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Wyndham Settles FTC Charges It Unfairly Placed Consumers’ Payment Card Information At Risk

Note: A conference call for media with Jessica Rich, Director of the FTC Bureau of Consumer Protection, was held as follows.

Date: Dec. 9, 2015
Time: 12:00 p.m. ET
Rich and FTC staff took questions from the media about the case.

Wyndham Hotels and Resorts has agreed to settle FTC charges that the company’s security practices unfairly exposed the payment card information of hundreds of thousands of consumers to hackers in three separate data breaches.

Under the terms of the settlement, the company will establish a comprehensive information security program designed to protect cardholder data – including payment card numbers, names and expiration dates. In addition, the company is required to conduct annual information security audits and maintain safeguards in connections to its franchisees’ servers.

“This settlement marks the end of a significant case in the FTC’s efforts to protect consumers from the harm caused by unreasonable data security,” said FTC Chairwoman Edith Ramirez. “Not only will it provide important protection to consumers, but the court rulings in the case have affirmed the vital role the FTC plays in this important area.”

The proposed stipulated federal court order requires Wyndham Hotels and Resorts to obtain annual security audits of its information security program that conform to the Payment Card Industry Data Security Standard for certification of a company’s security program. In addition, the order requires Wyndham’s audit to:

certify the “untrusted” status of franchisee networks, to prevent future hackers from using the same method used in the company’s prior breaches;
certify the extent of compliance with a formal risk assessment process that will analyze the possible data security risks faced by the company; and
certify that the auditor is qualified, independent and free from conflicts of interest.

The order also requires that in the event Wyndham suffers another data breach affecting more than 10,000 payment card numbers, they must obtain an assessment of the breach and provide that assessment to the FTC within 10 days.

The order provides that if Wyndham successfully obtains the necessary compliance certifications, it will be deemed in compliance with the comprehensive information security program provision of the order. That provision is not effective, however, in the event that Wyndham in any way misleads or provides false information during the annual audit and assessment process.

Wyndham’s obligations under the settlement are in place for 20 years.

The Commission vote approving the proposed stipulated order was 4-0. The FTC filed the proposed stipulated order in the U.S. District Court for the District of New Jersey.

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

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC and Pennsylvania Office of Attorney General Challenge Penn State Hershey Medical Center’s Proposed Merger with PinnacleHealth System

The Federal Trade Commission has authorized an action to block Penn State Hershey Medical Center’s (Hershey) proposed merger with PinnacleHealth System, alleging that the combination of the two health care providers would substantially reduce competition in the area surrounding Harrisburg, Pennsylvania, and lead to reduced quality and higher health care costs for the area’s employers and residents.

The FTC, jointly with the Pennsylvania Office of the Attorney General, will file a complaint in federal district court on Wednesday seeking a preliminary injunction to stop the deal pending an administrative trial.

According to Debbie Feinstein, Director of the FTC’s Bureau of Competition, “The proposed merger would eliminate the significant competition between these hospitals, resulting in higher prices and diminished quality.”

The merger would create a dominant provider of general acute care inpatient hospital services sold to commercial health plans in the area of south-central Pennsylvania consisting of Dauphin, Cumberland, Perry, and Lebanon counties. According to the administrative complaint, (a public version of which will be available and linked to this news release as soon as possible) the merged entity would control approximately 64 percent of this market, likely leading to increased healthcare costs and reduced quality of care for more than 500,000 local residents and patients.

The Commission has also authorized staff to seek a temporary restraining order and a preliminary injunction in federal court to prevent the parties from consummating the merger, and to maintain the status quo pending the administrative proceeding. The Pennsylvania Office of Attorney General will join the FTC in the federal court complaint.

Hershey is a 551 bed, not-for-profit health care system in Dauphin County. Hershey also owns and operates the Penn State Hershey Cancer Institute and the Penn State Hershey Children’s Hospital. Hershey’s total revenues in FY2014 were $1.39 billion.

Pinnacle is a not-for-profit three hospital system in Dauphin County. Pinnacle operates three acute care hospitals, Harrisburg Hospital, Community General Osteopathic and West Shore Hospital with a combined total 610 beds. Pinnacle had total revenues in fiscal year 2015 of $1.07 billion.

The Commission votes to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction in federal court were both 4-0. The federal district court complaint will be filed Wednesday in the U.S. District Court for the Middle District of Pennsylvania. The administrative trial is scheduled to begin on May 17, 2016.

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 issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Challenges Proposed Merger of Staples, Inc. and Office Depot, Inc.

The Federal Trade Commission today filed an administrative complaint charging that Staples, Inc.’s proposed $6.3 billion acquisition of Office Depot, Inc. would violate the antitrust laws by significantly reducing competition nationwide in the market for “consumable” office supplies sold to large business customers for their own use.

Framingham, Mass.-based Staples – the world’s largest seller of office products and services – and Boca Raton, Fla.-based Office Depot are each other’s closest competitors in the sale of consumable office supplies to large business customers, according to the complaint.

“The Commission has reason to believe that the proposed merger between Staples and Office Depot is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies,” said FTC Chairwoman Edith Ramirez. “The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customers.”

According to the complaint, many large business customers buy consumable office supplies for their own use under a contract. In addition to a wide range of office supplies at competitive prices, the vendor provides them with fast and reliable nationwide delivery, dedicated customer service, customized online catalogs, integration of procurement systems, and detailed utilization reports. That business-to-business market is distinct from the more competitive retail markets for office supplies sold to consumers.

Consumable office supplies include items such as pens, pencils, notepads, sticky notes, file folders, paper clips, and paper used for printers and copy machines.

The complaint alleges that, in competing for contracts, both Staples and Office Depot can provide the low prices, nationwide distribution and combination of services and features that many large business customers require. The complaint further alleges that, by eliminating the competition between Staples and Office Depot, the transaction would lead to higher prices and reduced quality. The complaint also asserts that entry or expansion into the market – by other office supplies vendors, manufacturers, wholesalers, or online retailers – would not be timely, likely, or sufficient to counteract the anticompetitive effects of the merger. Finally, the complaint asserts that purported efficiencies would not offset the likely competitive harm.

The FTC has authorized staff to seek in federal court a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger and to maintain the status quo pending the administrative proceeding.

Throughout the investigation, Commission staff cooperated with staff of the antitrust agencies in Australia, Canada, and the European Union. The Canadian Competition Bureau also filed an application to block the transaction with Canada’s Competition Tribunal earlier today. The FTC acknowledges the exemplary work done by all agencies.

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 issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive mergers and business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular mergers or business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Returns Money to Consumers Conned into Paying for Business Directory Listings

The Federal Trade Commission is mailing 774 checks totaling more than $444,000 to consumers who lost money to a business directory scam.

In 2013, the FTC charged the Online Public Yellow Pages defendants, based in Montreal, with billing small businesses and churches in the United States for unwanted directory listings. The court temporarily halted the scheme and froze their assets, and in 2014, the court entered a default judgment that ended the operation.

Affected consumers will receive checks representing the full amount they paid; the average amount is $574.66. Consumers should deposit or cash the checks within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed.

Consumers who receive checks and have questions can contact the FTC’s refund administrator, Analytics, at 844-828-4439. Learn more about the FTC’s refund program.

Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Revised Compliance Examination Manual

FIL-59-2015
December 4, 2015

Revised Compliance Examination Manual

Summary:

The FDIC has revised the Compliance Examination Manual (manual) to reflect recent supervisory guidance. The manual provides guidance to FDIC examination staff for evaluating financial institutions for compliance with the federal consumer protection laws and regulations. The manual, which is available on the FDIC’s website, may help staff at institutions who are seeking to better understand the FDIC’s consumer compliance examination process.

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

Highlights:

The FDIC’s Division of Depositor and Consumer Protection (DCP) announces the release of a revised version of the FDIC’s Compliance Examination Manual (manual).

The manual provides supervisory guidance to examination staff for conducting compliance and Community Reinvestment Act (CRA) examinations and other supervisory activities. It includes supervisory policies and interagency examination procedures regarding compliance with federal consumer protection laws and regulations.

The revised manual includes:

Updated templates providing examples of a consumer compliance Report of Examination and a CRA Performance Evaluation for a hypothetical, FDIC-supervised bank (the Bank of Anytown);
New guidance about the Matters Requiring Board Attention (MRBA), a section of the Report of Examination that directs banks to important information about weaknesses in a compliance management system, depending on the facts and circumstances at a particular bank;
Guidance on evaluating the impact of consumer harm on examination and supervisory activities;
A new “Assessment of Risk of Consumer Harm” (ARCH), which provides pre-examination planning and scoping guidance to FDIC examination staff; and
Additional enhancements, such as bookmarks to improve navigation, hyperlinks to many external references, and downloadable chapters.

The manual is available to the public on the FDIC’s website at https://www.fdic.gov/regulations/compliance/manual/index.html.

Continuation of FIL-59-2015

Financial Institution Letters
FIL-59-2015
December 4, 2015

Revised FDIC Compliance Examination Manual

The FDIC Compliance Examination Manual (manual) provides supervisory guidance to compliance examination staff for conducting consumer compliance and Community Reinvestment Act (CRA) examinations and other supervisory activities. The manual supports efforts to ensure compliance with the federal consumer protection laws and regulations. It also promotes effective and consistent supervision of financial institutions. The revised manual includes updated information on the FDIC’s risk-focused consumer compliance supervision program, including:

Revised Report of Examination Templates. These templates provide examples of FDIC consumer compliance Report of Examination (ROE) for a hypothetical bank (the Bank of Anytown). The ROE communicates the results of an examination to an institution and serves as the compliance examination’s principal document of record. The revised templates provide additional guidance on the format and content of the ROE. The templates also include a sample CRA Performance Evaluation, which is used to document an assessment of an institution’s record of helping to meet the credit needs of its communities, consistent with safe and sound practices. The CRA example is for a bank evaluated under the Intermediate Small Bank test.
New Guidance on Matters Requiring Board Attention. At the conclusion of the FDIC’s risk-focused supervisory process, including compliance examinations or visitations, compliance examination staff communicate findings to each institution describing the strengths and weaknesses of its compliance management system (CMS). The findings also assess adherence to the consumer protection laws and regulations, and potential consumer harm. Typically, such findings are conveyed in the ROE at the conclusion of a consumer compliance examination. If significant issues are identified requiring an institution’s Board of Directors or senior management to take prompt corrective action, these issues are documented as “Matters Requiring Board Attention” (MRBA). MRBAs are intended to clearly convey to an institution’s Board or senior management the issues of the highest degree of supervisory concern. MRBAs could include: violations of consumer protection laws; activities that result in consumer harm; CMS weaknesses that, if left unaddressed, could adversely impact the institution; and/or emerging issues requiring proactive institution attention to mitigate risks.
Guidance on Evaluating the Impact of Consumer Harm. Examination activities promote compliance with federal consumer protection laws, fair lending statutes, and the regulations that implement these laws and statutes. Effective supervision focuses on the areas requiring elevated supervisory attention and promotes the efficient use of resources. The guidance contained in this section of the manual assists in understanding the impact of consumer harm on examination and supervisory activities.
The “Assessment of Risk of Consumer Harm”(ARCH). During consumer compliance examinations, all applicable federal consumer protection laws and regulations are considered in the risk-scoping process. The ARCH will be initiated during the pre-examination process and the focus will be on scoping the examination to identify, address, and mitigate the risk of consumer harm. A series of questions guides examiners through the analysis of documenting inherent risk, mitigating factors, and the residual risk of potential consumer harm. Based on this evaluation, examiners determine specific areas of focus for a bank’s examination activities.
TILA-RESPA Integrated Disclosure Rule. Revised interagency examination procedures pertaining to the Truth in Lending Act (TILA)-Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure Rule are included in the manual.¹

The latest version of the manual is currently available on the FDIC’s website at https://www.fdic.gov/regulations/compliance/manual/index.html. Users can download the entire manual in a single PDF file or download individual PDF files of each chapter of the manual as well as Microsoft Word files of certain document templates.

Finally, enhancements were made to improve interfacing with the manual. The manual’s homepage contains bookmarks making it easier to find information and to navigate to a particular section. Moreover, the manual contains several links to sources where appropriate, allowing for easier access to external references.

Proposed Revisions to the Consolidated Reports of Condition and Income and Banker Teleconference Scheduled for December 8

FIL-58-2015
December 4, 2015

Proposed Revisions to the Consolidated Reports of Condition and Income and Banker Teleconference Scheduled for December 8

Summary:

Revisions to the Consolidated Reports of Condition and Income (Call Report) that had been proposed to take effect December 31, 2015, have been deferred until no earlier than March 31, 2016. In addition, on December 8, 2015, the federal banking agencies will hold a teleconference on the reporting of regulatory capital data in the Call Report.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions.

Highlights:

On September 18, 2015, the FDIC and the other federal banking agencies requested comment on proposed revisions to the Call Report. The changes were proposed to take effect December 31, 2015, or March 31, 2016, depending on the nature of the change. The comment period for the proposal ended November 17, 2015.
For those Call Report revisions with a proposed effective date of December 31, 2015, the Federal Financial Institutions Examination Council (FFIEC) and the agencies have decided to defer their effective date until no earlier than March 31, 2016, based on feedback on the proposal and other factors.
Institutions will be advised of the FFIEC’s and the agencies’ decisions regarding the proposed Call Report revisions, including their effective dates.
The federal banking agencies are conducting a banker teleconference on Tuesday, December 8, 2015, from 2:00 to 3:30 p.m., Eastern Standard Time, to provide additional guidance on, and respond to questions about, the reporting of regulatory capital data in Schedule RC-R of the Call Report.
Management and staff of institutions that file the Call Report and other persons interested in participating in the banker teleconference should dial toll-free 877-917-1556 and enter passcode 6473309#. Participants are asked to join the teleconference 15 minutes before it begins. Presentation materials for the teleconference will be available on the FFIEC’s website (https://www.ffiec.gov/ffiec_report_forms.htm) by the morning of the teleconference.

Federal Trade Commission Appoints Lorrie Cranor as Chief Technologist

Federal Trade Commission Chairwoman Edith Ramirez has appointed Lorrie Faith Cranor as the agency’s Chief Technologist, succeeding Ashkan Soltani.

Cranor will join the FTC staff in January and be primarily responsible for advising Chairwoman Ramirez and the Commission on developing technology and policy matters. Cranor is currently a Professor of Computer Science and Engineering and Public Policy at Carnegie Mellon University, where she directs the CyLab Usable Privacy and Security Laboratory. She was previously a researcher at AT&T Labs Research and has also taught at the Stern School of Business at New York University.

“Technology is playing an ever more important role in consumers’ lives, whether through mobile devices, personal fitness trackers, or the increasing array of Internet-connected devices we find in homes and elsewhere,” said FTC Chairwoman Edith Ramirez. “We are delighted to welcome Lorrie to our team, where she will play a key role in helping guide the many areas of FTC work involving new technologies and platforms.

“I would also like to thank Ashkan Soltani for his leadership and many contributions to the FTC’s efforts to protect consumers and promote competition in today’s high-tech world,” Chairwoman Ramirez added. “In addition to his role in the agency’s enforcement and policy work, Ashkan has also been instrumental in attracting new tech talent to the agency.”

Cranor has authored over 150 research papers on online privacy and usable security, and has played a central role in establishing the usable privacy and security research community, including her founding of the Symposium on Usable Privacy and Security. She is also a co-director of Carnegie Mellon’s Privacy Engineering masters’ program.

Cranor holds a doctorate in Engineering and Policy, masters’ degrees in Computer Science, and Technology and Human Affairs, and a bachelor’s degree in Engineering and Public Policy, from Washington University in St. Louis, Missouri.

FTC Halts Online ‘Yellow Pages’ Scammers

At the Federal Trade Commission’s request, a federal court has banned the Montreal, Quebec, area-based operators of a business directory scam from the directory business and ordered them to pay the Commission more than $1.2 million to use for reimbursing victims of the scam.

The order resolves FTC charges filed in March 2015, that the defendants, Ivan Chernev, German Lebedev, and their companies, billed small businesses and nonprofits in the United States for unwanted listings in online “yellow pages” business directories. The court halted the operation and froze the defendants’ assets pending litigation. The defendants did not respond to the FTC’s allegations and the court has entered a default judgment and order against them.

Using a variety of business names, the defendants sent medical practices, churches, and retirement homes unsolicited invoices with the familiar “walking fingers” image, seeking $480.95 or a similar amount for a one-year directory listing. When consumers ignored the invoices, the defendants sent collection warnings demanding payment of more than $2,000. When consumers still refused to pay, the defendants sent dunning notices, posing as a third-party debt collector.

The court order prohibits the defendants from misrepresenting material facts about any product or service, profiting from customers’ personal information and failing to dispose of it properly, and trying to collect payments for any business directory listings. The $1.2 million judgment imposed by the order must be paid within seven days.

The defendants are American Yellow Browser Inc.; American Yellow Group Inc.; Distribution H.E.P. Inc., also doing business as American Yellow Distribution and Medical Yellow Directories Inc.; Official Yellow Guide Inc.; Publication A.A.P. Inc., also d/b/a All American Pages and Official Yellow Guide; Publication A.Y.B. Inc., also d/b/a American Yellow Browser Inc., American Yellow Group Inc., and All American Pages Inc.; Publications A.Y.D. Inc.; Ivan Chernev, also d/b/a American Yellow Corporation Inc., General Credit Protection Inc., and Credit Bureau Recovery; and German Lebedev, also d/b/a American Yellow Directories Inc.

The U.S. District Court for the Northern District of Illinois, Eastern Division, entered a default judgment and order against the defendants on November 20, 2015.

The FTC would like to thank the United States Postal Inspection Service, United States Immigration and Customs Enforcement – Homeland Security Investigations, the Canadian Anti-Fraud Centre, Wisconsin Department of Agriculture, Trade and Consumer Protection and the Attorneys General of Illinois and North Dakota for their assistance.

The FTC also would like to acknowledge the Royal Canadian Mounted Police and Centre of Operations Linked to Telemarketing Fraud (Project COLT) for their invaluable assistance. Launched in 1998, Project COLT combats telemarketing and mass marketing crime and includes members of the Royal Canadian Mounted Police, Sureté du Québec, Service de Police de la Ville de Montréal, Canada Border Services Agency, Competition Bureau of Canada, Canada Post, U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement and the U.S. Secret Service), the U.S. Postal Inspection Service, the Federal Trade Commission, and the Federal Bureau of Investigation. Since its inception, Project COLT has recovered over $26 million for victims of mass marketing fraud.

To learn more, read Small Business Scams.

Tommie Copper to Pay $1.35 Million to Settle FTC Deceptive Advertising Charges

Athletic apparel company Tommie Copper, Inc. and its founder have agreed to pay $1.35 million to settle Federal Trade Commission charges that they deceptively advertised the company’s copper-infused compression clothing would relieve severe and chronic pain and inflammation caused by arthritis and other diseases.

Tommie Copper’s proposed settlement with the FTC also requires the company and its founder and chairman Thomas Kallish to have competent and reliable scientific evidence before making future claims about pain relief, disease treatment, or health benefits.

Sample Tommie Copper advertisement for copper-infused compression clothing.

“It’s tempting to believe that wearing certain clothing will eliminate severe pain, but Tommie Copper didn’t have science to back its claims,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If you see an ad for a product that promises to replace the need for drugs or surgery, talk to a healthcare professional before you spend your money.”

According to the FTC’s complaint, since April 2011, Tommie Copper, based in Mt. Kisco, New York, and Kallish have advertised Tommie Copper copper-infused compression garments in infomercials, brochures, social media, and print media such as Arthritis Today magazine. The garments, including sleeves, braces, shirts and socks, range in price from $29.95 to $69.50.

The company’s infomercials featured talk show host Montel Williams declaring, “Tommie Copper truly is pain relief without a pill.” Company ads featured celebrity and consumer testimonials claiming that Tommie Copper garments alleviated pain caused by multiple sclerosis, arthritis, and fibromyalgia; and could provide pain relief comparable to, or better than, drugs or surgery. The FTC alleges that the defendants’ claims were false or unsubstantiated.

The proposed stipulated federal court order imposes an $86.8 million judgment against the defendants, which will be partially suspended upon payment of $1.35 million by the defendants. If the defendants are found to have misrepresented their financial condition, the total amount will immediately come due.

The Commission vote authorizing the staff to file the complaint and approving the proposed stipulated federal court order was 4-0. The FTC filed the complaint and proposed order in the U.S. District Court for the Southern District of New York.

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 orders have the force of law when signed and entered by the District Court judge.

FTC Halts Bogus Envelope-Stuffing Scam

At the Federal Trade Commission’s request, a federal court has halted a nationwide work-at-home scam that took more than $7 million from tens of thousands of consumers. The defendants allegedly lured consumers with false claims that they could earn up to $5,000 or more in weekly income by stuffing and mailing “special advertising letters” from home.

According to the FTC’s complaint, David S. Brookman and his companies mailed unsolicited flyers, claiming:

GET PAID FOR MAILING OUR SPECIAL LETTERS FROM HOME!
POTENTIAL EARNINGS OF UP TO $5000 OR MORE WEEKLY!
FREE POSTAGE, FREE CIRCULARS, FREE ENVELOPES.
Pay Checks Mailed Every Tuesday.
Don’t Get Left Out! Give us a try & receive a check in as little as ten days!

According to papers filed with the court, only 10 percent of consumers received any payment at all, and their total average earnings was $19.50, far less than the $99 to $399 they had to pay up-front to participate.

According to the FTC’s complaint, the “special advertising letters” consumers were being asked to stuff and mail turned out to be nothing more than solicitation flyers for a second bogus work-at-home program. Consumers who joined the second program were asked to pay an up-front fee, typically $99, purportedly to assemble and mail the defendants’ “Get Credit Now” booklets from home and receive $20 per booklet mailed. In fact, consumers in the booklet program were not paid for fulfilling orders and were expected to market the booklets and generate orders to make any money.

Brookman and his companies are charged with violating the FTC Act and the FTC’s Business Opportunity Rule, which requires business opportunity sellers to provide specific information to help consumers evaluate a business opportunity, and prohibits sellers from making earnings claims without substantiation. The FTC seeks to permanently shut down the operation, which has used different business names to avoid negative publicity.

The defendants are Brookman and his companies, 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 authorizing staff to file the complaint for permanent injunction was 4-0. On October 26, 2015, the United States District Court for the Southern District of New York entered a temporary restraining order halting the defendants’ deceptive scheme and freezing their assets. On October 30, 2015, the court entered a stipulated preliminary injunction order continuing the ban on the defendants’ activities and the asset freeze pending litigation.

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.

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Revised Compliance Examination Manual

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Revised FDIC Compliance Examination Manual

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Proposed Revisions to the Consolidated Reports of Condition and Income and Banker Teleconference Scheduled for December 8

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