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FTC, NHTSA to Conduct Workshop on June 28 on Privacy, Security Issues Related to Connected, Automated Vehicles

The Federal Trade Commission and the National Highway Traffic Safety Administration (NHTSA) will hold a workshop on June 28, 2017 in Washington, D.C., to examine the consumer privacy and security issues posed by automated and connected motor vehicles.

The workshop will feature opening remarks by Acting FTC Chairman Maureen K. Ohlhausen and will bring together a variety of stakeholders, including industry representatives, consumer advocates, academics, and government regulators, to discuss various issues related to connected and automated vehicles that collect data. They include:

the types of data vehicles with wireless interfaces collect, store, transmit, and share;
potential benefits and challenges posed by such data collection;
the privacy and security practices of vehicle manufacturers;
the role of the FTC, NHTSA, and other government agencies regarding privacy and security issues related to connected vehicles; and
self-regulatory standards that might apply to privacy and security issues related to connected vehicles.

Modern motor vehicles increasingly are being equipped with technologies that enable them to access information via the Internet and gather, store and transmit data for entertainment, performance and safety purposes. Automated vehicles, vehicles with Vehicle-to-Vehicle Communications technology, and other connected vehicles (i.e. with some form of wireless connectivity) can provide important benefits to consumers and have the potential to revolutionize motor vehicle safety. At the same time, these automated and connected vehicles are expected to generate an enormous amount of data, some of which will be personal and sensitive, such as real time precise geolocation data and the contents of driver communications that result when drivers connect their mobile phones to a vehicle’s computer system. The workshop will explore the consumer privacy and security issues that automated and connected vehicles pose.

The FTC and NHTSA invite comments from the public on the topics this workshop will cover. For further information on the workshop and the public comment process, including a list of suggested questions open for comment, please see the workshop’s detailed public notice.

The workshop, which is free and open to the public, will be at the FTC’s Constitution Center, 400 7th St., SW, Washington, DC. It will be webcast live on the FTC’s website. Registration information, an agenda, directions to the FTC’s Constitution Center building, and a list of speakers will be available in the near future on the event webpage. Advance registration is not required but is strongly encouraged.

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.

FTC & NASCO Conference on March 21 Explores Consumer Protection Issues and Charitable Solicitations

The Federal Trade Commission and the National Association of State Charities Officials will host a conference tomorrow in Washington, DC, to examine how we can best protect donors from fraud and deception in this changing landscape.

The event is free and open to the public. It will be available via live webcast and live tweeted via Twitter using the hashtag #GiveandTakeFTC. Public comments will be accepted until May 1, 2017, and may be submitted online. More details can be found on the event’s web page.

WHAT:	Give & Take: Consumers, Contributions, and Charity A Conference Exploring Consumer Protection Issues In Charitable Giving
WHO:	Panels with academics, researchers, marketers, representatives from the sector, donor advocacy groups, and staff from the Federal Trade Commission and Attorney General Offices
WHEN:	Tuesday, March 21, 2017, from 8:30 a.m. to 5:30 p.m., EDT Registration begins at 7:30 a.m. but is not required.
WHERE:	Constitution Center Auditorium 400 7th St., SW Washington, DC

FTC Settlement Bars Spam Email Marketing, Baseless Weight-Loss Claims by Diet-Pill Operation

Three Florida-based affiliate marketers charged with using illegal spam e-mail, false weight-loss claims, and phony celebrity endorsements to market bogus weight-loss products will pay $500,000 to settle Federal Trade Commission charges. The court order resolving the FTC’s allegations also prohibits the defendants from the illegal advertising and marketing tactics alleged in the complaint.

According to the FTC’s June 2016 complaint, Colby Fox; his companies, Tachht, Inc. and Teqqi, LLC; and a fourth defendant paid affiliate marketers to send consumers millions of illegal spam emails from hacked email accounts, making it appear that the messages came from the consumers’ family members, friends, or other contacts. The email messages appeared to be a quick note from a family member or friend, passing along a link to an interesting news story.

The links in those email messages led to websites deceptively promoting the defendants’ unproven weight-loss products, such as Original Pure Forskolin and Original White Kidney Bean. These websites deceptively claimed that the defendants’ products could cause weight loss of 17 pounds in 4 weeks, or “41.7lbs in 2.5 months.”

The websites also falsely represented that the products for sale had been featured or endorsed by Oprah Winfrey or the hosts of the television show “The Doctors.” The FTC alleges that these weight-loss claims were false and unsubstantiated, and that the featured celebrities had no affiliation with the defendants’ products.

These sites then linked to websites where consumers could purchase the defendants’ weight-loss products. The defendants paid their affiliate marketers a commission when consumers clicked through to one of their websites and bought their supplements, the FTC charged. In its complaint, the FTC alleged that these email and marketing practices violated both the FTC Act and the CAN-SPAM Act.

In settling the Commission’s charges, defendants Fox, Tachht, and Teqqi are prohibited from making the false and unproven weight-loss claims alleged in the complaint, and must have competent and reliable scientific evidence to back up any health of efficacy claims they make in the future. They also are barred from falsely representing that any health claims have been approved by the U.S. Food and Drug Administration, and are required to preserve all scientific evidence used to support health claims made for their products.

Next, the settling defendants are prohibited from misrepresenting, or helping anyone else misrepresent, that a product or program has been endorsed or approved by specific celebrities or featured on “The Doctors” television show, that testimonials reflect typical consumer experience with the product, that any website or other publication is an objective news report when it is actually an ad, and that independent tests demonstrate a product’s effectiveness.

The order further prohibits the defendants from making a range of misrepresentations about their products, including their total cost, as well as claims related to refunds or cancellation terms. The order specifies how the defendants must monitor their affiliate marketers in the future, and bars them from violating the CAN-SPAM Act in the way alleged in the complaint.

Finally, the order imposes a judgment of $1,303,822.98 against the defendants, which will be partially suspended upon payment of $500,000 to the Commission. The full amount will become due if they are later found to have misrepresented their financial condition.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Middle District of Florida, Tampa Division, and it was signed by the judge on March 3, 2017. Litigation continues against the fourth defendant, Christopher Reinhold.

NOTE: Stipulated final orders or injunctions, etc. 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.

Membership Reward Service Upromise Penalized for Violating FTC Order

A membership reward service called Upromise, aimed at consumers trying to save for college, will pay a $500,000 civil penalty to settle allegations that it violated the terms of a Federal Trade Commission order requiring the company to make disclosures about its data collection and use and to obtain third-party assessments of its data collection toolbar.

“Upromise once again didn’t disclose to consumers the extent of its data collection, and failed to comply with the FTC’s order to get required privacy assessments,” said Tom Pahl, Acting Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Companies must keep their privacy promises.”

Following the 2012 order, Upromise encouraged consumers to download a toolbar called “RewardU.” The FTC’s order required Upromise to make clear and prominent disclosures about RewardU’s data collection and use, and to obtain third-party assessments and certifications of the toolbar describing specific safeguards and their effectiveness in protecting consumers’ personal information. In a civil penalty complaint filed on the FTC’s behalf by the Department of Justice, the Commission alleged that Upromise failed to comply with both provisions of the order.

Under a stipulated order announced today, Upromise must not violate the 2012 order and must pay a $500,000 civil penalty. Before launching a future toolbar, it must have a third-party professional specializing in website design and user experience certify that Upromise has adhered to the order’s disclosure and “express, affirmative” consumer consent requirements. Upromise also must obtain advance written approval from the FTC of any required assessment’s scope and design. In addition, it must permanently expire RewardU-related cookies from consumers’ computers and notify those consumers how to uninstall the toolbar and any associated cookies.

The Commission vote authorizing the staff to refer the complaint to the DOJ and to approve the proposed stipulated order was 3-0. The DOJ filed the complaint and proposed stipulated order on behalf of the Commission in U.S. District Court for the District of Massachusetts.

NOTE: The Commission authorizes the filing of 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 orders have the force of law when approved and signed by the District Court judge.

FTC Staff Issues Comment on Occupational Licensing Reforms in Nebraska

Federal Trade Commission staff submitted a comment to the Nebraska Senate on proposed legislation that would reduce or eliminate licensure requirements for certain occupations in Nebraska.

This is the first staff comment issued since the formation of the FTC’s new Economic Liberty Task Force, launched recently by Acting Chairman Maureen K. Ohlhausen. The Task Force focuses on the harms of excessive occupational licensing, its impact on individuals and society, and reforms that would promote greater economic opportunity for all Americans, consistent with legitimate consumer protection goals.

Staff of the FTC’s Office of Policy Planning and its Bureaus of Competition and Economics submitted the comment in response to requests from Nebraska State Senators Suzanne Geist, Tyson Larson, Brett Lindstrom and John Lowe on the likely competitive impact of four bills that would reduce or eliminate certain occupational licensing requirements. Recognizing that these bills are part of a larger occupational licensing reform initiative in Nebraska, the staff comment explains the competitive benefits of loosening unnecessary licensing requirements, and suggests a general framework for evaluating proposed changes to Nebraska’s licensing laws.

“Today’s staff’s submission provides a competition agency perspective that we hope is helpful to Nebraska’s state leaders, as they work to reform Nebraska occupational licensing regulations that may be overbroad or unnecessary to meet a legitimate public health or safety need,” said Acting Chairman Ohlhausen. “By reforming and limiting unnecessary licensing requirements, states can open doors to opportunity, enhance competition and innovation, and allow more consumer choice.”

All occupational licensing restrains competition to some extent because it limits the number of people who can provide certain services, the comment states. In this way, licensure can cause prices to increase, as well as stifle entrepreneurship and innovation. While there may be legitimate consumer protection reasons for some licensing requirements, these benefits may not yield higher service quality or justify the potentially significant costs associated with licensing.

For these reasons, the comment “commends Governor [Pete] Ricketts and Nebraska’s legislators for examining state occupational laws to determine whether such laws, on balance, help or harm Nebraska citizens.” It further urges legislators and regulators to consider removing excessive, unnecessary licensing requirements wherever possible.

The Commission vote to issue the staff comment was 2-0. It was sent to State Senators Geist, Larson, Lindstrom and Lowe on March 15, 2017. (FTC File No. V170005; the staff contact is Katie Ambrogi, Office of Policy Planning, 202-326-2205).

FTC Launches New Website Dedicated to Economic Liberty

New web pages launched today on the Federal Trade Commission’s website will highlight the work of the agency’s new Economic Liberty Task Force, which Acting Chairman Maureen K. Ohlhausen announced as her first major policy initiative for the agency.

The task force addresses regulatory hurdles to job growth, including the proliferation of occupational licensing. Nearly 30 percent of American jobs require a license today, up from less than five percent in the 1950s. For some professions, occupational licensing is necessary to protect the public against legitimate health and safety concerns. But in many situations, the expansion of occupational licensing threatens economic liberty. Unnecessary or overbroad restrictions erect significant barriers and impose costs that harm American workers, employers, consumers, and our economy as a whole, with no measurable benefits to consumers or society.

“This is an important moment for economic liberty. Governors, state legislators, and many other stakeholders want to move forward to remove or narrow occupational licensing regulations and open doors to opportunity, enhancing competition and innovation,” said Acting Chairman Ohlhausen. “The FTC’s Economic Liberty Task Force has moved quickly to create a website that will gather many existing resources, from the FTC and elsewhere, into a central repository for stakeholders. It will be a dynamic resource and will grow to incorporate additional work by the task force and others in this important area.”

The FTC has a long history of advocacy to reduce or eliminate unnecessary occupational licensing requirements imposed by state law or rules, and the website showcases that work. Upon request by a state legislator or in response to an open public comment period, FTC staff regularly shares its expertise on licensure issues affecting health care workers, other professionals such as attorneys and interior designers, and workers in occupations such as online auction trading and real estate closing services.

The website also presents selected examples of state-based initiatives, telling the stories of state elected leaders and other officials who share the agency’s goal of occupational licensing reform. The website features FTC testimony before Congress on occupational licensure, as well as blogs on the topic, and selected speeches and articles by FTC officials and staff.

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. The Economic Liberty web pages are at www.ftc.gov/econliberty.

FTC Returns Money to Victims of Debt Relief Scheme

The Federal Trade Commission is mailing 561 checks totaling more than $148,000 to people who lost money to Payday Support Center, a debt relief scheme that targeted people with outstanding payday loans. The defendants are banned from promoting or selling debt relief services under a federal court order.

People who lost money will get back an average of $264. 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 888-279-4212.

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

FTC Signs Memorandum of Understanding with Royal Canadian Mounted Police to Strengthen Enforcement Cooperation

The Federal Trade Commission has signed a memorandum of understanding (MOU) with the Royal Canadian Mounted Police (RCMP) to strengthen enforcement cooperation on cross-border fraud matters.

The MOU, signed by Acting FTC Chairman Maureen K. Ohlhausen, will enhance efforts by the FTC and RCMP to share information and engage in joint investigations. The FTC and the RCMP already cooperate on such issues as telemarketing fraud and providing redress for victims of cross-border frauds.

“This MOU will strengthen our efforts to combat cross-border fraud and protect both U.S. and Canadian consumers,” FTC Acting Chairman Ohlhausen said. “This will expand our areas of cooperation and our ability to share information and conduct joint investigations.”

The RCMP plays a key role in Canadian law enforcement, acting as Canada’s national police force at the federal level while also providing policing services to eight of Canada’s provinces. The RCMP participates with the FTC in five Canada/U.S. regional partnerships focused on combatting cross-border marketing fraud, together with numerous other U.S. and Canadian enforcement agencies.

The MOU recognizes the long-standing partnership between the two agencies, which have worked together on joint cases, shared consumer complaints, and provided assistance with foreign asset recovery. This includes a 2016 case that netted $1.87 million in relief for victims of a debt relief scam and a case from 2015 involving cross-border telemarketing fraud that targeted seniors. The MOU will expand cooperation between the two agencies in enforcing each country’s respective consumer protection laws.

The Commission vote authorizing Acting Chairman Ohlhausen to sign the MOU on behalf of the agency was 3-0.

The Federal Trade Commission works with foreign governments to promote international cooperation and sound policy. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases and the FTC International Monthly for the latest FTC news and resources.

Los Angeles-Based Sage Auto Group Will Pay $3.6 Million to Settle FTC Charges

Sage Automotive Group – nine Los Angeles-based auto dealerships, their holding and management companies, and two individuals – has agreed to pay more than $3.6 million for return to consumers in order to settle Federal Trade Commission charges that it used deceptive and unfair sales and financing practices, deceptive advertising, and deceptive online reviews.

The proposed settlement order, which will be filed in the U.S. District Court for the Central District of California for approval, will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing, and endorsements or testimonials.

The proposed order will also bar the defendants from engaging in other unlawful conduct when a sale is cancelled, such as failing to return any down payment or trade-in or seeking legal action, arrest, repossession or debt collection unless the action is lawful and the defendants intend to take such action. It also prohibits them from violating the Truth In Lending Act and Regulation Z, and the Consumer Leasing Act and Regulation M.

The corporate defendants are Universal City Nissan, Inc., also d/b/a Universal Nissan; Sage Downtown, Inc., also d/b/a Kia of Downtown Los Angeles; Glendale Nissan/Infiniti, Inc., also d/b/a Glendale Infiniti and Glendale Nissan; Valencia Holding Co., LLC, also d/b/a Mercedes-Benz of Valencia; West Covina Auto Group, LLC, also d/b/a West Covina Toyota and West Covina Toyota/Scion; West Covina Nissan, LLC; Covina MJL, LLC, also d/b/a Sage Covina Chevrolet; Sage North Hollywood, LLC, also d/b/a Sage Pre-Owned; Sage Vermont, LLC, also d/b/a Sage Hyundai; Sage Holding Company Inc. and Sage Management Company Inc.

The individual defendants are Joseph Schrage and Michael Schrage.

The Commission vote approving the stipulated final order was 2-1, with Acting Chairman Maureen K. Ohlhausen dissenting.

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

To learn more, read Are Car Ads Taking You For a Ride?, Buying A New Car, and Buying A Used Car.

FTC Halts Invention Promotion Scheme Charged With Bilking Millions of Dollars from Consumers

The Federal Trade Commission has charged the operators of an invention-promotion scam, World Patent Marketing, with deceiving consumers and suppressing complaints about the company by using threats of criminal prosecution against dissatisfied customers.

At the FTC’s request, a federal court temporarily halted the Florida-based scheme and froze its assets pending litigation. The agency seeks to permanently stop the defendants’ practices and return money to consumers.

“This case is about protecting innovators, the engine of a thriving economy,” Acting FTC Chairman Maureen K. Ohlhausen said. “The defendants promised to promote people’s inventions and took thousands of dollars, but provided almost no service in return. Then they added insult to injury by threatening people who complained.”

According to the FTC, consumers paid Scott Cooper and his companies, World Patent Marketing Inc. and Desa Industries Inc., thousands of dollars to patent and market their inventions based on bogus “success stories” and testimonials promoted by the defendants. But after they strung consumers along for months or even years, the defendants did not deliver what they promised. Instead, many customers ended up in debt or lost their life savings with nothing to show for it.

The FTC also alleges that the defendants used various unfair tactics, including threats of legal action, to discourage consumers from publishing truthful or non-defamatory negative reviews about the defendants and their services. For example, one customer who sought a refund and filed a complaint with the Better Business Bureau received a letter from the defendants’ lawyer. The letter stated that seeking a refund was extortion under Florida law and, “since you used email to make your threats, you would be subject to a federal extortion charge, which carries a term of imprisonment of up to two years and potential criminal fines.”

The FTC thanks the United States Patent and Trademark Office, the Better Business Bureau of New York, and the Better Business Bureau serving Southeast Florida and the Caribbean for their assistance in this matter.

The Commission vote approving the complaint was 2-0. The U.S. District Court for the Southern District of Florida entered a temporary restraining order against the defendants on March 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 case will be decided by the court.

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