News from the Federal Trade Commission - August 2012

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Penn Corner August 2012

Google to Pay Millions

Google to Pay Millions
Google Inc. has agreed to pay $22.5 million to settle FTC charges that it misled users of Apple's Safari internet browser, violating an earlier settlement with the FTC. That’s a record civil penalty against a single defendant for an FTC order violation. Google had said it wouldn’t put tracking “cookies” on Safari users’ computers if they used the browser’s default settings, but according to the FTC, the company circumvented Safari’s default cookie-blocking setting, and did indeed place the tracking cookies on many computers. A tracking cookie enables an advertising network to collect information about someone’s web browsing, and use it to serve up ads related to their interests. For more, read Milking Cookies: The FTC’s $22.5 Million Settlement with Google.

HireRight Did it Wrong

Hire right did it wrong
HireRight Solutions, Inc. will pay a $2.6 million penalty for alleged violations of the Fair Credit Reporting Act that led to people being denied employment or employment-related benefits. According to the FTC, HireRight Solutions, which provides background reports on prospective and current employees to employers nationwide, failed to take reasonable steps to ensure that information in the reports was current and reflected updates, like the expungement of criminal records. In addition, the FTC says, HireRight Solutions' failures allowed obviously inaccurate information — many times from another person’s record — to appear in a report, or for the same criminal offense to appear in the same report many times.

Phony “Cure” for Alcoholism Stopped

Phony cure for alcoholism stopped
The FTC and the Florida Attorney General have won a court judgment of more than $700,000 against a company that allegedly targeted alcoholics. According to the FTC, Alcoholism Cure Corporation and Robert Douglas Krotzer, its owner, tricked people into paying hundreds or thousands of dollars for a program in which the company’s “team of doctors” supposedly created customized, low-cost, and permanent alcoholism cures that would allow people to “drink socially.” In reality, the FTC says, the program prescribed ineffective dietary supplements, and the company threatened to publicly reveal people’s alcoholism when they tried to cancel their memberships. The defendants also charged people’s accounts fees from $9,000 to $20,000 without authorization, the FTC alleged. 

Spanish-Speaking Homeowners Targeted

homeowners targeted
The FTC has stopped a Dominican mortgage assistance scam that allegedly defrauded Spanish-speaking homeowners across the U.S. of more than $2 million. According to the FTC, the defendants, who pretended to be in Chicago, promised to lower people’s monthly mortgage payments dramatically in exchange for a hefty fee. Speaking in Spanish and targeting homeowners behind on their payments or facing foreclosure, the telemarketers would empathize about the tough economy and claim to be approved by the homeowner’s lenders or the government, the FTC said. Even after paying fees of $995 to $1,500, few homeowners got a loan modification, the FTC alleged, and any who did could have gotten it for free.

The Heart of the Matter

The Heart of the Matter
To settle FTC charges that its recent acquisitions of two cardiology groups reduced competition in Reno, the largest provider of acute care hospital services in northern Nevada will release its staff cardiologists from "non-compete" contract clauses. According to the FTC, 88 percent of the cardiologists practicing in the Reno area are affiliated with Renown Health. The proposed order would allow cardiologists working for Renown Health to seek other employment, including positions with other hospitals in the Reno area.

"No matter how big or small, all companies must abide by FTC orders against them and keep their privacy promises to consumers, or they will end up paying many times what it would have cost to comply in the first place."

Jon Leibowitz, FTC Chairman

FTC Testifies on Facial Recognition

The FTC has told a Senate Judiciary subcommittee that it is looking at the benefits of facial recognition technologies to consumers. The technologies — from the simple detection of a face in an image to the biometric analysis of facial images to match one face to another or determine someone’s demographic characteristics — are used in a variety of contexts, including digital signs, mobile applications, and social networks. FTC staff will recommend best practices for using the technologies in a way that respects consumer privacy.

Refunds! Refunds! Refunds!

Reebok Toning Shoes: More than 300,000 people who bought Reebok toning shoes and apparel are getting refunds as part of the FTC’s $25 million settlement with the company for alleged deceptive advertising. Reebok claimed its toning shoes would strengthen and tone leg and buttock muscles more than regular shoes. 

Phony Prize Money: About 500 people allegedly tricked into paying to collect a fake prize in a multi-million-dollar sweepstakes are sharing $183,000 in refunds.

Mortgage Modification Scam: More than $723,000 is headed to 13,000 people allegedly deceived by a company that falsely claimed it would negotiate with their lenders to modify their mortgages.

Money-making Scam: The FTC is sending 9,000 refund checks totaling more than $850,000 to people who paid for promises that they could earn a big income with the "Stefanchik Program" to buy and sell privately held promissory notes and mortgages.


                More >


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