Category: FTC alert

What Is Lead Generation

Leave a comment

In marketing, lead generation (/ˈliːd/) is the initiation of consumer interest or enquiry PayDayLoaninto products or services of a business. The FTC say there are unscrupulous lead generator operators online.

April 12, 2019

By Lisa Lake
Consumer Education Specialist, FTC

You’ve probably shared your contact information online to, say, get details about a job opening. Usually, that’s fine. But sometimes you might be looking for one thing and wind up getting something else – like calls about stuff you never asked for or wanted.

Lead generators are companies that collect your contact information, then sell it to marketers who use it to promote their own products and services. While some lead generators are upfront about what they do with your information, others trick you into sharing it for their own profit – regardless of what you asked for.

The FTC sued Day Pacer, LLC for allegedly making unwanted calls as part of a scheme that used just this kind of bait-and-switch. According to the lawsuit, Day Pacer is a lead generator that got its leads from websites with convincing graphics and language to make people think they were in the right place to get what they needed. People went to these websites and shared their phone numbers to get help applying for jobs, health insurance, unemployment benefits and other assistance. But that’s not what they got. Instead, people got unwanted phone calls from Day Pacer with sales pitches to enroll in post-secondary and vocational schools operated by its clients. The company disturbed millions of people with these calls – even though their numbers were on the National Do Not Call Registry.

When you search online for jobs, benefits, or government assistance, you want to be sure you wind up where you need to be. So, once you have your search results:

  • Check out the URL before you click. Search online for that URL, plus the words “review” or “complaint.” Do the same thing with the company name, if you can find it. That will tell you what other people have experienced with that site.
  • Look for sites with “.gov” in the URL. Of course, there are many reliable, non-government, online sources. But government sites are the safest bet. So, for example:

And if you know someone who’s gone through this kind of bait-and-switch, report it to the FTC.

Advertisement

Tell Signs To Look Out For Before Buying A Car Online

Leave a comment
June 17, 2019

by Colleen TresslerPayDayLoan
Consumer Education Specialist, FTC

You can buy practically anything online, including used cars. But before you shell out any hard-earned cash, here’s a warning about scammers trying to sell cars they don’t have or own.

Here’s how the scam works:

Criminals post ads on online auction and sales websites, like eBay Motors, for inexpensive used cars (that they don’t really own).

They offer to chat online, share photos, and answer questions. They may even tell you the sale will go through a well-known retailer’s buyer protection program.

Recently, sellers have been sending fake invoices that appear to come from eBay Motors and demanding payment in eBay gift cards. If you call the number on the invoice, the scammer pretends to work for eBay Motors.

Trusting buyers have lost hundreds of thousands of dollars over the past year alone.

So how can you tell if an online car sale is fake?

  • You find bad reviews online. Check out the seller by searching online for the person’s name, phone number and email address, plus words like “review,” “complaint” or “scam.”
  • Sellers try to rush the sale. Resist the pressure. Scammers use high-pressure sales tactics to get you to buy without thinking things through.
  • They can’t or won’t meet in person or let you inspect the car. Scammers might have an excuse, like a job transfer, military deployment, or divorce, for why you can’t see them or the car. But experts agree that you should have an independent mechanic inspect a used car before you buy it.
  • They want you to pay with gift cards or by wire transfer. If anyone tells you to pay that way, it’s a scam. Every time.
  • The sellers demand more money after the sale for “shipping” or “transportation” costs.
  • The Vehicle Identification Number (VIN) doesn’t match the VIN for the car you’re interested in. A vehicle history report can help you spot such discrepancies.

For more tips, check out ftc.gov/usedcars and Online Auction Buyers. Want to avoid the latest rip-offs? Sign up for free consumer alerts from the FTC at ftc.gov/subscribe. If you spot a scam, report it at ftc.gov/complaint.

 

Tagged with: advertising, auctions, car, gift cards, imposter, online, payment, scam
Blog Topics: Money & Credit

FTC Shut Down Elegant Solutions, Inc. dba Mission Hills Federal – Student Loan Debt Operators

Leave a comment

FTC Stops Student Loan Debt Relief Scheme, Charges Operators with Misleading PayDayLoanConsumers
Federal Trade Commission, Plaintiff, v. Elegant Solutions, Inc., a corporation, also doing business as Federal Direct Group; Trend Capital Ltd., a corporation, also doing business as Mission Hills Federal; Dark Island Industries, Inc., a corporation, also doing business as Federal Direct Group and formerly known as Cosmopolitan Funding Inc.; Heritage Asset Management, Inc., a corporation, also doing business as National Secure Processing; Tribune Management, Inc., a corporation, also doing business as The Student Loan Group; Mazen Radwan, also known as Michael Radwan and Mike Radwan; Rima Radwan; and Dean Robbins, Defendants.

HERITAGE ASSET MANAGEMENT, INC., a corporation, also d/b/a National Secure Processing; TRIBUNE MANAGEMENT, INC., a corporation, also d/b/a The Student Loan Group; MAZEN RADWAN, a/k/a Michael Radwan and Mike Radwan, individually and as an officer of Elegant Solutions, Inc., Trend Capital Ltd., Dark Island Industries, Inc., Heritage Asset Management, Inc., and Tribune Management, Inc.; RIMA RADWAN, individually and as an officer of Elegant Solutions, Inc., Trend Capital Ltd., Dark Island Industries, Inc., Heritage Asset Management, Inc., and Tribune Management, Inc.; and DEAN ROBBINS, individually and as an officer of Elegant Solutions, Inc., Trend Capital Ltd., Dark Island Industries, Inc., Heritage Asset Management, Inc., and Tribune Management, Inc.

FTC Complaint

Operators allegedly bilked consumers out of more than $23 million

The Federal Trade Commission has stopped a student loan debt relief scheme, alleging it bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans. After the FTC filed a complaint seeking to end the deceptive practices, a federal court temporarily halted the scheme and froze its assets.

According to the FTC’s complaint, since at least 2014, the operators of Mission Hills Federal and Federal Direct Group have lured consumers into paying hundreds to thousands of dollars in illegal upfront fees with false promises to lower consumers’ monthly student loan payments. The defendants also allegedly tricked consumers into submitting their monthly student loan payments directly to the defendants by falsely claiming to take over servicing the consumers’ loans. In reality, the defendants either only applied minimal payments on consumers’ loans or, in many instances, applied none of the payments to the loans, diverting consumers’ payments to themselves.

“Debt relief companies can’t collect advance fees or masquerade as federal student loan servicers,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Anyone asking for upfront fees to help with student loan debt is likely a scammer, and consumers should hang up and alert the FTC.”

The Commission also alleged that the defendants obtained consumers’ student loan credentials, such as their FSA ID—a username and password used to log in to U.S. Department of Education websites—to log in and change consumers’ contact information, effectively hindering or entirely preventing consumers’ loan servicers from communicating with consumers. Many consumers went months or years before discovering that their student loans were not being repaid, according to the complaint.

The FTC has charged the following defendants with violating Section 5 of the FTC Act and the Telemarketing Sales Rule: Elegant Solutions, Inc. (also doing business as Federal Direct Group); Trend Capital Ltd. (also doing business as Mission Hills Federal); Dark Island Industries, Inc. (also doing business as Federal Direct Group and formerly known as Cosmopolitan Funding, Inc.); Heritage Asset Management, Inc. (also doing business as National Secure Processing); Tribune Management, Inc. (also doing business as The Student Loan Group); and three individual defendants, Mazen Radwan, Rima Radwan, and Dean Robbins.

How to Avoid Student Loan Debt Relief Scams

To help consumers avoid falling victim to such fraud, the FTC has consumer education related to student loan debt relief scams at ftc.gov/StudentLoans.

Only scammers promise fast loan forgiveness, and they often pretend to be affiliated with the government. Consumers should never pay an upfront fee for help, and should not share their FSA ID with anyone.

Consumers can apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost; these programs do not require the assistance of a third-party company or payment of application fees. For federal student loan repayment options, visit StudentAid.gov/repay. For private student loans, contact the loan servicer directly.

Repaying student loans? Avoid scams. Only scammers promise fast loan forgiveness. Never pay a fee up front for help. Scammers can fake a government seal. Don't share your FSA ID with anyone. Report scams to ftc.gov/complaint. Looking for free help? Start with studentaid.gov.

The Commission vote authorizing the staff to file the complaint was 5-0. The U.S. District Court for the Central District of California entered a temporary restraining order in the case on July 10, 2019.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

Contact Information

CONTACT FOR CONSUMERS:
Consumer Response Center
877-382-4357

MEDIA CONTACT:
Nicole Drayton
Office of Public Affairs
202-326-2565

STAFF CONTACT:
Michelle Grajales
Bureau of Consumer Protection
202-326-3172

 

Work-at-Home Scheme ~ Work At Home EDU Temporarily Halted By FTC

Leave a comment

Defendants falsely Promised Consumers They Could Earn Thousands of Dollars From Home

FOR RELEASE
August 17, 2017

At the Federal Trade Commission’s request, a federal court entered a temporary restraining order halting a deceptive work-at-home scheme. The defendants allegedly lured consumers into buying an online system, falsely promising that they would earn thousands of dollars in their spare time working from home.

According to the FTC, the defendants operated under various brand names, including Work At Home EDU, Work At Home Program, Work At Home Ecademy, Work At Home University, Work At Home Revenue and Work at Home Institute. They routinely claimed people could earn “hundreds of dollars per hour from home, without any special skills or experience.”

The defendants used online “native” advertising – promotional content that resembles the non-advertising material beside it – to reach consumers who were researching work-at-home opportunities on the internet. For example, they placed a link to their Work At Home EDU website near an article about working from home on the website Forbes.com.

Bobby J. Robinson, Michael Sirois, Bob Robinson LLC, Mega Export 2005 Inc., Mega Export USA Inc. and Netcore Solutions LLC are charged with violating the FTC Act and the FTC’s Business Opportunity Rule. The Rule requires business opportunity sellers to make certain disclosures to help consumers evaluate the opportunity, and prohibits such sellers from making earnings claims without adequate substantiation.

The Commission vote authorizing the staff to file the complaint was 2-0. The U.S. District Court for the Southern District of Texas, Houston Division, entered a temporary restraining order against the defendants on August 8, 2017. The FTC has requested the entry of a preliminary injunction that would halt the scheme until trial. An evidentiary hearing on the request is set for August 24, 2017.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics, including business opportunity scams and what you need to know before starting your own business, and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Small business owners can also learn more at ftc.gov/SmallBusiness. Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogsand subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT:
Frank Dorman(link sends e-mail)
Office of Public Affairs
202-326-2674

STAFF CONTACT:
Roberto Anguizola
Bureau of Consumer Protection
202-326-3284

FTC Charges Online Marketing Scheme with Deceiving Shoppers

Leave a comment
FTC@100 Banner
FTC Charges Online Marketing Scheme with Deceiving Shoppers

One-time “trial” offer for tooth whitener led to recurring $200 monthly charges

The Federal Trade Commission has charged an online marketing operation with deceptively luring people into an expensive negative option scam using an initial low-cost ($1.03, plus shipping and handling) “trial” offer for tooth whiteners and other products.

Inside a low-cost trial scam link to infographic
Click to view infographic about low-cost trial scams.

A federal court temporarily halted the operation and froze its assets at the request of the FTC, which seeks to end the practices.

According to the FTC, the defendants used a network of 78 companies, at least 87 websites, and dozens of bank accounts to hide their ownership and launder the profits from the scheme. They also drove people to their websites via affiliate networks that generate web traffic with blog posts, banner ads and surveys. For example, some consumers got emails inviting them to fill out surveys falsely claiming to be for well-known merchants such as Kohl’s and Amazon, and were directed to the defendants’ websites to claim a “reward” for completing the survey.

The FTC alleges that, using deceptive claims, hidden fine-print disclosures and confusing terms, the defendants tricked consumers into providing their billing information, and then started charging them about $100 a month unless consumers canceled within 8 days. They also used an order confirmation page to trick consumers into signing up for a second monthly subscription, which cost an additional $100, for an identical product. Because of this double-deception, the defendants charged consumers, who reasonably believed they had agreed to a single shipment for $1.03 plus shipping costs, about $200 a month until they canceled both unauthorized subscriptions.

The defendants are charged with violating the FTC Act and the Restore Online Shoppers’ Confidence Act.

The defendants are Blair McNea, Danielle Foss, Jennifer Johnson, Boulder Creek Internet Solutions Inc., Walnut Street Marketing Inc., and these LLCs: Anasazi Management Partners, RevMountain, Wave Rock, Juniper Solutions, Jasper Woods, Wheeler Peak Marketing, ROIRunner, Cherry Blitz, Flat Iron Avenue, Absolutely Working, Three Lakes, Bridge Ford, How and Why, Spruce River, TrimXT, Elation White, IvoryPro, Doing What’s Possible, RevGuard, RevLive!, Blue Rocket Brands, Convertis, Convertis Marketing, Turtle Mountains, Boulder Black Diamond, Mint House, Thunder Avenue, University & Folsom, Snow Sale, Brand Force, Wild Farms, Salamonie River, Indigo Systems, Night Watch Group, Newport Crossing, Greenville Creek, Brookville Lane, Honey Lake, Condor Canyon, Brass Triangle, Solid Ice, Sandstone Beach, Desert Gecko, Blizzardwhite, Action Pro White, First Class Whitening, Spark Whitening, Titanwhite, Dental Pro At Home, Smile Pro Direct, Circle of Youth Skincare, DermaGlam, Sedona Beauty Secrets, Bella at Home, SkinnyIQ, Body Tropical, and RoadRunner B2C LLC, also doing business as RevGo.

The Commission vote authorizing the staff to file the complaint was 2-0. The U.S. District Court for the District of Nevada entered a temporary restraining order against the defendants on July 25, 2017.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674

STAFF CONTACT:
Sarah Waldrop
Bureau of Consumer Protection
202-326-3444

More news from the FTC >>

FTC Charges Education Lead Generator with Tricking Job Seekers by Claiming to Represent Hiring Employers

1 Comment

Settlement Bans Operators of Gigats.com from Deceptive Lead Generation Tactics

In the agency’s first enforcement action against an education lead generator, operators of Gigats.com have agreed to settle Federal Trade Commission charges that the company claimed it was “pre-screening” job applicants for hiring employers when it was actually gathering information for other purposes, including lead generation for post-secondary schools and career training programs.

According to the FTC’s complaint, the operators of Gigats.com gathered online job announcements posted by multinational companies, government agencies and other employers, and summarized them on its website, which appeared to accept applications for the jobs. Many of the job openings were not current, and for those that were, the employers had not authorized Gigats to collect applications or screen or interview applicants. In addition, the defendants never sent the information they collected from consumers to the employers.

Instead, the FTC alleges, consumers, who had provided Gigats with the kinds of personal information typically requested in a job application, were directed to call the defendants’ “employment specialists,” who then steered the consumers toward enrolling in education programs that had paid the defendants for consumer leads. Many consumers also were transferred to the defendants’ “education advisors.” The FTC alleges that these so-called advisors falsely claimed to be independent education advisors but in fact only recommended schools and programs that had agreed to pay the defendants, typically from $22 to $125, for consumer leads that met their enrollment requirements.

Under a proposed stipulated court order, the defendants are prohibited from making misrepresentations like those described in the complaint, and promoting job openings without a reasonable basis to expect that employers are currently hiring for those jobs. They also are barred from transferring consumers’ personal information to third parties without clearly disclosing that it will be transferred, and their relationship with the third party. In addition, the defendants are prohibited from using the information covered under the order unless consumers affirmatively opt in to their services.

The proposed court order imposes a $90.2 million judgment that will be suspended upon payment of $360,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The defendants are Expand Inc., also doing business as Gigats, EducationMatch and SoftRock Inc., and Ayman A. Difrawi, also known as Alec Difrawi and Ayman El-Difrawi.

The Commission vote authorizing the staff to file the complaint and proposed stipulated court order was 3-0. The proposed order has been submitted to the U.S. District Court for the Middle District of Florida.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674

STAFF CONTACT:
Brian Shull
Bureau of Consumer Protection
202-326-3720

Daniel Dwyer
Bureau of Consumer Protection
202-326-2957

screencapture-ftc-gov-news-events-press-releases-2016-04-ftc-charges-education-lead-generator-tricking-job-seekers-1503929367637

FTC and Florida Charge Tech Support Operation with Bogus Services

Leave a comment

The FTC and State of Florida have taken action against defendants who ran an international tech support operation and allegedly misrepresented to consumers that malware or hackers had compromised their computers and that the operation was associated with or certified by Microsoft and Apple to fix their computers. A federal court has temporarily shut down the defendants’ operation, frozen their assets, and placed control of the businesses with a court-appointed receiver.

The complaint alleges that defendants, based in Florida, Iowa, Nevada, and Canada, relied on a combination of deceptive online ads and misleading, high-pressure sales tactics to frighten consumers into spending hundreds of dollars for dubious computer “repairs” and antivirus software.

“Scammers like these use incredibly deceptive tactics that make consumers think they are receiving warnings from legitimate technology companies,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “We are proud to work with the Florida Attorney General’s Office to put an end to these fraudulent practices.”

According to the complaint, the defendants caused consumers’ computers to display advertisements designed to resemble security alerts from Microsoft or Apple.  These ads warned consumers that their computers could be infected with malware and urged them to call a toll-free number in the ad to safeguard both their computer and sensitive personal information stored on it.

According to the complaint, consumers who called the numbers in these ads were routed to the defendants’ call center in Boynton Beach, Fla., where telemarketers purported to run a series of “diagnostics” that inevitably discovered the existence of grave problems that must be immediately fixed at a cost of $200 to $300 by one of the defendants’ “certified” technicians. The defendants also frequently told consumers that they needed to spend an additional $200 to $500 to replace their existing antivirus software, which the defendants always claimed was outdated and ineffective.  The complaint notes that consumers can acquire this software for a fraction of the cost charged by the defendants.  In many instances, the software sold by the defendants to consumers with Apple computers is available as a free download.

The defendants in the case are BigDog Solutions LLC (doing business as Help Desk National and Help Desk Global); PC Help Desk US LLC (doing business as Help Desk National and Help Desk Global); Inbound Call Specialist LLC; BlackOpteck CE Inc.; 9138242 Canada Corporation; Digital Growth Properties, LLC; Christopher J. Costanza (doing business as CJM Consulting, LLC); Suzanne W. Harris; Muzaffar Abbas; Gary Oberman; Donald Dolphin and Justin Powers.

The defendants are charged with violations of the FTC Act, the Telemarketing Sales Rule, and the Florida Unfair and Deceptive Trade Practices Act. The FTC and State of Florida are seeking to permanently stop the alleged illegal practices and obtain refunds for the victimized businesses.

The FTC has taken numerous law enforcement actions against tech support operations since 2010, shutting down the scams and collecting substantial consumer redress. The FTC has extensive consumer education materials about tech support scams, including a new video.

The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois.  The court entered the temporary restraining order on June 28, 2016.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

PRESS RELEASE REFERENCE:
FTC and Federal, State and International Partners Announce Major Crackdown on Tech Support Scams

CONTACT INFORMATION

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs
202-326-2181

STAFF CONTACT:
Jim Davis
FTC Midwest Region
312-960-5611

Matthew Wernz
FTC Midwest Region
312-960-5596

FTC Files Charges Against Independent Sales Organization and Sales Agents

Leave a comment

Defendants Laundered Transactions for ‘Money Now Funding’ Scheme

The Federal Trade Commission has charged 12 defendants with laundering millions of dollars in credit card charges through fraudulent merchant accounts. According to the complaint filed by the FTC, the defendants arranged for a deceptive operation known as Money Now Funding (MNF) to obtain and maintain merchant accounts that allowed it to process almost $6 million through the credit card networks.

In September 2013, the FTC charged MNF with running a deceptive business opportunity scheme that promised consumers they would make thousands of dollars helping small businesses get loans. The court in the MNF matter determined that MNF’s promises were false.

Today’s case alleges that the defendants – an Independent Sales Organization (ISO), sales agents, and their principals – provided the MNF scheme access to the credit card networks  by submitting and approving fraudulent applications in the names of more than 40 fictitious MNF companies. According to the FTC’s complaint, the defendants did so despite obvious signs that the companies were likely fictitious and being used to conceal the true identity of the underlying merchant. By processing the fraudulent MNF scheme’s transactions through merchant accounts opened in the names of fictitious companies, the ISO defendants allegedly also evaded the anti-fraud monitoring efforts of the credit card networks.

In the case announced today, the defendants are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule.

The ISO defendants are Electronic Payment Systems LLC, Electronic Payment Transfer LLC, John Dorsey, Thomas McCann and Michael Peterson. The sales agent defendants are Electronic Payment Solutions of America Inc., Electronic Payment Services Inc., KMA Merchant Services LLC, Dynasty Merchants LLC, Jay Wigdore, Michael Abdelmesseh, also known as Michael Stewart, and Nikolas Mihilli.

The Commission vote authorizing the staff to file the complaint was 2-0. It was filed in the U.S. District Court for the District of Arizona.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

 

FTC Charges Online Marketing Scheme with Deceiving Shoppers

Leave a comment

One-time “trial” offer for tooth whitener led to recurring $200 monthly charges

The Federal Trade Commission has charged an online marketing operation with deceptively luring people into an expensive negative option scam using an initial low-cost ($1.03, plus shipping and handling) “trial” offer for tooth whiteners and other products.

A federal court temporarily halted the operation and froze its assets at the request of the FTC, which seeks to end the practices.

According to the FTC, the defendants used a network of 78 companies, at least 87 websites, and dozens of bank accounts to hide their ownership and launder the profits from the scheme. They also drove people to their websites via affiliate networks that generate web traffic with blog posts, banner ads and surveys. For example, some consumers got emails inviting them to fill out surveys falsely claiming to be for well-known merchants such as Kohl’s and Amazon, and were directed to the defendants’ websites to claim a “reward” for completing the survey.

The FTC alleges that, using deceptive claims, hidden fine-print disclosures and confusing terms, the defendants tricked consumers into providing their billing information, and then started charging them about $100 a month unless consumers canceled within 8 days. They also used an order confirmation page to trick consumers into signing up for a second monthly subscription, which cost an additional $100, for an identical product. Because of this double-deception, the defendants charged consumers, who reasonably believed they had agreed to a single shipment for $1.03 plus shipping costs, about $200 a month until they canceled both unauthorized subscriptions.

The defendants are charged with violating the FTC Act and the Restore Online Shoppers’ Confidence Act.

The defendants are Blair McNea, Danielle Foss, Jennifer Johnson, Boulder Creek Internet Solutions Inc., Walnut Street Marketing Inc., and these LLCs: Anasazi Management Partners, RevMountain, Wave Rock, Juniper Solutions, Jasper Woods, Wheeler Peak Marketing, ROIRunner, Cherry Blitz, Flat Iron Avenue, Absolutely Working, Three Lakes, Bridge Ford, How and Why, Spruce River, TrimXT, Elation White, IvoryPro, Doing What’s Possible, RevGuard, RevLive!, Blue Rocket Brands, Convertis, Convertis Marketing, Turtle Mountains, Boulder Black Diamond, Mint House, Thunder Avenue, University & Folsom, Snow Sale, Brand Force, Wild Farms, Salamonie River, Indigo Systems, Night Watch Group, Newport Crossing, Greenville Creek, Brookville Lane, Honey Lake, Condor Canyon, Brass Triangle, Solid Ice, Sandstone Beach, Desert Gecko, Blizzardwhite, Action Pro White, First Class Whitening, Spark Whitening, Titanwhite, Dental Pro At Home, Smile Pro Direct, Circle of Youth Skincare, DermaGlam, Sedona Beauty Secrets, Bella at Home, SkinnyIQ, Body Tropical, and RoadRunner B2C LLC, also doing business as RevGo.

The Commission vote authorizing the staff to file the complaint was 2-0. The U.S. District Court for the District of Nevada entered a temporary restraining order against the defendants on July 25, 2017.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT:
Frank Dorman(link sends e-mail)
Office of Public Affairs
202-326-2674

STAFF CONTACT:
Sarah Waldrop
Bureau of Consumer Protection
202-326-3444

FTC Takedown Revenge Porn Operator

Leave a comment

We at scamFRAUDalert applaud the FTC in its action against the operator (Kevin Bolleart) of the website “Revenge Porn.” These individuals are just a nuisance to us all. Similar operator of the websites potentialpredators.com, predatorswatch.com potentialprostitute.com, wikiwarnings.com and wikiprobe.org and his co-conspirators are still out there. They must be track and prosecuted.

Website Operator Banned from the ‘Revenge Porn’ Business After FTC Charges He Unfairly Posted Nude Photos
Craig Brittain Allegedly Deceived Women on Craigslist, Offered Fake ‘Takedown’ Service

FOR RELEASE
January 29, 2015

The operator of an alleged “revenge porn” website is banned from publicly sharing any more nude videos or photographs of people without their affirmative express consent, under a settlement with the Federal Trade Commission. In addition, he will have to destroy the intimate images and personal contact information he collected while operating the site.

The FTC’s complaint against Craig Brittain alleges that he used deception to acquire and post intimate images of women, then referred them to another website he controlled, where they were told they could have the pictures removed if they paid hundreds of dollars.

“This behavior is not only illegal but reprehensible,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “I am pleased that as a result of this settlement, the illegally collected images and information will be deleted, and this individual can never return to the so-called ‘revenge porn’ business.”

According to the FTC’s complaint, Brittain acquired the images in a number of ways, such as by posing as a woman on the advertising site Craigslist, and offering nude photos purportedly of himself in exchange for photos provided by women. When women provided him with the photos, Brittain posted them on his site without their knowledge or permission.

In addition to collecting and posting the images himself, Brittain solicited viewers of his site to anonymously submit nude photos of people to his site, according to the complaint. He required submissions to include sensitive personal information about the people in the photos, including their full name, town and state, phone number and Facebook profile.

The complaint also alleged that Brittain offered a “bounty system” on his site, wherein users could offer a reward of at least $100 in exchange for other users finding pictures and information about a specific person. Overall, Brittain’s site included photos of more than 1,000 individuals, according to the complaint.

Women whose photographs and information were posted on the site contacted Brittain to have the information removed, citing the potential harms to their careers and reputations. In addition, women cited unwelcome contact from strangers who had discovered their information on Brittain’s site. The complaint notes that in many cases Brittain did not respond to the women’s requests to remove the information.

In fact, the complaint alleges that Brittain’s site advertised content removal services under the name “Takedown Hammer” and “Takedown Lawyer” that could delete consumers’ images and content from the site in exchange for a payment of $200 to $500. Despite presenting these as third-party services, the complaint alleges that the sites for these services were owned and operated by Brittain.

Under the terms of the settlement, Brittain is required to permanently delete all of the images and other personal information he received during the time he operated the site. He will also be prohibited from publicly sharing intimate videos or photographs of people without their affirmative express consent, as well as being prohibited from misrepresenting how he will use any personal information he collects online.

The Commission vote to accept the the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through March 2, 2015, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION
MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs
202-326-2181

STAFF CONTACT:
Melinda Claybaugh
Bureau of Consumer Protection
202-326-2203

Related – FTC Actions

LeapLab – FTC Charges With Facilitating Theft

Leave a comment

FTC Charges Data Broker with Facilitating the Theft of Millions of Dollars from Consumers’ Accounts

Company Sold Personal Financial Information to Scammers

FOR RELEASE

December 23, 2014

A data broker operation sold the sensitive personal information of hundreds of thousands of consumers – including Social Security and bank account numbers – to scammers who allegedly debited millions from their accounts, the Federal Trade Commission charged in a complaint filed today.

According to the FTC’s complaint, data broker LeapLab bought payday loan applications of financially strapped consumers, and then sold that information to marketers whom it knew had no legitimate need for it. At least one of those marketers, Ideal Financial Solutions – a defendant in another FTC case – allegedly used the information to withdraw millions of dollars from consumers’ accounts without their authorization.

“This case shows that the illegitimate use of sensitive financial information causes real harm to consumers,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Defendants like those in this case harm consumers twice: first by facilitating the theft of their money and second by undermining consumers’ confidence about providing their personal information to legitimate lenders.”

The defendants collected hundreds of thousands of payday loan applications from payday loan websites known as publishers. Publishers typically offer to help consumers obtain payday loans. To do so, they ask for consumers’ sensitive financial information to evaluate their loan applications and transfer funds to their bank accounts if the loan is approved. These applications, including those bought and sold by LeapLab, contained the consumer’s name, address, phone number, employer, Social Security number, and bank account number, including the bank routing number.

The defendants sold approximately five percent of these loan applications to online lenders, who paid them between $10 and $150 per lead. According to the FTC’s complaint however, the defendants sold the remaining 95 percent for approximately $0.50 each to third parties who were not online lenders and had no legitimate need for this financial information.

The Commission’s complaint alleges that these non-lender third parties included: marketers that made unsolicited sales offers to consumers via email, text message, or telephone call; data brokers that aggregated and then resold consumer information; and phony internet merchants like Ideal Financial Solutions. According to the FTC’s complaint, the defendants had reason to believe these marketers had no legitimate need for the sensitive information they were selling.

In the FTC’s case against Ideal Financial Solutions, between 2009 and 2013, Ideal Financial allegedly purchased information on at least 2.2 million consumers from data brokers and used it to make millions of dollars in unauthorized debits and charges for purported financial products that the consumers never purchased. LeapLab provided account information for at least 16 percent these victims.

The complaint notes that LeapLab hired a key executive from Ideal Financial as its own Chief Marketing Officer and then knew that Ideal used the information purchased from it to make unauthorized debits. Yet, the complaint alleges, the defendants continued to sell such information to Ideal.

The defendants in the case, Sitesearch Corp., LeapLab LLC; Leads Company LLC; and John Ayers, are alleged to have violated the FTC Act’s prohibition on unfair practices.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Arizona, Phoenix Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs
202-326-2181

STAFF CONTACT:
James Kohm
Bureau of Consumer Protection
202-326-2640

Phony Payday Loan Brokers Settle FTC Charges

3 Comments

Defendants Will Be Banned From Credit-Related Businesses and Surrender Rolls Royce, Ferrari, and Other Assets

FOR RELEASE

July 11, 2014

The operators of a Tampa, Florida-based payday loan broker scheme have agreed to settle Federal Trade Commission charges that they falsely promised to help consumers get loans, but instead used consumers’ personal financial data to take money from their bank accounts without their consent.

Claiming to be affiliated with a network of 120 potential payday lenders, defendants Sean C. Mulrooney and Odafe Stephen Ogaga, and five companies they controlled, misrepresented that 80 percent of all applicants got loans within an hour, according to the FTC’s complaint. In reality, the defendants did not lend money to consumers, and there is no evidence that they helped anyone in obtaining a loan.

According to the complaint, the defendants used consumers’ personal financial information it had collected through its websites to withdraw $30 from the bank accounts of tens of thousands of consumers, without authorization and without providing anything of value in return.

“These defendants deceived consumers to get their sensitive financial data and used it to take their money,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue putting a stop to these kinds of illegal practices.”

The proposed settlement bans the defendants from:

  • marketing or providing any credit-related products or services, including loans, prepaid credit cards, debt-relief services, and credit repair services;
  • collecting, selling, or buying consumers’ personal and financial information, except in order to process a specifically authorized transaction; and
  • processing transactions using remotely created checks or remotely created payment orders.

The settlement imposes a $6.2 million judgment, which is equal to the defendants’ ill-gotten gains. The settlement requires Ogaga to surrender nearly all his assets: $50,000 in cash, and proceeds from the sale of his 2011 Rolls Royce Ghost, 2007 Lexus LS460, and 2006 Ferrari. Once he surrenders these assets, the remainder of the judgment against Ogaga will be suspended. The judgment against Mulrooney is entirely suspended, due to his inability to pay.

Also under the settlement, the defendants are prohibited from misrepresenting the terms and conditions of any service or product they market, and from charging consumers for anything without their consent. The settlement also requires the defendants to dispose of customer information that they have already collected and not to use, disclose, or benefit from, and it.

For more consumer information on this topic, see Online Payday Loans.

In addition to Mulrooney and Ogaga, the complaint named Caprice Marketing LLC; NuVue Partners LLC; Capital Advance LLC; Loan Assistance Company LLC; and ILife Funding, LLC, formerly known as Guaranteed Funding Partners LLC.

The Commission vote approving the proposed stipulated final order was 5-0. The FTC filed the order in the U.S. District Court for the Northern District of Illinois, and the court entered it on July 1, 2014.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

PRESS RELEASE REFERENCE:
At the FTC’s Request, Court Halts Alleged Phony Payday Loan Broker

CONTACT INFORMATION

MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs
202-326-3707

STAFF CONTACTS:
James Davis and Elizabeth Scott
FTC Midwest Region
312-960-5611 or 312-960-5609

FTC Moves Against Scambook, Inc Owners

Leave a comment

FTC Moves Against Massive Mobile Cramming Operation That Heaped Millions in Unwanted Charges on Consumers’ Bills

Defendants Pitched ‘Love Tips,’ ‘Fun Facts,’ and Free Justin Bieber Tickets

For Release

December 16, 2013

The Federal Trade Commission is taking action to stop a mobile phone cramming operation that has placed tens of millions of dollars on consumers’ mobile phone bills without their permission. In its complaint, the FTC seeks to shut down the operation and recover money lost by consumers.

The FTC’s complaint charges that Lin Miao and Andrew Bachman, through a number of companies they owned and controlled, pitched “love tips,” “fun facts,” and celebrity gossip alerts sent by text message to consumers, but placed monthly subscription fees for these “services” on consumers’ mobile phone bills without their authorization. The practice, known as mobile cramming, relies on the fact that consumers often don’t closely examine their monthly statements, or many assume that charges are legitimate.

“This case puts another dent in the armor of scammers who use mobile cramming to take advantage of consumers across the country,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

“The FTC will continue working to protect consumers from unwanted third-party charges on their mobile phone bills.”

According to the complaint, consumers allegedly received text messages with random factoids that they dismissed as spam without realizing they had received them through a paid subscription service they did not knowingly buy. The defendants also allegedly used misleading website offers to obtain valid consumer phone numbers that they used to sign up consumers for their services without their knowledge.

In one instance, a website told visitors they had won free Justin Bieber tickets, which they could claim by filling out an online quiz. Part of the process required consumers to enter their phone number, and while consumers didn’t receive the Justin Bieber tickets, their phone numbers were likely signed up for one of the defendants’ paid services.

The charges continued to appear on consumers’ bills until the consumers noticed them and took action to unsubscribe. The charges, typically $9.99 per month, often appeared on consumers’ bills with inscrutable names like “77050IQ12CALL8663611606” and “25184USBFIQMIG” and in many instances, consumers did not notice the variations in the amount of their bills from month to month.

When consumers did notice the charges, the process of getting a refund was often highly cumbersome. In some cases, consumers could reach representatives of the company, who would promise refunds that never arrived. In other cases, consumers were able to get partial refunds from their phone company, but only for a limited number of months – sometimes far less than the length of time they were billed. The number of consumers seeking refunds from their phone companies was as high as 40 percent in some months, and some carriers suspended the defendants from placing charges on consumers’ bills.

The FTC’s complaint alleges that the defendants violated the FTC Act by deceiving consumers, leading them to believe they were obligated to pay for the defendants’ premium text message services. The defendants also violated the FTC Act by unfairly billing consumers for services they did not ask for.

The defendants in the case are Tatto, Inc. (also doing business as WinBigBidLow and Tatto Media)

  1. Bullroarer, Inc. (also doing business as Bullroarer Corporation Pty. Ltd.)
  2. Shaboom Media, LLC (also doing business as Tatto Media);
  3. Bune, LLC
  4. Mobile Media Products, LLC
  5. Chairman Ventures, LLC
  6. Galactic Media, LLC
  7. Virtus Media, LLC
  8. Lin Miao and Andrew Bachman

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Central District of California on Dec. 4, 2013, and a temporary restraining order with an asset freeze was granted against the defendants on Dec. 5, 2013.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:

Jay Mayfield
Office of Public Affairs
202-326-2181

STAFF CONTACT:

Heather Allen
Bureau of Consumer Protection
202-326-3224

Related Article:

 

Lucas Law Center , Inc.

Leave a comment

scamFRAUDalert see it appropriate to issue this ALERT and warn consumer to consumer alertexercise care and caution when transacting business with the Lucas Law Center dba Future Financial Services, LLC.

The FTC had filed a complaint against this outfit and complaints online seems to validate the FTC. The firm is address is below.

Lucas Law center
65 Enterprise Suite 450
Aliso Viejo, California USA


California Law Cal. Civ. Code § 2944.7(a) (2009), Cal. Bus. & Prof. Code § 10085.6(a) (2009 expressly prohibits the collection of fees before service is completed.
http://www.dre.ca.gov/Consumers/AdvanceFees.html

Prohibited claims

The Mortgage Assistance Relief Services Rule (MARS Rule) prohibits mortgage relief companies from making any false or misleading claims about their services; it states:

  • It’s illegal to charge upfront fees. You can’t collect money from a customer unless you deliver – and the customer agrees to – a written offer of mortgage relief from the customer’s lender or servicer.
  • You must clearly and prominently disclose certain information before you sign people up for your services. You must tell them upfront key information about your services, including:
    • the total cost,
    • that they can stop using your services at any time,
    • that you’re not associated with the government or their lender, and
    • that their lender may not agree to change the terms of their mortgage.
  • If you advise someone not to pay his or her mortgage, you must clearly and prominently disclose the negative consequences that could result. You must warn customers that failure to pay could result in the loss of their home or damage to their credit rating.
  • Don’t advise customers to stop communicating with their lender or servicer. Under the Rule, it’s illegal to tell people they shouldn’t communicate with their lender or servicer.
  • You must disclose key information to your customer if you forward an offer of mortgage relief from a lender or servicer. You must give your customer a written notice from the lender or servicer describing all material differences between the terms of the offer and the customer’s current loan. You also have to tell your customer that if the lender or servicer’s offer isn’t acceptable to them, they don’t have to pay your fee.
  • Don’t misrepresent your services. Under the Rule, it’s illegal to make claims that are false, misleading, or unsubstantiated.

including claims about:

  • the likelihood of consumers getting the results they seek;
  • the company’s affiliation with government or private entities;
  • the consumer’s payment and other mortgage obligations;
  • the company’s refund and cancellation policies;
  • whether the company has performed the services it promised;
  • whether the company will provide legal representation to consumers;
  • the availability or cost of any alternative to for-profit mortgage assistance relief services;
  • the amount of money a consumer will save by using their services; or
  • the cost of the services.

In addition, the rule bars mortgage relief companies from telling consumers to stop communicating with their lenders or servicers. Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.

_________________________________

Federal and State Agencies Target Mortgage Foreclosure Rescue and Loan Modification Scams

FTC Leads Operation Loan Lies to Stop Fraud and Help Distressed Homeowners
For Release

July 15, 2009

Tags:

Federal Trade Commission Chairman Jon Leibowitz, joined by California Attorney General Jerry Brown, today announced Operation Loan Lies, a coordinated national law enforcement effort to crack down on mortgage modification scams. The operation involves 189 actions by 25 federal and state agencies against defendants who deceptively marketed foreclosure rescue and mortgage modification services. The FTC actions, which affect consumers throughout the nation, are being announced in southern California, where the scams originated.

“These con artists see the high foreclosure rates as an opportunity to prey on people in distress,” FTC Chairman Jon Leibowitz said. “They promise to rescue homeowners in troubled financial waters, but after they take their money they throw them an anchor instead of a lifeline. People facing foreclosure should avoid any company or individual that requires a fee in advance, guarantees to stop a foreclosure or modify a loan, or advises the homeowner to stop paying the mortgage company.”

The FTC announced four lawsuits, bringing to 14 the number of mortgage foreclosure rescue and loan modification scam cases the Commission has brought since April. Twenty-three state attorneys general and other agencies are participating in the operation, taking action against 178 companies engaged in these types of deception. The FTC also announced a settlement in a lawsuit filed last November.

The FTC charged that the defendants falsely claimed that they would either obtain a mortgage loan modification or stop foreclosure, or both, and that some of the defendants falsely represented that they would give consumers refunds if they failed to do so. After charging consumers the equivalent of one month’s mortgage payment or more in advance, these companies often did little or nothing to help homeowners renegotiate their mortgages or stop foreclosure. After failing to provide the promised services, the defendants that promised refunds did not honor those promises. In each case the FTC is asking the court for consumer redress and a permanent bar on the deceptive practices. The FTC would like to thank the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury and the Special Inspector General of the Troubled Asset Relief Program (SIG-TARP) for their invaluable assistance in these cases.

The FTC also released “Real People. Real Stories,” a three-and-a-half minute video about keeping your home. It features people targeted by foreclosure rescue scammers sharing lessons learned from their experiences. The FTC is distributing the video, and a version in Spanish, to more than 5,000 housing counseling and consumer protection organizations around the country, and posting them at FTC.gov/yourhome and YouTube.com/FTCVideos.

The FTC and the states of California and Missouri charged that US Foreclosure Relief falsely claimed years of experience and a high success rate and promised quick results. Instead, homeowners paid the defendants thousands of dollars for services they never received. The FTC also charged the defendants with violating the FTC’s Do Not Call Rule by calling consumers on the National Do Not Call Registry, and California and Missouri charged them with violating state laws that prohibit charging advance fees for foreclosure consulting services. The court immediately barred the practices and froze the defendants’ assets, pending a hearing.

Lucas Law Center allegedly used an attorney to circumvent state prohibitions against receiving a fee before providing any services; the defendants charged up to $3,995 in advance. In addition to falsely representing that they would obtain mortgage loan modifications, the defendants told some homeowners to stop paying their mortgage in order to pay the defendants’ fee. Consumers obtained promised refunds only after repeated complaints to the Better Business Bureau, the California Attorney General, the State Bar of California, or local criminal authorities. The court immediately barred the practices and froze the corporate defendants’ assets, pending a hearing.

Loss Mitigation Services marketed primarily through direct mail solicitation. The defendants allegedly targeted consumers whose mortgage payments have increased, who have made late payments, and whose homes were in foreclosure. They charged up to $5,500 in advance and promised that a loan modification was assured or virtually assured if consumers hired them. The defendants also misrepresented that they were a department of, or affiliated with, the consumer’s lender or mortgage servicer. In many cases, they failed to obtain loan modifications for consumers, some of whom lost their homes while waiting for the promised results.

The FTC alleged that Internet company Apply2Save charged consumers up-front fees of up to $995, claiming they could obtain a loan modification in 30 to 90 days. In fact, they did not obtain loan modifications for most consumers and were unable to stop foreclosures. In most cases, the defendants failed to contact or follow-up with consumers’ lenders. Consumers waited months with no action on their loans, while the defendants lied and told them that the lenders had lost their papers. The defendants have agreed to a court order barring further unlawful practices, pending trial.

In addition to these cases, the FTC reached a settlement with Foreclosure Solutions, LLC andTimothy Buckley, who claimed that, for a fee often exceeding $1,000, they would stop foreclosure (see press release dated April 29, 2008). Many consumers who paid the fee ultimately lost their homes, and others avoided foreclosure only through their own efforts. The settlement order prohibits the defendants from misrepresenting that any foreclosure can or will be stopped, postponed, or prevented, or the likelihood that these results will be obtained; the degree of past success of any efforts to achieve these results; the likelihood that a consumer will receive a full or partial refund if these results are not obtained; an ability to help all consumers, regardless of their individual circumstances; the number of satisfied customers or customer complaints; the terms of any refund or guarantee; and any other fact material to a consumer’s decision to purchase a foreclosure rescue service.

The order also bars the defendants from misrepresenting material facts in the sale of any good or service. In addition, the defendants are prohibited from selling or otherwise disclosing personal information about anyone who provided them with personal information. The order imposes an $8.5 million judgment that will be suspended upon turnover of approximately $5,000 in cash and other property, including the surrender of any net proceeds from the sale of five houses. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. The order also contains record-keeping and reporting provisions to allow the FTC to monitor compliance.

Operation Loan Lies follows an April 6, 2009, announcement by FTC Chairman Leibowitz, Attorney General Eric Holder, Treasury Secretary Timothy Geithner, Housing and Urban Development Secretary Shaun Donovan, and Illinois Attorney General Lisa Madigan that they would step up enforcement efforts against those who prey on homeowners in distress. Since then, when the FTC announced five similar foreclosure rescue law enforcement actions, the Commission has brought five more cases:

  • FTC v. Sean Cantkier, Scot Lady, Jeffrey Altmire, Michael Haller, Lisa Roye, Alan LeStourgeon, Kean Lee Lim, Greg Rivera, and Neil Sperry,/opa/2009/05/mortgageads.shtm
  • FTC v. Dinamica Financiera LLC, Soluciones Dinamicas, Inc., Valentin Benitez, Jose Mario Esquer, and Rosa Esquer, /opa/2009/05/mortgagerescue.shtm
  • FTC v. Brian D’Antonio; The Rodis Law Group, Inc.; American’s Law Group; and The Financial Group, Inc., /opa/2009/06/medicalcapital.shtm
  • FTC v. Freedom Foreclosure Prevention Specialists, LLC; Loss Mitigation Training Centers of America, LLC; Jeffrey C. Segal; and Michael R. Workman,/opa/2009/06/freedom.shtm
  • FTC v. Federal Loan Modification Law Center, LLP; Anz & Associates, PLC, Venture Legal Support, PLC; LegalTurn, Inc. (a/k/a Legal Turn, Inc.); Federal Loan Modification, LLC; Federal Loan Modifications; SBSC Corporation; Nabile “Bill” Anz; Boaz Minitzer; Jeffrey Broughton; and Steven Oscherowitz,/opa/2009/06/fedloanmod.shtm

In the four FTC cases announced today, the Commission vote to issue each complaint was 4-0. US Foreclosure Relief, Lucas Law Center, and Loss Mitigation Services were filed in the U.S. District Court for the Central District of California. Apply2Save was filed in the U.S. District Court for the District of Idaho; the FTC acknowledges the assistance of the State of Idaho Attorney General’s Office.

These cases named the following defendants:

US Foreclosure Relief used eight aliases – U.S. Foreclosure Relief, Lighthouse Services, Pacific Shore Financial, California Foreclosure Specialists, H.E. Service Company, Safe Harbor, Pomery & Associates, and Homeowners Legal Assistance. Other defendants are George Escalante, Cesar Lopez, and Adrian Pomery, Esq.

Apply2Save – Apply2Save, Inc., Sleeping Giant Media Works, Inc., and Derek Oberholtzer.

Lucas Law Center – LUCASLAWCENTER “INCORPORATED,” Future Financial Services, LLC, Paul Jeffrey Lucas, Christopher Francis Betts, and Frank Sullivan.

Loss Mitigation Services – Loss Mitigation Services, Inc., Synergy Financial Management Corporation (d/b/a Direct Lender), Dean Shafer, Bernadette Perry, and Tony Perry.

In Foreclosure Solutions, the Commission vote to issue the stipulated final order was 4-0. The order was filed in the U.S. District Court for the Northern District of Ohio, Eastern Division.

The FTC asks people to report foreclosure rescue and mortgage modification scams to FTC.govor by calling 1-877-FTC-HELP. The FTC makes those complaints available to federal, state, and local law enforcement through the Consumer Sentinel Network. The video also reminds homeowners in distress that free help is available from the Homeowner’s HOPE Hotline 888-995-HOPE (4673), which connects homeowners to HUD-certified housing counselors.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaints is not a finding or ruling that the defendants have actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendant of a law violation. Stipulated orders have the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Contact Information
MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
J. Reilly Dolan
Bureau of Consumer Protection
202-326-3292

The Online Entrepreneur Inc. aka Dave’s Consulting Associates, Inc

Leave a comment

Defendants Behind ‘Online Entrepreneur’
Work-at-Home Scheme Settle FTC Charges

For Release

March 20, 2014

The operators of a business opportunity scheme have agreed to settle Federal PayDayLoanTrade Commission charges that they defrauded consumers through the sale of a work-at-home program that purportedly provided consumers with their own websites that would enable them to earn a significant income by affiliate marketing with websites of well-known companies such as Prada, Sony, Louis Vuitton, and Verizon.

The settlement is part of a federal-state crackdown on scams that falsely promise jobs and opportunities to “be your own boss” to people who are unemployed or underemployed. Under the settlement, the defendants behind the operation, The Online Entrepreneur, will be banned from selling business and work-at-home opportunities.

According to an FTC complaint filed in November 2012, the defendants sold the “Six Figure Program” to consumers as a purportedly no-risk, money-back guaranteed opportunity to make money via their own website, falsely claiming that, for a $27 fee, they would enable consumers to affiliate with well-known companies’ websites and earn commissions. After purchasing the program, consumers learned that they had to pay $100 or more in additional costs just to set up their websites. The court subsequently halted the allegedly deceptive practices, froze the defendants’ assets, and put the companies into receivership pending a court hearing.

The settlement order announced today permanently prohibits The Online Entrepreneur Inc., Ben and Dave’s Consulting Associates, Inc., and David Clabeaux from selling business and work-at-home opportunities, misrepresenting that consumers are likely to earn money and misrepresenting any material fact about a product or service. They also are barred from failing to clearly disclose the terms of any offer before consumers provide billing information, and making a representation unless it is true and the defendants have competent and reliable evidence to substantiate the claim. In addition, the order prohibits these defendants from selling or otherwise benefiting from consumers’ personal information, and failing to properly dispose of customer information.

The order imposes a judgment of more than $2.9 million, which will be suspended when Clabeaux has surrendered real estate, personal property, and bank and investment accounts. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. Litigation continues against the remaining defendant, Benjamin Moskel.

The Commission vote authorizing the staff to file the proposed consent judgment was 4-0. The consent judgment was entered by the U.S. District Court for the Middle District of Florida on March 13, 2014.

NOTE:  Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:

Frank Dorman,
Office of Public Affairs
202-326-2674

STAFF CONTACT:

Barbara E. Bolton,
FTC’s Southeast Region
404-656-1362

Related Article: