News from the Federal Trade Commission - September 2013

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Penn Corner

Candid Camera

IP camera

The FTC has settled its charges against TRENDnet, a company that markets video cameras for remote home monitoring. According to the FTC, TRENDnet marketed its SecurView cameras as secure for home security and baby monitoring, but the cameras had faulty software that left them open to online viewing. A hacker exploited this flaw, and eventually others posted links to the live feeds of nearly 700 cameras that displayed babies asleep in their cribs, young children playing, and adults going about their daily lives. This is the agency’s first action against a marketer of an everyday product with online interconnectivity – commonly referred to as the "Internet of Things."

Jesta Minute

phony virus scans

Global mobile marketer Jesta Digital, LLC, must provide refunds to consumers and pay an additional $1.2 million to settle FTC charges that they “crammed” unwanted charges onto people’s cell phone bills. According to the Commission’s complaint, Jesta – which also does business as Jamster – ran phony virus-scan ads on Android mobile devices while people played the Angry Birds app. Jesta charged unsuspecting consumers through a novel, little-used billing method known as Wireless Access Protocol, or WAP, billing. WAP billing captures the phone number from a mobile device and places charges on a person’s mobile phone bills without their permission.

Gas Prices

gas station

The FTC has approved the sale of a petroleum terminal in Idaho to resolve charges that Tesoro Corporation’s acquisition of Chevron Corporation’s petroleum-related assets would have reduced competition and violated U.S. antitrust laws. According to the FTC, without divestiture, the deal would have given Tesoro, an oil refiner, ownership of two of the three full service light petroleum terminals in Boise, significantly reducing competition for local terminal services and leading to higher gasoline prices.

Check It Out

someone writing a check

Certegy Check Services, Inc., one of the nation’s largest check authorization service companies, has agreed to pay $3.5 million to settle FTC charges that it violated the Fair Credit Reporting Act (FCRA). Certegy is a consumer reporting agency that compiles people’s personal information and uses it to help retailers determine whether to accept a person’s checks. The FTC’s complaint alleged that Certegy did not follow proper dispute procedures and did not have reasonable processes to assure maximum possible accuracy of the information it provided to its merchant clients.

Debit Don’t

calculator and financial documents

At the request of the FTC, a U.S. district court has stopped an online payday lending operation that used people’s personal financial information to debit their bank accounts in increments of $30 without their permission. The FTC alleged that the defendants – Sean C. Mulrooney, Odafe Stephen Ogaga, and five companies they controlled – collected consumers’ names, Social Security numbers, bank routing numbers, and bank account numbers, which allowed them to access consumers’ checking accounts.


"The Internet of Things holds great promise for innovative consumer products and services. But consumer privacy and security must remain a priority as companies develop more devices that connect to the Internet."

FTC Chairwoman Edith Ramirez

CAR-dinal Rule

Two car dealers have agreed to settle the FTC’s charges that they falsely advertised certain discounts for their vehicles. According to the FTC, Timonium Chrysler, Inc., and Ganley Ford West, Inc., advertised discounts and prices that were not available to the typical driver.

Affordable Care Act

The FTC will host a roundtable September 19 to discuss how to empower and protect people from scammers when healthcare marketplaces open in October under the Affordable Care Act (ACA). The roundtable will take place at the FTC’s Conference Center in Washington, DC. The event will be webcast. To register to attend, email your name and organization to

Protecting Personal Medical Data

The FTC filed a complaint against LabMD, Inc., a medical testing laboratory, alleging that the company failed to reasonably protect the security of consumers’ personal data and medical information. The complaint alleges that LabMD billing information for more than 9,000 people was found on a peer-to-peer (P2P) file-sharing network. Subsequently, LabMD documents containing the sensitive personal information of at least 500 people were found in the hands of identity thieves.


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