News from the Federal Trade Commission - April 2013

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News from the Federal Trade Commission - April 2013

And the winner is…

robocall challenge

Out of nearly 800 eligible submissions to the FTC’s Robocall Challenge, two winners tied for the $50,000 prize. Serdar Danis and Aaron Foss each will receive $25,000; both of their proposals use technology to intercept “blacklisted” robocaller numbers and accept “whitelisted” numbers from other callers. Both proposals also use a CAPTCHA-style test to prevent illegal calls from ringing through to a user.


kids' apps infographic

If you’ve got kids in your life, you’ve probably got a collection of kids’ mobile apps. A new FTC infographic, available in English and Spanish, shows what app developers might be doing — but might not be telling you — and what to consider when downloading an app on your phone or tablet.

Giving them the business

filing out a form

At the FTC’s request, a federal judge has temporarily stopped an operation that allegedly tricked small businesses and non-profits into paying big fees for directory listings that the organizations didn’t want or need. According to the FTC, Construct Data Publishers contacted retailers, home-based businesses, and local associations with mailings that appeared to be asking the recipient to update information for an “exhibitors’ directory” for upcoming trade shows. Many recipients didn’t realize that by returning a signed form, they agreed to pay thousands of dollars and, often, the employees who returned the form weren’t authorized to enter into contracts for their employer. Some organizations paid the defendants – including late charges – just to stop late notices, additional fees, and harassment. The FTC is seeking to end the alleged scam and require the defendants to refund the fees.

Health care costs

health care form

The FTC and the Idaho Attorney General are seeking to block in federal court the merger of St. Luke’s Health System and Idaho's largest independent, multi-specialty physician practice group, Saltzer Medical Group. According to the joint complaint, the combination of the hospital and the medical group would allow St. Luke’s to demand higher rates for health care services provided by primary care physicians in Nampa, Idaho, and surrounding areas, ultimately leading to higher costs for health care consumers.


“The solutions that our winners came up with have the potential to turn the tide on illegal robocalls, and they show the wisdom of tapping into the genius and technical expertise of the public.”

Charles Harwood, Acting Director, FTC’s Bureau of Consumer Protection

Debit debacle

A payment processor has settled FTC charges that they debited millions of dollars from tens of thousands of peoples’ bank accounts without permission. The settlement bans Automated Electronic Checking Inc. (AEC) and its principals from processing electronic payments and requires them to pay $950,000. Payment processors provide a link between merchants and consumers’ banks.

Survey says…

An FTC undercover shopper survey found that video game retailers continue to enforce age-based ratings and movie theaters have made marked improvement in box office enforcement. Only 13 percent of underage shoppers were able to buy M-rated video games, while 24 percent were able to buy tickets to R-rated movies, a historic low. 

Faux-ny claims

Three clothing retailers have agreed to settle FTC charges that they misled shoppers by claiming that their products contained “faux fur.” Not only did the products contain real fur, but The Neiman Marcus Group, Inc.,, Inc., and Eminent, Inc. also failed to name the animal that the fur came from.


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