News from the Federal Trade Commission - April 2012

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Penn Corner April 2012

A Day In Your Life

A Day In Your Life
How much personal information do you share in a day? A new FTC video, Sharing Information: A Day in Your Life, demonstrates how you may — perhaps unknowingly — share personal information in the course of your day. The video accompanied the release of the FTC’s final report on privacy, Protecting Consumer Privacy in an Era of Rapid Change, which calls on companies to give people greater control over the collection and use of their personal data.

Driven to Deception

Driven to Deception
The FTC has asked a U.S. district court to stop two California-based auto loan modification operations that allegedly told people they could get their car payments lowered and prevent their cars from being repossessed. Hope for Car Owners and Auto Debt Consulting took hundreds of dollars in fees, even telling some people to stop paying their lenders. But they didn’t modify loans or give promised refunds, the FTC says. At least one person’s car was repossessed, and others were told to hide their cars to avoid repossession. Read Ads for Auto Loan Modifications: You May Be Able to Drive a Better Deal with Your Lender for more.

Payday Loans Fuel Race to the Bottom

One Click Cash
A payday lending scheme has been charged with piling inflated fees on borrowers and making threats when collecting debts, says the FTC. Instead of the one-time finance fee borrowers expected, the defendants allegedly made multiple withdrawals from borrowers’ bank accounts, charging a fee each time and leaving borrowers with debts of more than triple the amount they had borrowed. Two of the defendants — automobile racer Scott Tucker and his brother Blaine Tucker — allegedly transferred more than $40 million collected by the payday companies to another company to pay for “sponsorship” fees benefitting Tucker's automobile racing. According to the FTC, over the last five years the defendants’ tactics have generated more than 7,500 complaints. Read Fraudulent Online Payday Lenders: Tapping Your Bank Account Again and Again for more.

Mass Joinder Mess

Mass Joinder Mess
An operation that took in more than $1 million in an alleged mortgage relief scam involving “mass joinder” lawsuits has been stopped at the FTC’s request. According to the complaint, the defendants masqueraded as a specialty law firm and sent out what looked like a class action settlement notice. They told people that if they joined a group lawsuit against their lenders, they could stop foreclosure or get concessions, like having their principal or interest rate reduced. But after charging each person $6,000 to $10,000, the defendants didn’t get the promised results, the FTC says. Read Mass Joinder Lawsuits: A New Twist on Foreclosure Rescue Scams for more.

Record Fines for Robocallers

In response to FTC charges, a federal judge has ordered the defendants in a deceptive robocall scheme to pay $30 million in fines. The defendants behind Cash Grant Institute made more than eight million robocalls, including more than 2.7 million to phone numbers on the National Do Not Call Registry, falsely telling people they had qualified for "cash grants." The $30 million in fines is the largest penalty ever imposed for calling numbers on the Do Not Call Registry. Meanwhile, the FTC put another robocall operation out of business, settling charges that it bombarded people with more than two billion calls pitching things like worthless extended auto warranties.

Site’s Security Didn’t Rock

Rock You
The operator of social game site RockYou has agreed to settle charges that, while touting its security, the site failed to protect the privacy of its users, allowing hackers to steal the personal information of 32 million users. The site, used to put together photo slide shows, also allegedly collected almost 180,000 children’s email addresses and passwords without their parents' consent, in violation of the Children’s Online Privacy Protection Act. Kids also were able to create profiles and post personal information on slide shows that could be shared online. The settlement requires RockYou to implement a comprehensive data security program.

"We ask who should control the personal information consumers reveal — about sites they view, purchases they make, people they talk to, even physical locations they visit — when they go online or use their mobile devices. Our resounding answer? Consumers should have choice and control."

— Jon Leibowitz, FTC Chairman

Pyramid Scheme Burns Participants

At the request of the FTC, a judge has ordered the operators and top promoters of a pyramid scheme to pay $17 million for refunds to people harmed by the scam. BurnLounge had touted itself as a cutting-edge way to sell digital music through multi-level marketing, but the defendants were operating an illegal pyramid scheme, the FTC says, where most compensation came from recruiting others into the plan. Most people lost money.

Are Two Hospitals Better Than One?

A federal judge has halted a merger between two hospitals in Rockford, Illinois, finding that the combination requires a thorough review by the FTC in an administrative trial. The FTC charged that OSF Healthcare System’s plan to acquire rival Rockford Memorial Hospital would reduce competition and lead to higher prices for inpatient hospital services sold to commercial health plans.

Tech Help for Small Business

Do you run a small business that relies on technology in some way? Then visit’s new small business page, where you’ll find information that can help you protect your data, your networks, and your IT systems. That includes how-to videos and tutorials, training materials for employees, free email updates, and more.


                More >


  • Your identity’s been stolen — what next? Check out the FTC's step-by-step identity theft victim recovery guide:
  • Did you know April is Financial Literacy Month? It’s a great time to check out the FTC’s free money-related resources:
  • Will they really pay off your car loan, no matter what you owe? For some, a dealer’s promise could be misleading:


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