News from the Federal Trade Commission - October 2013

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october2013

First case on debt collection by text

debt text messages

A debt collector will pay $1 million to settle FTC charges that they used text messaging to collect debts in an unlawful manner. The FTC alleged that Archie Donovan and his companies didn’t disclose they were debt collectors; illegally revealed debts to people’s family members, friends, and co-workers; and threatened to sue people or garnish their wages. In addition to the $1 million civil penalty, the settlement requires the defendants to stop sending text messages that don’t include the disclosures required by law, and to get permission before texting consumers.

Text spam

text spam

An affiliate marketing company has settled the FTC’s charges that it allegedly sent more than 42.5 million deceptive text messages. According to the FTC’s complaint, Rentbro, Inc., and its principals, Daniel Pessin and Jacob Engel, texted people to trick them into thinking they had been selected to get $1,000 gift cards to major retailers including Best Buy, Target, and Walmart. Recipients who tapped a link in the message ended up at a website that required them to give up personal information or buy items to qualify for the so-called free gift card.

Native advertising workshop

native advertising workshop

The FTC will host a workshop on December 4 to examine the practice of blending advertisements with news, entertainment, and other content in digital media, referred to as “native advertising” or “sponsored content.” The FTC invites the public to submit original research, recommendations for topics of discussion, requests to participate as panelists, and mock-ups for discussion. The workshop will be at 601 New Jersey Avenue, N.W., Washington, D.C., is free, and is open to the public.

2D or not 2D

2D scanning

The FTC charged that a proposed merger between rivals Honeywell International Inc. and Intermec would reduce competition and lead to higher prices for scan engines. Scan engines are used in two-dimensional (2D) retail bar code scanners to translate an image – like a UPC barcode – into a digital format that a computer can read. The companies and a third competitor, Motorola, are the only 2D scan engine makers in the U.S. that have intellectual property portfolios broad enough to protect against potential patent-infringement lawsuits. The proposed FTC order requires Honeywell to license its technology, giving the buyer access to the patents it needs to enter the U.S. market immediately and restore competition.

Business flop-portunity

business flopportunity

At the FTC’s request, a federal court has stopped a business opportunity scheme that allegedly conned more than $6 million from people looking to buy a business. The FTC alleged that Money Now Funding LLC and its affiliates falsely promised people that they could earn up to $3,000 a month by referring merchants in their area to the defendants’ non-existent money-lending service. The court froze the defendants’ assets and appointed a receiver to take control of the operation, pending litigation.

                                

"No matter how debt collectors communicate with consumers – by mail, by phone, by text or some other way – they have to follow the law. The FTC has a zero tolerance policy for deception."

— Jessica Rich
Director of the FTC's Bureau of Consumer Protection

Discount these “discounts”

The FTC has moved to shut down a medical discount scheme that scammed seniors across the country by offering phony discounts on prescription drugs. The FTC’s complaint alleged that AFD Advisors, LLC, and its affiliates convinced people to turn over their bank account numbers and used that information to debit money from their accounts.

Show me the money

The FTC recently refunded money to consumers in cases involving a cramming scheme, a credit card operation that charged up-front fees for a “guaranteed” line of credit, a “free gas for life” scam, and a phony debt relief services scam.

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  • Did you get a call, email, or text to pay your utility bill via PayPal or a GreenDot card? Don’t – it’s probably a scam. http://go.usa.gov/DSMP
  • Learn more about a new twist on debt collection. http://go.usa.gov/DSMG
   

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