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FTC Returns Money to Victims of Business Directory Scheme

The Federal Trade Commission is mailing 974 checks totaling more than $535,000 to businesses and nonprofit organizations that lost money to the Fair Guide business directory scheme, which tricked them into paying for online directory listings they didn’t want. As a result of the FTC’s action, the company and its principals were banned from the business directory business.

Organizations that lost money are getting back approximately 24 percent of their loss, an average of $549.37. 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.

People who have questions about the case can contact the refund administrator, Rust Consulting, Inc., at 877-657-8808.

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.

FTC Announces Preliminary Agenda for Hearing Health and Technology Workshop

The Federal Trade Commission today announced the preliminary agenda for Now Hear This: Competition, Innovation, and Consumer Protection Issues in Hearing Health Care, a workshop that will explore competition, innovation, and consumer protection issues raised by hearing health and technology.

The workshop, which is free and open to the public, will take place in Washington, D.C. on April 18, 2017 and will include opening remarks from FTC Acting Chairman Maureen K. Ohlhausen.

Discussion topics for researchers, health care providers, industry representatives, consumer representatives, policymakers and others will include:

Consumer Information and Search Costs
Innovations in Hearing Health Technology
Innovations in Hearing Health Care Delivery
The Costs and Benefits of Regulation

A final agenda for the workshop, including panelists, will be released prior to the workshop.

FTC Requires Kidney Dialysis Chain DaVita, Inc. to Divest Assets as a Condition of Acquiring Competitor Renal Ventures Management LLC

The Federal Trade Commission will require the national outpatient kidney-dialysis chain DaVita, Inc. to divest its ownership interest in seven clinics – five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas – as part of a settlement resolving charges that its $358 million acquisition of competitor Renal Ventures Management, LLC would be anticompetitive.

DaVita is the second-largest provider of outpatient dialysis services in the United States and Renal Ventures is the seventh-largest. DaVita will divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. Physicians Dialysis has been in business since 1990 and currently operates several outpatient dialysis clinics.

Hemodialysis – the filtering of a person’s blood to replace the functions of a kidney – is a therapy that most patients with end-stage renal disease need to stay alive. Most patients must visit a clinic as often as three times per week for treatment, for three to five hours at a time, to obtain the life-sustaining therapy. Many end stage renal disease patients are very ill, making it difficult for them to travel too far from their home for treatment. As a result, competition between dialysis clinics usually happens at the local level.

According to the complaint, the acquisition would lead to significant anticompetitive effects in the New Jersey markets of Brick, Clifton, Somerville, Succasunna, and Trenton, and in the Dallas-area markets of Denton and Frisco. Currently, DaVita and Renal Ventures clinics compete directly with each other in these markets, and the merger would represent either a merger to monopoly or a reduction of competitors from three to two. Without that competition, the likely result would be reduced quality and higher prices for dialysis patients, the Commission alleges.

The Commission also alleges that new entry of competing dialysis in these seven markets is not likely, because the markets do not have sufficient available kidney specialists to support new competition.

Under the terms of the proposed settlement, DaVita, Inc. must obtain agreements from the medical director of each divested clinic to continue providing physician services after it transfers ownership to PDA-GMF Holdco; obtain consent from the relevant landlords to transfer leases for the facilities to the buyer; and provide the buyer an opportunity to interview and hire employees from the divested clinics.

Also under the proposed settlement, DaVita is barred from contracting with the medical directors of the seven clinics for three years, and it must provide transition services for up to 24 months. The proposed settlement also allows the FTC to appoint a monitor to ensure DaVita’s compliance.

Details about the case are set forth in the analysis to aid public comment for this matter. 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 package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through April 27, 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 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.

FTC Releases 2016 Annual Highlights

The Federal Trade Commission released the agency’s 2016 Annual Highlights, which demonstrate the agency’s ongoing efforts to protect consumers and promote competition over the past calendar year, and include some of the Comission’s biggest successes to date.

“2016 was a historic year for the FTC. We obtained almost $12 billion in redress for consumers, and took action in more than a dozen merger cases to preserve competition,” Acting Chairman Ohlhausen said. “The Commission’s enforcement, policy and consumer and business education work shows our strong commitment to protecting consumers and promoting competition and innovation.”

The agency’s Enforcement Highlights address its key legal actions across many sectors, including health care, technology and other consumer products and services. The Commission continued to promote competition through its merger challenges and anticompetitive conduct cases. Most notably, the Commission successfully blocked three mergers, preserving competition in the market for office supplies sold to large business customers and in two local markets for hospital services. The Commission also brought two cases against companies for using unlawful means to maintain a monopoly, increasing consumer prices, and limiting access and innovation. On the consumer protection side, the Commission obtained the largest false advertising settlement in its history with Volkswagen Group of America and secured a historic settlement with Herbalife that required the company to fundamentally restructure its business and pay $200 million to compensate consumers who lost money. Privacy and data security continued to be a high priority for the agency, particularly in the mobile marketplace. For example, the agency alleged that digital advertising company Turn deceived consumers by tracking them online and through their mobile apps, even after consumers took steps to opt out of such tracking.

On the policy front, the FTC filed eight amicus briefs on topics such as pharmaceutical markets, reverse payments and the Fair Credit Reporting Act. Staff conducted 20 workshops and conferences on a range of topics including state regulation of auto sales, solar distribution generation, security for startup businesses and a number of tech-driven workshops in its Fall Technology Series. The Commission and staff also published 19 reports on topics including sharing economy platforms, big data and fraud.

Finally, the FTC’s Education Highlights acknowledge the agency’s work to help businesses understand their rights and legal responsibilities, and inform people about ways to avoid fraud and deceptive business practices. In addition to the many educational products the agency released in 2016, the FTC published more than 30 blog posts through its Competition Matters blog on topics like merger remedies and antitrust laws in job markets, and more than 140 blog posts for business people and attorneys. The FTC also published almost 200 blog posts for consumers in English and more than 140 blog posts for consumers in Spanish on topics including scams pushing people to pay with iTunes gift cards and IRS scams. The Commission also unveiled its free mobile-friendly financial readiness tool at Military.Consumer.gov, which helps members of the military community navigate personal financial decisions in light of the unique challenges they face, such as frequent relocations and deployment.

More statistics are available in the Stats & Data 2016 infographic. Archives of past FTC Annual Highlights and Reports are also available online.

FDIC Releases Report on its Youth Savings Pilot and Launches New Network to Support Youth Savings Collaborations

FIL-13-2017
March 28, 2017

FDIC Releases Report on its Youth Savings Pilot and Launches New Network to Support Youth Savings Collaborations

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FIL-13-2017 – PDF (PDF Help)

Summary:

The FDIC released a report on its Youth Savings Pilot program, which identifies promising approaches to combining financial education with the opening of safe, low-cost savings accounts for school-aged children. The report from the FDIC’s two-year Youth Savings Pilot is based on the experiences of 21 diverse participating banks. The report describes promising practices banks can use to develop or expand their own youth savings programs. Banks are invited to join the Youth Banking Network if they are interested in information resources to support their school-based savings initiatives.

Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter applies to all FDIC-insured institutions.

Highlights:

Linking Youth Savings with Financial Education: Lessons from the FDIC Pilot, summarizes the experiences of 21 diverse participating banks during the FDIC’s two-year pilot, in designing and implementing youth savings programs. It identifies promising approaches and lessons learned from combining traditional, classroom-based financial education with the opportunity to open a safe, low-cost savings account. The report defines a range of models that offer banks flexibility to adapt to varying opportunities to promote youth savings.
The FDIC is launching a Youth Banking Network to support insured financial institutions with new and existing school-based savings programs. The FDIC will support Network participants by conducting periodic conference calls and developing information resources on topics such as how to engage parents of school-aged children.
Financial education and school-based savings programs encourage savings habits at a formative age and have the potential to promote economic inclusion for entire families.
To read the report or learn more about joining the Youth Banking Network, visit the new Youth Banking resource center at www.fdic.gov/youthsavings.

Office Supply Operators Banned from Telemarketing to Settle FTC Charges

The operators of an office supply business accused of bilking millions of dollars from nonprofit organizations and small businesses will be banned from telemarketing under a settlement with the Federal Trade Commission.

The settlement resolves FTC charges filed in December 2015 that the defendants deceived small business consumers into buying office supply products at higher prices or in larger quantities than they had agreed to. When consumers complained they received too many products at prices up to 10 times higher than expected, the defendants aggressively sought payment or demanded that consumers pay hefty return shipping and restocking fees to send the unwanted products back. A federal court halted the operation and froze the defendants’ assets pending litigation.

Under a stipulated final order announced today, Mia L. McCrary, John B. Hart, Norma J. Hart, Liberty Supply Co., Nor-Jay Enterprises Inc. and Texas 110 Inc. will be banned from telemarketing and from misrepresenting any product or service. Before asking consumers for their billing information or consent to buy any product or service, the defendants must clearly disclose the total cost, all material restrictions or conditions, the terms of any refund policy and, if they have a policy not to make refunds, cancellations, exchanges, or repurchases, a statement to that effect.

The order also prohibits the defendants from causing consumers’ billing information to be submitted for payment without the consumer’s express informed consent, and from selling or otherwise benefitting from consumers’ personal information and failing to dispose of it properly.

The order imposes a $4,560,000 judgment against Mia McCrary, John B. Hart and Liberty Supply Co., and a $2,200,000 judgment against Norma Hart and Nor-Jay Enterprises, which will be partially suspended when John Hart and Norma have surrendered over half a million dollars in certain assets and Mia McCrary has surrendered a $10,000 bank account and certain property. The full judgment will become due immediately if the defendants have misrepresented their financial condition.

The Commission vote approving the stipulated final order was 3-0. The U.S. District Court for the Eastern District of Texas, Sherman Division entered the order on March 23, 2017.

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

To learn more, read the FTC’s Small Business Scams.

FTC Approves Final Order Preserving Competition in 3 Natural Gas Production Areas off the Coast of Louisiana

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that the proposed merger of energy infrastructure companies Enbridge Inc. and Spectra Energy Corp likely would harm competition in the market for pipeline transportation of natural gas in three production areas off the coast of Louisiana.

First announced in February 2017, the FTC’s complaint alleged the merger likely would reduce natural gas pipeline competition within the Green Canyon, Walker Ridge and Keathley Canyon production areas in the Gulf of Mexico. In portions of the affected areas, the FTC alleged, the merging parties’ pipelines are the two pipelines located closest to certain wells and, as a result, are likely the lowest cost pipeline transportation options for those wells.

The order requires that Enbridge establish firewalls to limit its access to non-public information about the Discovery Pipeline. Also, with two limited exceptions, board members of the Spectra-affiliated companies that hold a 40 percent share in the Discovery Pipeline must recuse themselves from any vote involving the pipeline.

The Commission vote approving the final order was 2-0. (FTC File No. 161 0215; the staff contact is Eric Cochran, Bureau of Competition, 202-326-3454.)

FTC Settlement Halts Allegedly Abusive Practices by Company Collecting Debts for More Than 500 Municipalities

An operation that collects debts owed to municipalities has agreed to stop engaging in allegedly illegal collection tactics under a settlement with the Federal Trade Commission.

According to the FTC, American Municipal Services Corporation and its owners, Lawrence Bergman and Gregory Pitchford, collect court fines, parking tickets, and debts for utility bills and other services on behalf of more than 500 municipalities in various states, including Alabama, Arkansas, Illinois, Kansas, Louisiana, Mississippi, Oklahoma and Texas.

Using “Warrant Enforcement Division” or “Municipal Enforcement Division” letterhead that falsely suggested that the letter was coming from a government agency, the defendants sent consumers an initial warning letter, and then a “FINAL NOTICE” falsely claiming, among other things, that the consumer was subject to imminent arrest for nonpayment, that their driver’s license may be suspended for nonpayment, and that the debts would be reported to consumer reporting agencies.

The defendants, who also employ collectors who call people in English and Spanish, are charged with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA).

Under a proposed stipulated order, the defendants are prohibited from making misrepresentations to collect debts, including: that an arrest warrant has been issued, that consumers must act immediately to avoid arrest, that failure to respond may lead to suspension of a driver’s license, that the defendants’ communications are from a government entity with arrest power, and that consumers’ payment status will be reported to credit reporting agencies.

The order also prohibits the defendants from making unsubstantiated claims and violating the FTC Act and the FDCPA, and imposes a $350,000 judgment that must be paid within seven days.

The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 2-0. The U.S. District Court for the Eastern District of Texas, Sherman Division, entered the order on March 21, 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. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

FTC and State of Nebraska Co-Host Twitter Chat Today on Economic Liberty

The Federal Trade Commission will co-host a Twitter chat with the office of Nebraska Gov. Pete Ricketts at 3 p.m. ET today on the FTC’s new Economic Liberty Task Force, the first major policy initiative of Acting FTC Chairman Maureen K. Ohlhausen.

The chat will address regulatory hurdles to job growth, including the growth of state licensing requirements for a variety of occupations. Nearly 30 percent of American jobs require a government license today, up from less than five percent in the 1950s, resulting in 2.5 million fewer jobs and higher costs to consumers. For some professions, occupational licensing is necessary to protect public health and safety. But in many situations, the expansion of occupational licensing threatens economic liberty and blocks job opportunities without benefiting consumers.

WHAT:	The Federal Trade Commission will co-host a Twitter chat on FTC’s Economic Liberty Task Force.
WHEN:	Today, March 23, 2017 at 3 p.m. ET.
PARTICIPATING:	Follow @FTC, @MOhlhausenFTC, @NEgovoffice. Join the conversation at #EconLibertyFTC.

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

After Two Chicago-area Hospital Systems Abandon Proposed Merger, FTC Dismisses Case from Administrative Trial Process

Following the decision earlier this month by Advocate Health Care Network and NorthShore University HealthSystem to abandon their proposed merger, the Federal Trade Commission has dismissed its case challenging the transaction before the Commission’s administrative trial process.

FTC Acting Chairman Maureen K. Ohlhausen issued the following statement:

“Historically, the Advocate and NorthShore hospital systems competed vigorously to be included in health insurance companies’ hospital networks. Having reason to believe their merger would increase costs, and harm quality and innovation for patients and their families in the northern suburbs of Chicago, the Commission sued in federal district court and in the FTC’s administrative process. The Seventh Circuit and ultimately the district court agreed, validating the FTC’s analyses and methodologies. With the two hospital systems remaining separate, consumers will continue to reap the benefits of this competition, which include lower prices and higher quality service.”

The companies’ decision to terminate the transaction came after a March 7, 2017 ruling by the U.S. District Court for the Northern District of Illinois granting the FTC’s and State of Illinois’s request for a preliminary injunction.

In December 2015, the Commission challenged the proposed merger, alleging that the merged entity would have operated a majority of the hospitals in the area, and controlled more than 50 percent of the general acute care inpatient hospital services. The likely result would have been significant harm to consumers – with rising healthcare costs and diminished incentives to upgrade services and improve quality, according to the complaint.

The U.S. District Court for the Northern District of Illinois initially denied the request for a preliminary injunction, which would have prevented the parties from consummating the merger, while maintaining the status quo pending a proceeding in administrative court. Stating that the district court’s findings regarding the geographic market were “clearly erroneous,” the U.S. Court of Appeals for the Seventh Circuit remanded the case back to the district court for further action, after which the district court granted the preliminary injunction.

The administrative trial was scheduled to begin 21 days after the U.S. District Court for the Northern District of Illinois ruled on the Commission’s request for a preliminary injunction as remanded by the Seventh Circuit, but when the preliminary injunction was granted, the parties abandoned the transaction. Under FTC rules, a matter in the administrative trial process must be terminated before the FTC can formally close the investigation. The Commission’s vote to dismiss the complaint was 2-0.

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FDIC Releases Report on its Youth Savings Pilot and Launches New Network to Support Youth Savings Collaborations

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