FTC Announces Departure of Consumer Protection Bureau Director Jessica Rich

Federal Trade Commission Acting Chairman Maureen K. Ohlhausen announced today that Jessica Rich, Director of the Bureau of Consumer Protection, is leaving the agency on February 17 after 26 years of service.

“We are grateful to Jessica for her many years of service to the FTC and the public,” said Ohlhausen. “She is a pioneer in consumer protection who spearheaded major initiatives regarding consumers’ privacy, data security, and financial transactions. Many of the FTC’s programs bear her indelible mark.”

As Bureau Director, Rich managed eight consumer protection divisions and eight regional offices charged with stopping consumer fraud and deception and protecting consumers’ privacy. Under her tenure, the Bureau brought a series of major law enforcement actions that returned billions of dollars to consumers, including cases against Western Union, Volkswagen, Herbalife, Apple, Google, and Amazon. She was appointed Bureau Director by former Chairwoman Edith Ramirez in 2013. Prior to that, she served in a number of senior roles at the FTC, including Deputy Director of the Bureau, Associate Director of the Division of Financial Practices, and Acting Associate Director and Assistant Director of the Division of Privacy and Identity Protection.

During her tenure, Rich also led the FTC’s efforts to expand its technological expertise. She created the FTC’s Office of Technology Research and Investigations (OTech) to train staff and assist with tech-related investigations, reports, and public workshops.  She hired technologists and attorneys with tech backgrounds to bolster the FTC’s understanding of the evolving marketplace and perform original research. She developed influential FTC policy reports, including reports on the Internet of Things, Big Data, data brokers, mobile apps, and cross-device tracking. And she oversaw public fora on a range of tech-related matters, including ransomware, Smart TVs, drones, and crowdfunding.

As a division manager earlier in her career, Rich spearheaded the FTC’s privacy and data security program, building it from a small team to one of the agency’s signature programs. Among other things, Rich led development of the FTC rules protecting children’s online privacy (Children’s Online Privacy Protection Rule) and sensitive financial information (Safeguards Rule), and brought precedent-setting enforcement actions to address the privacy and data security practices of Microsoft, BJ’s Warehouse, DSW, TJX, and ChoicePoint.

Rich, who joined the agency in 1991, is a recipient of the FTC Chairman’s Award, the agency’s highest award for meritorious service, and a graduate of Harvard University and New York University Law School.

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 Providing Full Refunds to Mercola Brand Tanning System Purchasers

The Federal Trade Commission is mailing refunds that total $2.59 million to more than 1,300 people who bought Mercola indoor tanning systems. These refunds are the result of a 2016 settlement between the FTC and Dr. Joseph Mercola and his companies.

According to the FTC’s complaint, the defendants claimed that their Mercola brand D-Lite, SunSplash, and Vitality indoor tanning systems are safe, that research proves indoor tanning does not increase the risk of melanoma skin cancer, and that its systems can reverse the appearance of aging. The FTC’s complaint alleged that these claims are false and not supported by science.

As part of the settlement, the defendants are banned from selling indoor tanning systems and agreed to provide refunds to people who bought tanning systems after January 1, 2012, and submitted a completed a claim form by October 31, 2016.  Customers will receive an average refund of $1,897.  Recipients should deposit or cash checks within 60 days.

The FTC never requires people to pay money or provide account information to cash refund checks. If you have questions about the case, contact the FTC’s refund administrator, Rust Consulting, Inc., at 1-877-418-8082.

For more information about the FTC’s refund program, visit www.ftc.gov/refunds.

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 Charges That Shire ViroPharma Inc. Abused Government Processes Through Serial, Sham Petitioning to Delay Generics and Maintain its Monopoly over Vancocin HCl Capsules

The Federal Trade Commission filed a complaint in federal district court charging Shire ViroPharma Inc. (“ViroPharma”) with violating the antitrust laws by abusing government processes to delay generic competition to its branded prescription drug, Vancocin HCl Capsules. The complaint alleges that because of ViroPharma’s actions, consumers and other purchasers paid hundreds of millions of dollars more for their medication.

“I have long advocated that the Commission target abuses of government processes that significantly harm competition and consumers; the Commission’s action today is another example of this ongoing commitment,” said FTC Acting Chairman Maureen K. Ohlhausen. “Generic medications can save consumers millions of dollars. When we have reason to believe that a branded drug company misuses government processes to unlawfully maintain a monopoly by delaying generic entry, the FTC will act to protect competition.”

Vancocin Capsules are used to treat C.difficile-associated diarrhea, or CDAD, a sometimes life-threatening bacterial infection. According to the complaint, Vancocin Capsules are not reasonably interchangeable with any other medications used to treat CDAD, and no other medication constrained ViroPharma’s pricing of Vancocin Capsules. After ViroPharma acquired the rights to Vancocin Capsules in 2004, it raised the price of the drug significantly and continued to do so through 2011.

The FTC alleges that to maintain its monopoly, ViroPharma waged a campaign of serial, repetitive, and unsupported filings with the U.S. Food and Drug Administration and courts to delay the FDA’s approval of generic Vancocin Capsules, and exclude competition. According to the FTC, ViroPharma submitted 43 filings with the FDA and filed three lawsuits against the FDA between 2006 and 2012. The number and frequency of ViroPharma’s petitioning at the FDA are many multiples beyond that by any drug company related to any other drug. ViroPharma knew that it was the FDA’s practice to refrain from approving any generic applications until it resolved any pending relevant citizen petition filings. Viropharma intended for its serial filings to delay the approval of generics, and thus competition and lower prices.

The FTC alleges that ViroPharma started its petitioning campaign after a 2006 FDA recommendation that companies seeking approval for generic equivalents of Vancocin Capsules could establish bioequivalency through test tube dissolution studies rather than by more time-consuming and costly studies involving sick patients, which generally are required only to support new drug applications.

According to the complaint, in filing after filing, ViroPharma failed to provide any clinical data to support its arguments. Even after a panel of 16 independent scientific and medical experts considered ViroPharma’s unsupported arguments and then voted unanimously in favor of the FDA’s guidance for generic Vancocin Capsules, ViroPharma continued to repeat its rejected arguments, the complaint alleges.

According to the complaint, even though the FDA had completed its review of at least one application for generic Vancocin Capsules by July 2010, it did not approve any application for generic Vancocin Capsules until April 2012, the same day that it disposed of all of ViroPharma’s citizen petition filings, labeling ViroPharma’s positions as “unsupported” and “without merit.” The FTC alleges that, absent ViroPharma’s abuse of serial petitioning to exclude competitors, generic entry likely would have occurred by July 2010, or even earlier.

The FTC seeks a court order permanently prohibiting ViroPharma from submitting repetitive and baseless filings with the FDA and the courts, and from similar and related conduct as well as any other necessary equitable relief, including restitution and disgorgement.

The Commission vote to file the complaint was 3-0. Both a public and sealed version were filed in the U.S. District Court for the District of Delaware on February 7, 2017.

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 court will decide the case.

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.

VIZIO to Pay $2.2 Million to FTC, State of New Jersey to Settle Charges It Collected Viewing Histories on 11 Million Smart Televisions without Users’ Consent

VIZIO, Inc., one of the world’s largest manufacturers and sellers of internet-connected “smart” televisions, has agreed to pay $2.2 million to settle charges by the Federal Trade Commission and the Office of the New Jersey Attorney General that it installed software on its TVs to collect viewing data on 11 million consumer TVs without consumers’ knowledge or consent.

The stipulated federal court order requires VIZIO to prominently disclose and obtain affirmative express consent for its data collection and sharing practices, and prohibits misrepresentations about the privacy, security, or confidentiality of consumer information they collect. It also requires the company to delete data collected before March 1, 2016, and to implement a comprehensive data privacy program and biennial assessments of that program.

According to the agencies’ complaint, starting in February 2014, VIZIO, Inc. and an affiliated company have manufactured VIZIO smart TVs that capture second-by-second information about video displayed on the smart TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices.

In addition, VIZIO facilitated appending specific demographic information to the viewing data, such as sex, age, income, marital status, household size, education level, home ownership, and household value, the agencies allege. VIZIO sold this information to third parties, who used it for various purposes, including targeting advertising to consumers across devices, according to the complaint.

According to the complaint, VIZIO touted its “Smart Interactivity” feature that “enables program offers and suggestions” but failed to inform consumers that the settings also enabled the collection of consumers’ viewing data. The complaint alleges that VIZIO’s data tracking—which occurred without viewers’ informed consent—was unfair and deceptive, in violation of the FTC Act and New Jersey consumer protection laws.

The $2.2 million payment by VIZIO includes a payment of $1.5 million to the FTC and $1 million to the New Jersey Division of Consumer Affairs, with $300,000 of that amount suspended.

The Commission vote approving the complaint and proposed order was 3-0, with Acting Chairman Maureen K. Ohlhausen issuing a concurring statement. The FTC filed the complaint and order in the U.S. District Court for the District of New Jersey.

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 Releases Staff Study Examining Commission Merger Remedies between 2006 and 2012

A new Federal Trade Commission report, The FTC’s Merger Remedies 2006-2012: A Report of the Bureaus of Competition and Economics, finds that the agency’s process for maintaining competition when companies merge is generally effective.

“The report demonstrates that in the vast majority of cases the Commission’s remedies protect or restore competition. Divestitures of ongoing businesses are particularly successful. The study also provides valuable insight on how to improve the divestiture process,” said Maureen K. Ohlhausen, Acting Chairman of the Federal Trade Commission.

Some mergers raise competitive concerns in only a subset of the markets in which the merging parties operate. Consent decrees can often resolve those concerns by requiring companies to divest certain assets and take other action to protect competition.

The study examined 89 merger orders issued by the Commission between 2006 and 2012, including those requiring divestitures, as well as non-structural relief, to address anticompetitive effects. Staff used three methods to conduct the study. First, staff examined 50 orders using a case study method similar to that used in the Commission’s previous remedy study, issued in 1999. Staff then supplemented its findings by interviewing additional market participants and requiring significant competitors to submit seven years of relevant sales data. Second, staff evaluated an additional 15 orders affecting supermarkets, drug stores, funeral homes, dialysis clinics, and other health care facilities by examining responses to questionnaires directed to the Commission-approved divestiture buyers in the relevant transactions. Finally, staff evaluated 24 orders affecting the pharmaceutical industry using both internal information and publicly available data.

In analyzing the success of the 50 merger orders in the case study component, staff considered whether the remedy had maintained or restored competition in the relevant market. The study found that all of the divestitures involving an ongoing business succeeded. Most divestitures of limited packages of assets also succeeded, though they fared less well. Remedies addressing vertical mergers also achieved their remedial goals.

The study also examined the remedy process more generally. The study confirmed that the process by which the Commission designs and implements merger remedies is generally effective, but also identified certain areas the Commission could improve. Based on those findings, the FTC has developed best practices related to the merger remedy process.

The Commission voted 3-0 on January 19, 2017 to issue the report.

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.

Stratford Career Institute Agrees to Settle FTC Charges

Stratford Career Institute has agreed to stop making allegedly deceptive claims about educational programs under a settlement with the Federal Trade Commission.

The settlement resolves FTC charges brought in February 2016, alleging that the correspondence school misled consumers about its high school “diploma” program, which failed to meet the basic requirements set by most states. Consumer complaints and Stratford’s records showed that consumers who tried to use the company’s diplomas were often told by prospective employers and college admissions officers that the program was not equivalent to a traditional high school diploma.

Under the stipulated order, Stratford is prohibited from making false claims about educational programs and, when marketing high school equivalency programs, it is required to disclose that some schools and employers may not recognize the diploma or equivalency credential.

The order also requires Stratford to notify current students of their right to cancel enrollment in the high school diploma program, and to stop efforts to collect money from those who cancel.

The settlement imposes a $6.5 million judgment that will be partially suspended when the company has paid $250,000. The full judgment will become due immediately if Stratford is found to have misrepresented its financial condition. For more information, consumers should visit ftc.gov/stratford.

The Commission vote approving the stipulated final order was 3-0. The U.S. District Court for the Northern District of Ohio entered the order on January 31, 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 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 Returns Nearly $20 Million in Additional Refunds to T-Mobile Customers

The Federal Trade Commission is mailing refund checks totaling nearly $20 million to more than 617,000 T-Mobile customers who had third-party charges added to their mobile bills. These refunds are the result of a 2014 settlement with T-Mobile, which also involved all 50 states and the District of Columbia, as well as the Federal Communications Commission.

As part of the settlement, T-Mobile agreed to fully refund unwanted third-party charges to its customers who applied for a refund.  The company also agreed to remit to the FTC any remaining funds up to $90 million that were not distributed under the order. The FTC is using the remaining settlement money to send checks to customers who had third-party charges placed on their bills but did not participate in T-Mobile’s refund program.

The average check amount is $32. Recipients should deposit or cash checks within 60 days.

The FTC never requires people to pay money or provide account information to cash refund checks. If you have questions about the case, contact the FTC’s refund administrator at 1-844-746-4695.

To learn more about the FTC’s refund program, visit www.ftc.gov/refunds.

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.

Federal Trade Commission, Class Action Settlements Require Volkswagen to Repair or Buy Back 3.0 Liter TDI Diesel Vehicles

The Federal Trade Commission announced a settlement today that requires Volkswagen Group of America to fully compensate consumers who purchased 3.0-liter TDI diesel vehicles through a combination of repairs, additional monetary compensation, and buybacks for certain models.

Under the federal court order, owners of older vehicles (model years 2009-2012; see fact sheet) will be able to sell their car back to Volkswagen at favorable prices and obtain full compensation for their losses. Consumers are eligible to receive approximately $26,000 to $58,000 for a buyback, depending on the model, mileage, and trim of the car. These owners can also opt to keep their cars and receive an emissions modification that would improve their vehicle’s emissions, if a modification is approved by the Environmental Protection Agency and the California Air Resources Board. Consumers receiving an emissions modification will also receive monetary compensation.

For owners and lessees of newer vehicles (model years 2013-2016; see fact sheet) Volkswagen is expected to obtain regulatory approval for an emissions repair that brings the cars into full compliance with originally certified emission standards and does not materially reduce the performance of the vehicle. If Volkswagen obtains EPA and CARB approval within the timeframe in the FTC Order, consumers will receive this repair and additional monetary compensation ranging from approximately $8,500 to $17,600. This means consumers with newer vehicles will receive the car they thought they purchased – plus a substantial additional payment.  If an emissions repair is not available under the timeframe in the FTC Order, then Volkswagen must offer to buy back those models and provide lease terminations.

Certain consumers who leased an affected vehicle are eligible for substantial compensation. Options for lessees vary based on make, model, model year, and the availability of approved emissions modifications or repairs. Certain owners who sold their TDI vehicles after the Volkswagen defeat device issue became public are also eligible for compensation.

This chart shows the range of approximate payments consumers would receive under the FTC Order.

The order will return more than a billion dollars to consumers, with the total amount depending on future events. If no emissions repair is approved and if the company must therefore offer buybacks for all 3.0-liter TDI models, Volkswagen may have to pay as much as the full $4 billion judgement reflected in the order. If an emissions repair is approved, the Commission expects consumers to receive in excess of $1.25 billion from the 3.0-liter vehicle settlement. This amount includes a contribution from Bosch, which manufactured the defeat device. The Commission previously obtained a $10 billion judgment to compensate the larger group of consumers who had 2.0-liter TDI Volkswagen cars. Under the FTC settlement, Volkswagen also will pay the cost of administering the entire settlement program, including vehicle repairs, notifications, and other logistics.

The FTC order also includes generous loan forgiveness provisions for consumers eligible for buybacks, additional limited warranties and lemon law-type protections for consumers eligible to receive emissions modifications or repairs, special protections for those serving in the armed forces, and special protections for consumers in rural areas who may be far from the nearest dealer. The order also requires an independent, court-appointed claims supervisor to monitor Volkswagen’s compliance with stringent claims process deadlines.

The FTC sued Volkswagen in March, charging that the company deceived consumers with its advertising campaign used to promote its supposedly “Clean Diesel” Volkswagens and Audis, which falsely claimed that the cars were low-emission, environmentally friendly, met emissions standards, and would maintain a high resale value.

This order completes the FTC’s case against Volkswagen by ensuring that all consumers who purchased a TDI diesel engine vehicle will be fully compensated for their losses. In a companion matter, hundreds of private actions have submitted a proposed class action settlement consistent with the FTC’s order. A related settlement with the Department of Justice (DOJ) and Environmental Protection Agency (EPA) resolves the Clean Air Act violations those agencies alleged.

Consumers can determine if they are eligible for compensation, and if so for how much at VWCourtSettlement.com and AudiCourtSettlement.com. They can also use these websites to submit claims, make appointments, and receive updates. Monetary relief will become available when the DOJ/EPA and private settlements become final.

The Commission vote approving the proposed stipulated order was 3-0. It is subject to court approval. The FTC filed the proposed stipulated order in the U.S. District Court for the Northern District of California.

NOTE: Stipulated 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.

Marketer of Water Filtration Systems Settles with FTC, Agrees to Drop Misleading ‘Made in USA’ Claims

A Georgia-based distributor of water filtration systems will stop making misleading unqualified claims that its products are made in the United States, under a settlement with the Federal Trade Commission.

In its complaint against iSpring Water Systems, LLC, the FTC alleged that the company deceived consumers with false, misleading, or unsupported claims that its water filtration systems and parts are “Built in USA,” “Built in USA Legendary brand of water filter,” and “Proudly Built in the USA.” In fact, according to the complaint, iSpring’s products either are wholly imported or are made using a significant amount of inputs from overseas.    

“Supporting American manufacturing is important to many consumers. If a product is advertised or labelled as ‘made’ or ‘built’ in the USA, consumers rightly expect that to be the case when they part with their hard-earned money,” said Acting FTC Chairman Maureen Ohlhausen. “This is an important issue for American business and their customers, and the FTC will remain vigilant in this area.”

iSpring

iSpring markets water filtration products to consumers on its website, and through third parties that include Amazon, Overstock, and the websites of Sears, Home Depot, and Walmart.

The stipulated final order prohibits iSpring from making unqualified “Made in USA” claims for any product unless it can show that the product’s final assembly or processing – and all significant processing – take place in the United States, and that all or virtually all ingredients or components of the product are made and sourced in the United States. iSpring also is prohibited from making any country-of-origin representation about its products unless it possesses and relies upon a reasonable basis for that representation. The order permits iSpring to make qualified “Made in USA” claims as long as they include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. 

More information about the FTC’s consent agreement can be found in the analysis to aid public comment.

The Commission vote to issue the complaint and accept the proposed consent order was 3-0. 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 March 3, 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.

The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides further guidance on the Made in USA standard.

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.

OCC Supports Earned Income Tax Credit Awareness Day

News Release 2017-14 | January 27, 2017

WASHINGTON—Comptroller of the Currency Thomas J. Curry issued the following statement recognizing Earned Income Tax Credit (EITC) Awareness Day.

The Office of the Comptroller of the Currency (OCC) is pleased to support Earned Income Tax Credit Awareness Day, a nationwide effort to educate the public about a valuable tax benefit for working families and free tax preparation. This is the 11th anniversary of EITC Awareness Day, which continues to call attention to this program. Working Americans who claim the EITC may receive a tax refund that offers the opportunity to help families achieve short-term financial goals, such as creating savings for an emergency, rainy day; or paying bills; or reaching long-term goals like making a down payment on a house or opening a savings account for college and retirement.

National banks and federal savings associations have an opportunity to educate their customers on financial capability programs, services, and products. OCC-regulated institutions are encouraged to work in their communities to promote the EITC and free tax assistance programs, as well as to partner with nonprofit organizations and government agencies. Examples of bank EITC activities include:

  • Promoting and providing low-cost bank products and services that enable tax refund recipients to deposit their income tax refunds directly into their accounts.
  • Encouraging the use of tax refunds in bank-sponsored savings match programs, also known as Individual Development Accounts.
  • Sponsoring Internal Revenue Service Volunteer Income Tax Assistance (VITA) programs in bank branches and supporting bank employees who volunteer as tax preparers in low- and moderate-income communities.

Created in 1975, the EITC is the federal government’s largest program for helping working Americans. It is a refundable tax credit for people who work but do not earn high incomes. Nationwide, in 2016, more than 27 million received more than $67 billion in EITCs. The average amount of EITC received nationwide was more than $2,455.

The OCC provides resources on the EITC on its website at http://www.occ.gov, including the Leveraging Earned Income Tax Credits to Reach New Bank Customers Fact Sheet. OCC’s District Community Affairs Officers are available nationwide to provide information about this and other initiatives to national banks and federal savings associations interested in promoting the EITC in their communities.

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