FTC International Monthly - January

FTC International Monthly: U.S. Competition, Consumer Protection and Privacy News


Consumer Protection and Privacy

Phantom Debt

Phantom Debt Collectors Permanently Banned from Industry in FTC Settlement

A group of phantom debt collectors will be permanently banned from the debt collection industry and required to surrender the contents of numerous bank and investment accounts under the terms of a settlement with the FTC.  The FTC’s complaint against South Carolina-based National Landmark Logistics, filed in July 2020, alleged that the defendants in the case used robocalls to leave deceptive messages claiming consumers faced imminent legal action—lawsuits or even arrest—for unpaid debts.  When consumers returned the calls, the defendants falsely claimed to be from a mediation or law firm, again threatened legal action, and used consumers’ personal information to convince consumers the threats were real.  The defendants turned around and pocketed the money, despite the fact that in many instances, consumers did not owe the debt being collected on or the defendants had no right to collect it.

Advertising Platform OpenX Will Pay $2 Million for Collecting Personal Information from Children in Violation of Children’s Privacy Law


 Online advertising platform OpenX Technologies, Inc. will be required to pay $2 million to settle FTC allegations that the company collected personal information from children under 13 without parental consent, a direct violation of a federal children’s privacy protection law.  The FTC also alleged that despite offering an opt-out option, OpenX collected geolocation information from users who specifically asked not to be tracked. 

FTC, DOJ Obtain Ban on Negative Option Marketing and $21 Million for Consumers Deceived by Background Report Provider MyLife

MyLife.com, Inc. and its CEO have been banned from engaging in deceptive negative option marketing and will pay $21 million following allegations that they tricked consumers with “teaser background reports” and trapped them in subscription programs that were difficult to cancel.  According to a complaint filed in July 2020 by the Department of Justice on behalf of the FTC, MyLife.com and its CEO claimed that the company’s background reports on particular individuals may contain arrest, criminal, and sexual offender records—even when the reports did not include such information—to try to trick consumers into signing up for auto-renewing premium subscriptions. 

Lead Generator That Deceptively Solicited Loan Applications from Millions of Consumers and Indiscriminately Shared Sensitive Information Agrees To Pay $1.5 Million Penalty

A lead generation company that collected sensitive information from millions of consumers under the guise of connecting them with lenders will pay $1.5 million in civil penalties and face restrictions on their operations as a result of an FTC lawsuit.  The FTC’s complaint alleges that since at least 2012, ITMedia Solutions LLC, a number of affiliate companies, and their owners and officers have operated hundreds of websites that were designed to entice consumers into sharing their most sensitive financial information, including their Social Security numbers and bank account information.  The defendants sold that information to marketing companies and others without regard for how the information would be used, according to the complaint.

FTC Launches Rulemaking To Combat Sharp Spike in Impersonation Fraud

The FTC launched a rulemaking aimed at combating government and business impersonation fraud, a pernicious and prevalent problem that has grown worse during the pandemic.  Impersonators use all methods of communication to trick their targets into trusting that they are the government or an established business and then trade on this trust to steal their identity or money.  The COVID-19 pandemic has spurred a sharp spike in impersonation fraud, as scammers capitalize on confusion and concerns around shifts in the economy stemming from the pandemic.  Incorporating new data from the Social Security Administration, reported harms have increased an alarming 85 percent year-over year, with $2 billion in total losses between October 2020 and September 2021.  In the Advance Notice of Proposed Rulemaking (ANPR), the FTC is seeking comment from the public on a wide range of questions about these schemes.  

FTC Returns Additional $25 Million to Consumers Who Lost Money to Business Coaching Scam

Apply Knowledge

The FTC is returning an additional $25 million to consumers who lost money to a business coaching scheme that used the names Coaching Department and Apply Knowledge, among others.  These refunds are the result of the FTC’s settlements with the scheme’s ringleaders, the companies through which the scheme operated, and a payment processor that helped facilitate the scheme.  According to the FTC, the defendants conned millions of dollars from consumers by falsely telling them they could earn thousands of dollars per month by purchasing their business coaching services and establishing an Internet business.  The complaint alleges that consumers who bought into the scheme lost thousands—sometimes tens of thousands—of dollars each, most of it by incurring huge credit card debt at the defendants’ urging.  Prior refund distributions in this case totaled more than $2 million.

Merchant Cash Advance Providers Banned from Industry, Ordered To Redress Small Businesses

Two of the defendants behind an alleged small business financing scheme, RAM Capital Funding, LLC and its owner, will be permanently banned from the merchant cash advance and debt collection industries, and required to pay $675,000 to settle FTC charges that they used deceptive and illegal means to seize assets from small businesses, non-profits, and religious organizations.  The FTC alleged that since 2015, the defendants deceived small businesses and other organizations in violation of the FTC Act and the Gramm-Leach-Bliley Act by requiring personal guarantees and upfront fees from consumers after representing they wouldn’t make these demands, providing less funding to consumers than promised, and debiting more from consumers’ bank accounts than they said they would.  The agency also alleged that the defendants made unauthorized withdrawals from consumers’ accounts and used unfair collection practices, sometimes including threatening physical violence.  As part of the settlement, the defendants are ordered to vacate any judgments against their former customers and to release any liens against their customers’ property.


FTC Order Protects Retail Fuel Customers Following Global Partners LP’s Acquisition of Wheels

Global Partners LP and Richard Wiehl agreed to divest to Petroleum Marketing Investment Group, LLC, seven stores that sell gasoline and diesel fuel in five local markets in Connecticut to settle FTC charges that Global’s proposed acquisition of 27 retail gasoline and diesel outlets owned or operated by Wiehl under the Wheels store brand violates federal antitrust laws.  The complaint alleges that in each of the local gasoline and diesel retail fuel markets where the Commission identified likely harm, the acquisition would reduce the number of independent market participants to three or fewer.

FTC Fines Biglari Holdings Inc. and Clarence L. Werner, Founder of the Truckload Carrier Werner Enterprises, Inc. for Repeatedly Violating Antitrust Laws by Failing To File

Restaurant chain owner and investment fund operator Biglari Holdings Inc. agreed to pay a $1.4 million civil penalty to settle FTC charges that two acquisitions it made of shares of restaurant operator Cracker Barrel Old Country Store, Inc. violated the HSR Act.  According to the complaint, these two acquisitions, together with Biglari’s prior holdings of Cracker Barrel, caused it to exceed an HSR filing threshold, triggering its obligation to file an HSR Form and wait before completing the acquisition.  Failing to do so violated the HSR Act.  The FTC also announced that Clarence L. Werner, founder of truckload carrier Werner Enterprises, Inc. will pay a $486,900 civil penalty to settle charges related to the non-reporting of acquisitions of company stock, including exercise of stock options and vesting of restricted stock, while he was a director of the company, that violated the HSR Act.  This includes the non-reporting of acquisitions even after learning that he was in violation of the HSR Act.

In Other News

FTC’s Lois C. Greisman Earns Presidential Rank Award

The FTC announced that Lois C. Greisman, Associate Director for Marketing Practices, Bureau of Consumer Protection, has received the 2021 Presidential Rank Award.  In Ms. Greisman’s 29-year career at the FTC, she has served as Attorney Advisor to two FTC Chairs and Chief of Staff to a third Chair.  Her appointment to the Senior Executive Service (SES) in 2002 was as the agency’s Associate Director for Planning and Information in BCP, where she led development of the National Do Not Call Registry and expanded the FTC’s Identity Theft Program, as well as its Consumer Response Center.   Ms. Greisman has received recognition nationally and internationally as a consumer protection leader, innovator, and advocate.  Her expertise has made her a resource throughout the FTC and among worldwide law enforcement authorities on combating consumer fraud.  Her recent work in spearheading several of the FTC’s initiatives combating coronavirus-related scams, in coordination with federal, state, and international law enforcement and industry members, epitomizes her results-driven orientation and leadership skills.  She has hosted and mentored FTC International Fellows from around the world.  The Presidential Rank Award is among the highest honors awarded to a select group of the SES, who serve in key positions between top presidential appointees and the rest of the federal workforce.

FTC and DOJ Hold Virtual Public Workshop Exploring Competition in Labor Markets

FTC Chair Kahn gave remarks as part of a two-day FTC-DOJ virtual workshop, Making Competition Work: Promoting Competition in Labor Markets.  The workshop brought together lawyers, economists, academics, policy experts, labor groups, and workers, to explore recent developments at the intersection of antitrust and labor, as well as implications for efforts to protect and empower workers through competition enforcement and rulemaking.  The video, transcript, and other materials are available here.

Do Not Call Report

FTC Issues Biennial Report to Congress on the National Do Not Call Registry

The FTC issued its biennial report to Congress on the National Do Not Call (DNC) Registry.  The new report details the number of consumers – now totaling more than 244 million – who have placed their telephone numbers on the Registry during the past two years.  It also states that the FTC received more than five million Do Not Call complaints in fiscal year 2021, with people overwhelmingly reporting these violations came via robocalls, as opposed to live telemarketing.  Imposter scam and warranty protection scam calls led list of commonly reported call topics in FY 2021, followed by calls related to reducing debt and medical needs and prescriptions.  Since the pandemic began, the FTC has received more than 18,000 COVID-related Do Not Call complaints, according to the report.  

FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 2022

The FTC adjusted the maximum civil penalty amounts for violations of 16 provisions of law the agency enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.  The Act directs agencies to implement annual inflation adjustments based on a prescribed formula linked to a consumer price index.  The maximum civil penalty amount has increased from $43,792 to $46,517 for violations of Sections 5(l), 5(m)(1)(A), and 5(m)(1)(B) of the FTC Act, 7A(g)(l) of the Clayton Act and Section 525(b) of the Energy Policy and Conservation Act.  It has increased from $576 to $612 for violations of Section 10 of the FTC Act.  The maximum civil penalty amount has increased from $1,246,249 to $1,323,791 for violations of Section 814(a) of the Energy Independence and Security Act of 2007.  The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register notice.