News from the Federal Trade Commission - July 2012

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Penn Corner July 2012

Room for Improvement

Room For Improvement
The FTC has filed suit against global hospitality company Wyndham Worldwide Corporation and three of its subsidiaries for not protecting people’s personal information. According to the FTC, the alleged security failures led to three data breaches at Wyndham hotels in less than two years; as a result, the credit card data of hundreds of thousands of people was exported to an Internet domain registered in Russia, and millions of dollars were lost to fraud. In its complaint, the FTC says that Wyndham’s privacy policy misrepresented the security measures the company took to protect people’s information. And even after faulty security led to one breach, the FTC charged, Wyndham failed to correct security vulnerabilities it knew about or take other reasonable measures.

Costly Calls

Costly Calls
The company behind an alleged prepaid calling card scheme targeting immigrants has agreed to stop making misleading claims, pending a trial in which the FTC will seek to stop the deceptive claims permanently and get callers’ money back. According to the FTC, DR Phone misrepresented the talk time people would get with its prepaid phone cards and didn’t adequately disclose additional fees. In fact, cards tested by the agency delivered, on average, only 40 percent of the minutes advertised. "Vietnam Best" and "Pearls of Africa" were among the cards sold in convenience stores, groceries, and kiosks nationwide, and online. Read When Minutes Matter to learn more.

A Window On “Up To” Claims?

Window Claims
When marketers use the phrase "up to" in claims about their products, many people are likely to believe that the maximum result is what they will achieve, says a new FTC-commissioned study. The study looked at what a test group of people thought about ads for replacement home windows that said they would save people "up to 47%" in energy costs. Many people believed the ads meant users typically would realize 47% savings. The study reinforces the FTC's view that advertisers should be able to show that people are likely to achieve the maximum results under normal circumstances. The test was conducted during investigations of five companies that settled FTC charges in February for unsupported claims about their windows.

Rental Machine Refunds

The FTC is mailing 454 refund checks totaling more than $2.9 million to people who lost money from a scam that promoted video rental machines as a business opportunity. American Entertainment Distributors, Inc., allegedly got people to pay about $30,000 or more apiece for video rental vending machines by telling them they could expect to earn between $60,000 and $80,000 a year, or recoup their initial investment in six to 14 months. But the defendants had no reasonable basis for their claims, the FTC says, and all investors lost money. For more on the refunds, visit For more on evaluating claims about business opportunities, read Looking to Earn Extra Income?

"The FTC hears from American consumers every day about illegal robocalls and how intrusive they are. We're ratcheting up our efforts to stop this invasion of consumers' privacy."

Jon Leibowitz, FTC Chairman

Mark Your Calendar

Thanks to autodialers that can cheaply send out thousands of phone calls every minute, the number of robocalls — calls with recorded messages instead of live people — has spiked. And many of them are illegal: companies can’t call with a recorded sales message if you haven't given your written permission. Learn more with two new videos at Have questions? FTC staff will be answering them on Twitter and Facebook Tuesday, July 17, 2012, at 1 pm ET. Follow the @FTC and/or tweet questions to #FTCrobo. The FTC also is hosting a robocall summit in October to look at enforcement, education, and tech issues related to stopping illegal robocalls.

Dealing With ID Theft

A new suite of materials about identity theft and identity protection is available from the FTC at a brief brochure with topline tips everyone should have, a bigger booklet with step-by-step instructions on dealing with the crime, and a brochure on how to recognize a new twist — child identity theft. You’ll also find information on medical and tax-related identity theft, and three new minute-long animated videos that focus on the most important messages.

Pet Project

The FTC will host a one-day public workshop on October 2, 2012, to look at competition and consumer protection issues in the pet medications industry. The quality and cost of pet medications is an important issue for many people: 62 percent of U.S. households own a pet, and Americans spend an estimated $7 billion annually on pet medications.

Kids, Parents, and Video Games

If you’ve got kids, and you’ve got video games, you also have free tools to help you learn about games your kids want to play. Game ratings and parental controls can help you make sure your kids are playing according to your rules — like not accessing online features if you don’t want them to. Kids, Parents, and Video Games also includes information about parental controls and ratings for mobile apps.


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  • Employers may look at your credit history before hiring you, so get a free credit report at before you apply for a job:
  • If you’ve got kids, and you’ve got video games, you also have free tools like game ratings and parental controls:
  • Getting robocalls you don’t want? Hang up. Pressing any number can lead to more calls:

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