News from the Federal Trade Commission - December 2012

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Penn Corner December 2012

Parents Would App-reciate More Info

children using apps

A new FTC staff report takes a second look at kids’ apps sold in the Google Play and Apple App stores. According to the follow-up report, most apps still don’t say anything about the information they collect. And many share kids’ personal info like geolocation or phone numbers with other companies — without telling parents. A lot of apps also include interactive features like advertising, the ability to make purchases within the app, and links to social media without disclosing. Since a lot of apps send the data they collect to relatively few companies, those companies could develop detailed profiles of kids as well, the report says.

Seeing the Sites

website url

A big online advertising network that allegedly tracked people’s interest in sensitive medical and financial issues has agreed to settle FTC charges it used “history sniffing” to secretly gather data from millions of people. According to the FTC, people who visited any of Epic Marketplace Inc.’s sites received a cookie supposedly to track which Epic sites they visited and what ads they viewed so the company could target ads to their interests. Despite promising to stick to its own sites, Epic tracked people to sites on topics including fertility, impotence, incontinence, disability insurance, credit repair, and personal bankruptcy. As a result, people were assigned interest segments like “Incontinence” or “Pregnancy-Fertility Getting Pregnant,” the FTC alleges, and sent targeted ads.

A New Bookmark:

consumer information from the FTC

Looking for consumer information from the FTC? It’s at ( The refreshed site includes videos and games, better search results, a blog, and streamlined articles that highlight actionable, practical tips about a wide range of topics — from getting your free credit reports, buying a car, and protecting your personal information to evaluating claims for weight loss products, judging potential business opportunities, and dealing with illegal robocalls. For info on the latest scams, visit the Scam Alerts page, or comment on the blog about what topics interest you. To be the first to know about the newest information, sign up for email updates. 

When is the Price the Price?


The FTC has warned 22 online hotel reservation sites that not including mandatory “resort fees” in the prices they quote online may be deceptive. Resort fees might be for newspapers, fitness facilities, pools, or internet access, but what’s key is that they’re not optional — you pay the fees even if you don’t use the services. People who have complained to the FTC said they often didn’t know about the fees — which can run as high as $30 a night — until after they arrived at their hotels. For more on what to do if you find yourself facing an unexpected resort fee, read Hotel Fees That Are More Than You Bargained For.

Taken for a Ride


The FTC has stopped a California-based auto loan modification operation that allegedly lied when it promised people it could lower their monthly car loan payments and stop repossession. According to the FTC, Hope for Car Owners, LLC, charged people hundreds of dollars for its supposed help, even telling people to stop paying their auto lenders. But once people paid the company, the defendants did nothing to get the customers the loan modifications they promised and denied refunds to customers who asked, the FTC says. For more on auto loan modification scams, watch a new video from the FTC. The message: if you have trouble making your monthly car payments, contact your lender directly. 

Fake FTC Faces Real Trouble

woman on phone and computer

The real FTC has shut down a robocall operation that allegedly claimed it could help people get refunds from the agency. According to the complaint, the company spoofed the FTC’s toll-free phone number and used the website address to make people think it had a connection to the FTC. The scammer’s goal: trick people into turning over their bank account numbers and other personal information by saying a refund would be deposited directly into their accounts. The truth is, the FTC never asks for your bank account information and issues redress only by check. For more on the FTC’s redress process, read Getting Your Money Back.


While we think most companies have the best intentions when it comes to protecting kids’ privacy, we haven’t seen any progress when it comes to making sure parents have the information they need to make informed choices about apps for their kids. In fact, our study shows that kids' apps siphon an alarming amount of information from mobile devices without disclosing this fact to parents. All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job. We'll do another survey in the future and we will expect to see improvement.

Jon Leibowitz, FTC Chairman

"Product Hopping" in the Drug Industry

When drug companies make minor, non-therapeutic changes to brand-name drugs to obstruct generic competitors and preserve monopoly profits on a patented drug, it may violate U.S. antitrust laws, the FTC has explained in an amicus brief filed before a federal court in Pennsylvania. For example, using a tactic called “product switching” or “product hopping,” a brand drug company withdraws its original product and then offers a reformulated brand drug that offers patients little or no therapeutic benefit. Because no generic substitute is available for the reformulated drug, consumers have to switch to the reformulated brand drug.

Heads Up on Mouthguard Claims

The FTC has approved a final order settling charges against mouthguard marketer Brain-Pad, Inc., for making allegedly deceptive claims that its mouthguards can reduce the risk of concussions. The agency also sent warning letters to 18 other sports equipment manufacturers that may be making deceptive claims that their mouthguards, headbands, or other devices can reduce the risk of concussions. For more on concussions, visit

Contemptible Conduct

At the FTC’s request, a federal court has found a credit repair operation in contempt for continuing to pitch bogus credit repair services in violation of a prior court order. The court has ordered defendants Kevin Hargrave and Latrese Hargrave, working under company names including BFS Empowerment Financial Services Inc. and Help My Credit Now Credit Services Inc., to pay $6.4 million to the FTC within 30 days and permanently shut down their credit repair business.


                More >


  • Do you use online reviews and recommendations when you shop? A new FTC video looks at what to consider before you do:
  • Having trouble making your car payments? Don’t get caught by an auto loan modification scam:
  • Do your kids use apps? Of course they do. The FTC has 6 Timely Tips for Using Mobile Apps with Kids:
  • Still have some last-minute holiday shopping to do? Read these 12 tips to help you shop wisely:

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