The FTC stayed busy during the beginning of August. The agency announced a host of proposed settlements with companies and individuals engaged in deceptive and fraudulent business schemes. All this and more after the jump:
Monday, August 5, 2024
Bureau of Consumer Protection: Credit and Finance, Loans
- The FTC announced a proposed settlement with the many members of a credit repair service operation known as Financial Education Services (FES), which the agency described as a credit repair pyramid scheme. The proposed settlement includes permanent prohibitions from offering credit repair services or engaging in multi-level marketing, requirements to implement compliance monitoring, and a requirement to turn over more than $12 million in assets. The FTC will use the $12 million to provide refunds to consumers. The FTC originally filed suit against FES in May, 2022, alleging the company's business practices deceived consumers about credit repair services and income opportunities with the companies. The commission voted 5-0 to approve the proposed settlement and filed the order with the U.S. District Court for the Eastern District of Michigan.
Tuesday, August 6, 2024
Bureau of Consumer Protection: Advertising and Marketing
- The FTC announced it will provide $1.9 million in refunds to consumers harmed by Hey Dude, Inc.'s improper refund, shipping, and review practices. In September 2023, the company settled allegations that it violated the Mail, Internet, and Telephone Order Merchandise Rule and suppressed negative online reviews in violation of the FTC Act. Hey Dude, Inc. failed to notify customers about shipping delays and did not provide refunds for cancellations or unreceived orders. Further, Hey Dude, Inc. allegedly only published high-rating reviews to its website via a third-party online review management interface, which suppressed more than 80% of online reviews. The FTC will use the $1.9 million to provide payments to over 35,000 consumers affected by Hey Dude, Inc.'s actions.
Wednesday, August 7, 2024
Commissioners: Consumer Fraud; Solar Energy
- Lina Khan, the FTC Chair, gave public remarks regarding deceptive trade practices related to solar energy. Chair Khan warned of predatory financial tactics particularly in new market areas responding to economic trends, such as in the solar energy industry. Chair Khan specifically noted that from January 2022 to June 2024 consumers have reported losing over $250 million in solar-related complaints and that the FTC has received over 120,000 complaints about robocalls and other sales calls related to solar energy in 2024. Chair Khan indicated that the FTC will maintain focus on predatory tactics in the solar energy industry. In 2022, the FTC sued Ygrene leading to a $3 million settlement. In 2023, the FTC sued Solar Xchange leading to an order shutting down all unlawful telemarketing from the company. Chair Khan gave the remarks alongside Deputy Secretary Wally Adeyemo of the U.S. Department of the Treasury and Director Rohit Chopra of the Consumer Financial Protection Bureau.
Thursday, August 8, 2024
Bureau of Consumer Protection: Investment; Franchises
- The FTC announced a settlement with two defendants in a larger action regarding the Blueprint to Wealth business scheme, which allegedly falsely promised consumers business growth value through turnkey online business utilities. The scheme cost individual consumers between $3,000 and $21,000, but allegedly offered minimal to no value. Defendants Robert William Shafer and Samuel J. Smith have agreed to settlements with the FTC that include permanent bans from telemarketing and robocalling, permanent bans against future roles in any money-making or investment opportunity businesses, and a monetary judgment totaling approximately $7.5 million, suspended in part based on inability to pay. The Commission voted 5-0 to approve the stipulated settlement order. The case against the other defendants, participants in the Blueprint to Wealth scheme, is ongoing.
Bureau of Consumer Protection: Lottery & Sweepstakes, Advertising & Marketing
- The FTC announced a settlement with one defendant in a larger action against the operators of an alleged sweepstakes scam. The FTC originally filed its complaint against Victor Ramirez in 2015 for his alleged involvement in a sweepstakes operation that had taken over $28 million from consumers across more than seven countries. The FTC's complaint charged four individual defendants and eleven corporate defendants for mailing fake letters claiming consumers had won large cash prizes. Consumers were falsely directed to mail an immediate payment to collect the winnings. Mr. Ramirez will be permanently banned from involvement in any sweepstakes or prize promotions. The Commission voted 5-0 to approve the stipulated settlement order. The case against the other defendants is ongoing.
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