News from the Federal Trade Commission - April 2016

Federal Trade Commission sent this bulletin at 04/18/2016 02:58 PM EDT

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News from the Federal Trade Commission - April 2016

Volkswagen’s “Clean Diesel” Claims

The FTC filed a complaint against Volkswagen Group of America, Inc. for making deceptive advertising claims about its diesel engine automobiles. Under its Volkswagen and Audi brands, Volkswagen allegedly sold or leased more than 550,000 vehicles with concealed, illegal “defeat devices.” The defeat devices contained software hiding the fact that the vehicles’ emissions greatly exceeded government emissions standards. VW extensively promoted its “Clean Diesel” vehicles as environmentally friendly, having low emissions, and being legally compliant.

Lord & Taylor’s Paid Advertising Ploy

According to an FTC complaint, Lord & Taylor failed to reveal that it paid 50 fashionistas and an online fashion magazine to praise one of its dresses on Instagram and in an online article, all as part of an ad campaign. The FTC says what looked like independent reviews actually were ads dressed up as honest opinions, with no mention that these were paid promotions. The FTC’s proposed settlement prohibits Lord & Taylor from misrepresenting paid advertising as independent, objective opinions.

Deceptive Cancer Charities Settle Charges

Cancer Fund of America (CFA) and Cancer Support Services (CSS) agreed to settle charges brought by the FTC, all 50 states, and the District of Columbia that, while those two groups claimed to help cancer patients, they actually spent the overwhelming majority of donations on their operators, families and friends, and fundraisers. According to the order, CFA and CSS will shut down and their assets will be liquidated. There also is a judgment against CFA, CSS, and their leader, James Reynolds, of $75,825,653 – the amount consumers donated between 2008 and 2012.

All-Natural Personal-care Products?

Four companies agreed to settle charges that they misrepresented their skin care products, shampoos, and sunscreens as “all natural” or “100% natural,” when they actually contained synthetic ingredients. The FTC says the claims appeared in both product labels and product ads. The companies have agreed to proposed orders to stop saying a product is 100% natural unless they have reliable evidence to back up the claim. The orders also would require proof for any claims the companies make about a product’s environmental or health benefits. The proposed orders are subject to public comment through May 12, 2016, after which the Commission will decide whether to make the orders final. The Commission issued a complaint against a fifth company, California Naturel, seeking the same relief.

FTC Says Company Blocked Access to Low-Cost Pain Meds

The FTC charged Endo Pharmaceuticals Inc. and several other drug companies with violating antitrust laws by using pay-for-delay settlements to block consumers’ access to lower-cost generic versions of two prescription pain medications, Opana ER and Lidoderm. “This lawsuit reflects the FTC’s commitment to stopping pay-for-delay agreements that inflate the prices of prescription drugs and harm competition, regardless of the form they take,” said FTC Chairwoman Edith Ramirez. The FTC’s case seeks to stop the defendants’ conduct, disgorge their ill-gotten gains, and bar them from similar deals in the future.

"The FTC and our state enforcement partners have ended a pernicious charity fraud that syphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services the defendants falsely promised."

— Jessica Rich, Director of the FTC’s Bureau of Consumer Protection

In the Highlights

The FTC’s Annual Highlights of 2015 shows the agency’s accomplishments in enforcement, policy and consumer education, as well as the top consumer complaints. An infographic summarizes the work and complaint data for 2015, including top complaints about debt collection, identity theft, and imposter scams.

Fake Debt Collector Network Shut Down

The Illinois Attorney General and the FTC got a federal court in Chicago to shut down a network of fake debt collectors allegedly trying to collect phantom debt that consumers don’t actually owe. According to the FTC, the defendants also provided the bogus debt portfolios to other collectors, who then tried to collect on them.

Robocalling Pitchmen Take a Permanent Vacation

Orlando-based telemarketing company USA Vacation Station settled FTC charges that the company made millions of illegal robocalls to sell vacation packages. Under the order, the company and its owner are permanently banned from making robocalls.

Your Money Back

The FTC is returning money to people affected by three different cases. Consumers never have to pay money or provide information before they can cash refund checks from the FTC. Want information about the FTC’s refund program? Visit ftc.gov/refunds.

More than $33,000 is going back to people who lost money to Wealth Education, Inc., a company that allegedly charged homeowners an up-front fee for mortgage relief services they never received.

The FTC is mailing 1,701 checks totaling more than $596,000 to people who lost money to Kirit Patel, Broadway Global Master Inc. and In-Arabia Solutions Inc., which, the FTC says, ran a deceptive debt collection scheme.

The FTC is also mailing 2,172 refund checks totaling nearly $210,000 to people who bought “disinfectant” devices from Zadro Health Solutions, Inc., which claimed their devices “safely kill 99.99%” of targeted bacteria.

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