News from the Federal Trade Commission - September 2016

Federal Trade Commission sent this bulletin at 09/27/2016 02:45 PM EDT

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Alleged Free Trial Scammers to Pay Millions in Settlement

IWorks, with its owner and others, settled FTC charges from a 2010 case in which it allegedly ran a “free trial” scheme that robbed people of over $280 million. The company and its owner, Jeremy Johnson, will hand over approximately $20 million — in cash, stock, jewelry, aircraft, real estate and other assets — to settle the charges. In a related Department of Justice criminal case, Johnson was sentenced to over 11 years in prison for his involvement in the scheme. IWorks’ websites promoted “trial” memberships for phony money-making products, but wound up charging unsuspecting consumers $129.95, and recurring monthly fees, the FTC says.

Debt and Mortgage Relief Companies Banned from Business

The FTC shut down several companies for allegedly breaking the law. Payday Support Center enticed delinquent borrowers to make payments to its “financial hardship program” to reduce their debt. However, the FTC said payments didn’t go toward paying off the loans. Separately, the FTC obtained court orders barring Audubon Financial Group and AFS Legal Services from debt collection. The companies allegedly threatened and deceived people to collect debts. The FTC also obtained a court order to stop a loan modification and debt relief operation for falsely promising homeowners to prevent foreclosure. The FTC alleged that the companies collected thousands of dollars up front but didn’t deliver on their promises.

Texas Car Dealers to Pay Civil Penalty

Three Dallas-area car dealerships operating as Southwest Kia will pay an $85,000 civil penalty to settle FTC charges that they violated an order barring them from deceptively advertising the cost of buying or leasing their cars. Despite settling FTC charges in 2014, Southwest Kia continued to avoid clearly disclosing key terms of its advertised deals. While ads plugged car payments as low as $179 or $250 per month, in very fine print were the terms to get those low payments — like paying $2,000 up front plus another $8,000 at the end of a 38-month financing term.

FTC Says Semiconductor Merger Would Have Raised Prices

ON Semiconductor Corporation agreed to sell its Ignition IGBT business to settle FTC charges that its merger with Fairchild Semiconductor would reduce competition for transistors used in auto ignition systems. Ignition IGBTs are semiconductors sold to automotive suppliers that make ignition switches for automakers. According to the FTC, without a remedy, the merger would likely lead to higher prices and less innovation in the worldwide market for Ignition IGBTs.

How NIST’s Cyber Framework Aligns with FTC Guidance

A blog post on the FTC’s Business Center gives guidance to businesses on how the National Institute for Standards and Technology (NIST) cybersecurity framework aligns with the FTC’s data security program. NIST’s Cybersecurity Framework is consistent with the approach the FTC has followed in its law enforcement actions and messages to businesses, including the recent Start with Security guidance.

“(Payday Support Center) promised to help people struggling to make payments on their payday loans. Instead, they took the money and ran, leaving their customers deeper in debt.”

— Jessica Rich, Director, FTC Bureau of Consumer Protection

Academic Journal Publisher Charged with Deception

OMICS Group, a publisher of online research journals, is facing FTC charges that it deceptively pitched researchers to publish articles in its journals. OMICS allegedly misrepresented the caliber of its publications, lied about its peer review standards, and didn’t disclose, upfront, the hundreds to thousands of dollars authors had to pay to be published.

VW Owners: Check Your Options Before You Sell

Since the Volkswagen settlement announcement, the FTC has heard from people getting “buyback” offers for their VW or Audi 2.0 liter diesel cars. The FTC warns these offers are deceptive and can hurt a person’s rights to get their fair share of the settlement. VW will not buy back the affected cars until late Fall 2016. Learn more at VWCourtSettlement.com.

FTC Gives Tips on Connected Rental Cars

An FTC blog post provides tips on protecting personal information when renting connected cars — vehicles with built-in information and entertainment systems. These rental cars may store work, home and other addresses entered in the GPS — as well as messages and contacts’ information if connected to a mobile device. Among other tips, the FTC advises deleting that data before returning the rental car.

Your Money Back

Oro Marketing Refunds

The FTC is mailing 6,192 refund checks totaling over $1.3 million to people defrauded by Oro Marketing, Inc. This telemarketing scheme allegedly promised that people could make money reselling high-end goods supposedly made by Gucci, Ralph Lauren and the like. The FTC says the company charged people over $400 per package but delivered only shoddy, off-brand products that were not made by those companies.

If you get a refund check from the FTC, deposit or cash it within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide account information before refund checks can be cashed. Want information about the FTC’s refund program? Visit ftc.gov/refunds

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