherman Division. The company’s former vice president, David Devany, is banned from the business under a settlement reached with the FTC in September 2016.

The action is part of Operation Collection Protection, an ongoing federal-state-local crackdown on collectors that use deceptive and abusive collection practices.

To learn more, read Facing Debt Collection? Know Your Rights and Fake Debt Collectors.

FTC Obtains Court Order Against Envelope-Stuffing Scheme

An envelope-stuffing operation is banned from selling business and work-at-home opportunities under a settlement with the Federal Trade Commission.

The settlement resolves FTC charges that David S. Brookman and his companies falsely told people they could earn up to $5,000 per week by stuffing and mailing “special advertising letters” from home. The letters turned out to be solicitation flyers for another bogus work-at-home program.

Under the stipulated final order, the defendants are also prohibited from misrepresenting any material fact in connection with the sale of any other product or service.

The order imposes a $1.2 million judgment against Brookman, which will be partially suspended when he has paid approximately $44,200 to the FTC. The full judgment will become due immediately if he is found to have misrepresented his financial condition.

The corporate defendants are Capital Enterprises Inc., formerly known as David Gates Inc. and also doing business as Gordon James Enterprises, Maxwell Gates Enterprises, Maxwell Scott Enterprises, Preston Lord Enterprises, and Warner Daniel Enterprises; Carson Lord Enterprises LLC; Java Enterprises LLC; Mason Grace Enterprises LLC, also d/b/a Mason Grace Ventures; and Preston Lord Enterprises of New York LLC, also d/b/a Preston Lord Enterprises.

The Commission vote approving the proposed stipulated final order was 2-0. The United States District Court for the Southern District of New York entered the order on April 20, 2017.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics, including envelope-stuffing and work-at-home opportunities, and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

FTC Action Stops Unsupported Claims for Opiate Withdrawal Treatments

FTC Announces Final Agenda for Identity Theft Conference

FTC Obtains Court Approval of Divestiture of Saltzer Medical Group by Idaho-based St. Luke’s Health System

FDIC Releases Final Handbook for Organizers of De Novo Institutions