FTC Halts Cross Border Domain Name Registration Scam

I was glad to see this press release from the FTC, because as the Co-Founder of a non-profit I have seen the letters that companies like this send out, and how real some of them look, so I can see how some people would believe that they must really pay the fees that these people are asking for.

Read the press release to understand what I am talking about . . .

Thousands of Small Businesses and Non-profits Billed for Bogus Renewal Fees

The Federal Trade Commission has permanently halted the operations of Canadian con artists who allegedly posed as domain name registrars and convinced thousands of U.S. consumers, small businesses and non-profit organizations to pay bogus bills by leading them to believe they would lose their Web site addresses unless they paid. Settlement and default judgment orders signed by the court will bar the deceptive practices in the future.

In June 2008, the FTC charged Toronto-based Internet Listing Service with sending fake invoices to small businesses and others, listing the existing domain name of the consumer’s Web site or a slight variation on the domain name, such as substituting “.org” for “.com.” The invoices appeared to come from the businesses’ existing domain name registrar and instructed them to pay for an annual “WEBSITE ADDRESS LISTING.” The invoices also claimed to include a search engine optimization service. Most consumers who received the “invoices” were led to believe that they had to pay them to maintain their registrations of domain names. Other consumers were induced to pay based on Internet Listing Service’s claims that its “Search Optimization” service would “direct mass traffic” to their sites and that their “proven search engine listing service” would result in “a substantial increase in traffic.”

The FTC’s complaint charged that most consumers who paid the defendants’ invoices did not receive any domain name registration services and that the “search optimization” service did not result in increased traffic to the consumers’ Web sites.

A federal district court judge in Chicago, Robert M. Dow, Jr., ordered a temporary halt to the deceptive claims and froze the defendants’ assets, pending trial. The settlement and default judgment orders announced today end that litigation.

The orders bar the defendants from misrepresenting: that they have a preexisting business relationship with consumers; that consumers owe them money; that they will provide domain name registration; and that they will provide “search optimization services” that will substantially increase traffic to consumers’ Web sites. The defendants are also required to disclose any material restrictions or aspects of any goods or services they provide.

The settlement order, entered against defendants Isaac Benlolo, Kirk Mulveney, Pearl Keslassy, and 1646153 Ontario Inc., includes a suspended judgment of $4,261,876, the total amount of consumer injury caused by the illegal activities. Based on the inability of the settling defendants to pay, they will turn over $10,000 to satisfy the judgment. The default judgment order was entered against defendant Steven E. Dale and includes a judgment in the amount of $4,261,876.

Charges against Ari Balabanian and Data Business Solutions were dismissed by the court at the FTC’s request.

NOTE: Stipulated orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the full force of law when signed by the judge.
The Federal Trade Commission works for the consumer 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, click http://www.ftccomplaintassistant.gov or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.

Bank of America Settlement

I found a great article on the Bank of America Settlement with the FTC.

In my last post I noted the beginnings of some positive movement by consumer protection agencies that have been largely dormant and, in some cases like the United States Trustee program, actively anti-consumer. A few weeks ago, as Katie Porter noted in a recent post, Bank of America (BOA) reached a settlement with the Federal Trade Commission with respect to certain mortgage overcharges, including overcharges in bankruptcy, on mortgages formerly serviced by Countrywide Mortgage. The settlement requires reimbursement to consumers who were overcharged. BOA, in addition to agreeing not to lie, steal, or file documents without reviewing them, will also have to follow notice procedures similar to those that are already required or are likely to be required for all mortgage companies once new Bankruptcy Rule 3002.1 becomes effective in December, 2011. The United States Trustee (UST) Program assisted the FTC in its efforts. This settlement is the first significant positive result of increased UST scrutiny of mortgage lenders, although the extent of the UST’s participation is not known.

To read the rest of the article go to http://www.creditslips.org/creditslips/2010/07/bank-of-america-settlement-with-ftc-raises-some-questions.html#more

Good news for some homeowners

In a press release from the FTC it was announced that Countrywide, who was accquired by Bank of America in 2008, will be paying $108 million to homeowners who were struggeling to keep their homes and Countrywide collected exsessive fees from.

“Life is hard enough for homeowners who are having trouble paying their mortgage. To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible,” said FTC Chairman Jon Leibowitz. “We’re very pleased that homeowners will be reimbursed as a result of our settlement.”

The bank took advantage of the fact that these people were in an emotional place while they were making these choice because they feared that they could loose their home.  They trusted what the bank employees were telling them, and as my husband and I learned years ago, you cannot always trust that the information that they are giving you is true and accurate, even when you think you are asking the right questions.

To read all of the information on this case and the settlement with the FTC, you can go to
http://ftc.gov/opa/2010/06/countrywide.shtm

News from the FTC

The FTC has some great information on efforts that they have taken against scams and fraud.  A recent press release talks about a New Jersey based telemarketing scheme and Civic Development Group.  To read the entire press release, go to http://www.ftc.gov/opa/2010/03/cdg.shtm

National Consumer Protection Week

NCPW 2010 -- Dollars & Sense: Rated “A” for All Ages


12TH ANNUAL NATIONAL CONSUMER PROTETION WEEK


WASHINGTON – Today, Scam Victims United joins with federal, state and local government agencies and consumer protection organizations to announce the 12th Annual National Consumer Protection Week (NCPW), March 7-13. This coordinated consumer education campaign encourages individuals across the country to take full advantage of their consumer rights.

This year’s theme -- Dollars & Sense: Rated “A” for All Ages -- highlights the importance of using good consumer sense at every stage of life – from grade school to retirement. In recognition of NCPW 2010, Scam Victims United and its partners are promoting free resources to help people protect their privacy, manage money and debt, avoid identity theft, understand credit and mortgages, and steer clear of frauds and scams.

"The message of National Consumer Protection Week 2010 is simple: It’s never too early or too late to become a more informed and empowered consumer,” said Shawn Mosch, Co-Founder of Scam Victims United. “Regardless of your age or financial situation, there are useful lessons to learn about spending and managing money wisely. Scam Victims United encourages everyone to visit the NCPW website, www.consumer.gov/ncpw, for tips about making smarter decisions in the marketplace. ”

Marketers of Unproven Weight-Loss Products Ordered to Pay Nearly $2 Million

From the FTC

Court Rules in Favor of FTC in Case of Diet Tea and Bio-Slim Patch


A federal district court has ordered the marketers of an herbal tea and a diet patch to pay nearly $2 million to the Federal Trade Commission for making deceptive claims that both products would allow users to lose weight quickly without diet or exercise.

For nearly two years before the FTC complaint was filed, Bronson Partners, LLC and its officer, Martin Howard, marketed Chinese Diet Tea, telling consumers they could lose as much as six pounds a week by drinking one cup of the green tea after each meal to “neutralize the absorption of fattening foods.” Advertising in national magazines such as USA Weekend and Clipper Magazine, the marketers charged $24.95 plus shipping and handling for a month’s supply.

Also during this time, the marketers sold the Bio-Slim Patch, a diet patch that contained extracts from the fucus, garcinia, and guarana plants. Instructing consumers to wear the patches 24 hours a day for at least three months, the marketers claimed that “repulsive, excess ugly fatty tissue will disappear at a spectacular rate due to the combination and synergy of these three natural ingredients.” The marketers advertised the patch in national magazines and in a company catalog, and consumers paid $24.95 plus shipping and handling for a month’s supply.

In addition to ordering the nearly $2 million payment, citing “obvious and widespread” violations of the FTC Act, Judge Stefan R. Underhill of the U.S. District Court for the District of Connecticut granted the FTC’s request to prohibit the defendants from deceptively selling or advertising any weight-loss products. “Future violations of a similar nature would surely result in financial harm to consumers, and possible physical harm if consumers engage in risky weight-loss techniques in reliance on (the) defendants’ misleading representations,” the judge wrote in his December 2009 ruling and order. He also ordered the defendants to help the FTC identify consumer victims who lost money on the products, so that restitution can be made.

The FTC filed its complaint against Bronson Partners, LLC and Martin Howard as part of the “Big Fat Lie” law enforcement sweep in November 2004. The sweep targeted marketers of bogus weight-loss products, such as pills, powders, gels, green teas, and diet patches. In July 2008, the U.S. District Court for the District of Connecticut granted the FTC’s request for summary judgment against Howard and Bronson Partners, LLC – also doing business as New England Diet Center and Bronson Day Spa.

Copies of the November 2004 complaint and the December 2009 ruling and order are available on the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers 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 1,700 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.

Business Opportunity Scams

Business Opportunity Scams are everywhere.  Here is a great video from the Federal Trade Commission that takes you behind the scenes with a convicted business opportunity scammer as he reveals the tricks he used to cheat people out of their money. You’ll also hear first-hand from two people who got caught up in bogus business opportunities and learn what questions to ask to tell if a business opportunity is a scam or the real deal.




http://ftc.gov/bcp/edu/pubs/consumer/invest/inv02.shtm

AVOID CHARITY FRAUD

TIP OF THE MONTH --- AVOID CHARITY FRAUD from the FTC


In the wake of the devastation caused by the earthquake in Haiti, the FTC is alerting people to choose carefully when considering urgent appeals for aid. The best way to provide immediate help is to donate money directly to established national relief organizations that have the experience and means to deliver aid. The FTC offers these tips on giving:

* Donate to recognized charities that you have given to before. Be skeptical about those that have sprung up overnight. They may be well-meaning, but they lack the infrastructure to provide assistance. And be aware that some phony charities use names that sound or look like those of respected, legitimate organizations.

* You don’t have to donate to someone who contacts you out of the blue with an unsolicited email, phone call or text message. It’s better to give through a website or phone number that you know is legitimate. Do not give out your personal or financial information – including your Social Security number or credit card and bank account numbers .
* Check out any charities before you donate. Contact the Better Business Bureau’s Wise Giving Alliance at http://www.give.org/. For more tips on donating wisely, visit www.ftc.gov/charityfraud

National Consumer Protection Week

News from the FTC

The 12th Annual National Consumer Protection Week (NCPW) is right around the corner: March 7-13. This campaign provides tips and resources at www.consumer.gov/ncpw to help everyone take full advantage of their consumer rights. This year’s theme -- Dollars & Sense: Rated “A” for All Ages -- highlights the importance of using good consumer sense at every stage of life – from grade school to retirement. Check out the NCPW blog for short, timely features about helpful resources, leave a comment, and share your plans for promoting NCPW. The FTC and its NCPW partners will host a Congressional Fair for Members and staff, February 18 from 9:30 am to 11:30 am in the Rayburn Foyer. Get free constituent education resources for town hall meetings in your district. For more information about NCPW and the Fair, contact Derick Rill

From the FTC

The FTC will mail more than 356,000 checks — totaling approximately $14 million — to reimburse people who were victimized by a fraudulent telemarketing scheme operated by Suntasia Marketing. In a December 2008 settlement, Suntasia and its affiliates agreed to pay more than $11 million in cash to the FTC and turn over various property to be sold. According to the FTC, from 1999 to 2007, Suntasia deceptively marketed a series of memberships in buyers’ and travel clubs to nearly a million consumers nationwide. Press Release Here.

FRAUD FORUM. Proposes developing more effective ways to protect people from scams, including reaching under-served communities; improving victim assistance; training law enforcers and legal services in the use of new technologies to fight fraud; expanding the number of contributors to the Consumer Sentinel Network database; and encouraging more research on fraud victims and scammers. Press release: www.ftc.gov/opa/2009/12/fraud.shtm.

NEW MATERIALS FOR CONSUMERS

YOU ARE HERE. Helps kids protect their privacy, spot frauds and scams, and avoid identity theft. At the new Security Plaza at www.ftc.gov/youarehere, visitors can build a social networking page, see the unintended consequences of posting personal information, and get tips on how to keep their computers safe while they’re online. In the arcade, visitors can play Info Defender 3 and protect Earthlings from Cyclorian invaders who would steal their identities. www.ftc.gov/youarehere.

TIP OF THE MONTH – NATIONAL CONSUMER PROTECTION WEEK (NCPW) 2010

The FTC encourages all Members to participate with other federal, state and local government agencies and consumer protection organizations in the 12th Annual NCPW, March 7-13. This coordinated consumer education campaign provides tips and resources at www.consumer.gov/ncpw to help everyone take full advantage of their consumer rights. This year’s theme -- Dollars & Sense: Rated “A” for All Ages -- highlights the importance of using good consumer sense at every stage of life – from grade school to retirement. The message of NCPW 2010: It’s never too early or too late to become a more informed and empowered consumer. The FTC and its partners are promoting free materials on protecting privacy, managing money and debt, avoiding identity theft, understanding credit and mortgages, and steering clear of frauds and scams. You can download content from www.consumer.gov/ or order free materials at http://bulkorder.ftc.gov. Grab buttons and banners to link to the NCPW site, cut and paste information into your constituent newsletters or blog posts, distribute copies of materials in your offices or use them in a town hall meeting. For more information about how you can promote NCPW in your district, contact Derick Rill at drill@ftc.gov.

Free trial scams

The Federal Trade Commission has joined an effort to warn consumers about deceptive online marketing related to free trial offers that require people to cancel or opt-out of a recurring charge for future products or services.

The Director of the FTC's Bureau of Consumer Protection, David C. Vladeck, along with officials from Visa and the Better Business Bureau (BBB) are cautioning consumers about the free trial feature, known as a "negative option." In a negative option feature, a company takes a consumer's failure to cancel a free trial offer as permission to begin charging for the service.

The FTC says many businesses use this billing process appropriately, others pre-check consent boxes, bury details of the offers in fine print, terms and conditions, and make cancellations or returns difficult, landing people in a cycle of recurring charges for products and services they do not want.

"Free trial marketing can be convenient for consumers-if the terms are clearly spelled out beforehand," Vladeck said. "Legitimate marketers don't hide critical information about costs or cancellation policies to get their customers to agree to future charges."

The FTC, Visa and the BBB offer the following tips to online shoppers on how to spot misleading free trial offers and how to deal with unauthorized charges:

Take time to read and understand all terms and conditions, so a free trial doesn't turn into a costly purchase you didn't intend to make.
Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you don't want.
Review credit card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.
Try to resolve the situation with the merchant. If you're unsuccessful, contact the card issuer immediately to dispute the charge.
Consumers who think they have been victims of deceptive marketing and who have not been able to resolve the issue with the merchant should call their credit card company to dispute the charge. Consumers can also file a complaint with the FTC or their local BBB.

Are state consumer protection laws working?

This information was posted at CL&P Blog

A comprehensive new study of state consumer protection statutes was just published. The background for the study is described as follows:



During the 1960s there appeared to be increasing demand from the American public and elected officials for consumer protection laws. State legislatures responded by enacting a diverse collection of legislation commonly called Consumer Protection Acts (CPAs). Most CPAs were originally designed to supplement the Federal Trade Commission’s (FTC’s) role in protecting consumers from “unfair or deceptive acts or practices.” Yet there is growing concern that CPA enforcement and litigation are qualitatively different than FTC enforcement and potentially counterproductive for consumers. Critics argue that CPAs generate a set of incentives that encourages plaintiffs and their attorneys to file claims of dubious merit. Proponents counter that CPAs are necessary to supplement FTC enforcement and provide incentives for individuals to bring suit to deter harmful conduct. While both critics and proponents of CPA enforcement make claims about the nature and quality of state consumer protection litigation, the academic and policy debates surrounding CPAs suffer from a remarkable void of empirical data.



The Searle Civil Justice Institute study attempts to provide this empirical data, but also makes several conclusions based on the data, which it asserts suggest that state consumer protection statutes are not working as they should. In my opinion, the data may also be viewed as supporting the conclusion that the Federal Trade Commission is not charged with protecting individual consumers, and state statutes are successfully meeting their goal of providing protection for individual consumers.



Here are the Key Findings of the study:



1. Litigation under CPAs has increased dramatically since 2000. Between 2000 and 2007 the number of CPA decisions reported in federal district and state appellate courts increased by 119%. This large increase in CPA litigation far exceeds increases in tort litigation as well as overall litigation during the same period.

2. Vague statutory definitions of prohibited conduct are a major driver of CPA litigation. Whether a CPA statute has vague language prohibiting some general type of conduct rather than a specific list of illegal actions is an important potential contributor to the level of CPA litigation in the state. States with vague definitions of prohibited conduct have more CPA litigation.

3. CPAs are becoming more favorable and generous to consumer litigants. Between 1995 and 2007, the expected value of recovery for potential plaintiffs increased dramatically as measured by CPA requirements to bring a cause of action and available remedies. In 2004, the state CPAs that were the most favorable to plaintiffs were New Hampshire, Massachusetts, and Connecticut. The states with CPAs that were the least favorable to plaintiffs were Colorado, Maryland, and Georgia.

4. States with CPAs that are more favorable to consumers have more CPA litigation. The expected value of recovery under a given state’s CPA appears to contribute to the amount of litigation that makes use of the act. States that allow more generous remedies and make it easier for consumers to win in court see more CPA litigation.

5. Most CPA claims would not constitute illegal conduct under FTC consumer protection standards. The Searle Shadow FTC found that 78% of a sample of CPA claims would not constitute legally unfair or deceptive conduct under FTC policy statements. While relatively few CPA claims would constitute illegal conduct under the FTC standard (22%), even fewer (12%) would result in FTC enforcement.

6. Almost 40% of CPA claims where the consumer plaintiff prevailed at trial would not constitute illegal conduct under FTC consumer protection standards.

7. In a sample of CPA claims where the consumer plaintiff prevailed in court, the Searle Shadow FTC found that 38% of these successful claims would not constitute illegal conduct under the FTC standard. Although most of these successful cases would meet the FTC illegality standards, only 23% would likely be enforced by the FTC.

But they said it was "free"

We have all seen them, the commercials with the singing pirates telling you to go and get your free credit report. The Federal Trade Commission wants you to know something about those "free" credit reports. When you go to sign up for your free credit report, it asks for your credit card number "to establish your account". While you might not see a charge that same day, you will eventually receive a charge for this service.

AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law. The Fair Credit Reporting Act guarantees you access to a free credit report from each of the three nationwide reporting agencies — Experian, Equifax, and TransUnion — every twelve months. The Federal Trade Commission has received complaints from consumers who thought they were ordering their free annual credit report, but instead paid hidden fees or agreed to unwanted services. Don’t be fooled by TV ads, email offers, or online search results. Go to the authorized source when you request your free report

Here are two great videos from the FTC about the Free Credit Report scam

Money Transfers

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt034.shtm

Money Transfers Can Be Risky Business

You’ve won a prize!
I’m in a foreign country, and I need cash.
We’re temporarily unable to accept credit cards.
Your dream apartment is available immediately at an incredible price!

Scam artists use a number of elaborate schemes to get your money, and many involve money transfers through companies like Western Union and MoneyGram. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, money transfers may be useful when you want to send funds to someone you know and trust — but they’re completely inappropriate when you’re dealing with a stranger.

Why do scammers pressure people to use money transfers? So they can get their hands on the money before their victims realize they’ve been cheated. Typically, there is no way you can reverse the transaction or trace the money. Another reason: When you wire money to another country, the recipient can pick it up at multiple locations, making it nearly impossible to identify them or track them down. In some cases, the receiving agents of the money transfer company might be complicit in the fraud. Money transfers are virtually the same as sending cash — there are no protections for the sender.

Many money transfer scams involve dramatic or convincing stories that play on your optimistic nature, your altruism or your thriftiness. But no matter how you parse it, they always cost you money. Here are some scams involving money transfers that you may recognize:

Counterfeit Check Scams

Someone sends you a check with instructions to deposit it and wire some or all the money back. By law, banks must make the funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for the checks you deposit, so if a check turns out to be fraudulent, you will owe the bank any money you withdrew.

Counterfeit check scams have many variations:

Lotteries and Sweepstakes: You just won a foreign lottery! The letter says so, and a cashier’s check is included. All you have to do is deposit the check and wire money to pay for taxes and fees. Oops: The check is no good. Although it looks like a legitimate cashier’s check, the bank eventually will determine that it is a fake. The lottery angle is a trick to get you to wire money to someone you don’t know. If you deposit the check and wire the money, the check will bounce — and you’ll be responsible for the money you sent.

Overpayment Scams: Someone responds to your posting or ad, and offers to use a cashier’s check, personal check or corporate check to pay for the item you’re selling. At the last minute, the so-called buyer (or the buyer’s “agent”) comes up with a reason to write the check for more than the purchase price, and asks you to wire back the difference. The checks are counterfeit, but very often, good enough to fool bank tellers. Acting in good faith, you deposit the check and wire the funds back to the “buyers.” Oops: the check bounces. You are liable for the amount you wired.

Mystery Shopper Scams: You are hired to be a mystery shopper and asked to evaluate the customer service of a money transfer company. You’re given a check to deposit in your personal bank account. Then, you’re told to withdraw the amount in cash and wire the money using a certain money transfer service. Often, the instructions say to send the transfer to a person in Canada or another foreign country. You’re then asked to evaluate your experience — but no one collects the evaluation. Oops: the check you deposited bounces. You are responsible for the money you withdrew.

Don’t wire money to: a stranger — in this country or anywhere else someone claiming to be a relative in a crisis — and who wants to keep their request for money a secret someone who says a money transfer is the only form of payment that’s acceptable someone who asks you to deposit a check and send some of the money back

Other Money Transfer Scams

Online Purchase Scams: If you are buying something online and the seller insists on a money transfer as the only form of payment, consider it a red flag: ask to use a credit card, an escrow service or another way to pay. No matter what story the seller tells you, insisting on a money transfer is a signal that you won’t get the item — or your money back. Find another seller.

Advance Fee Loans: Ads and websites that guarantee loans or credit cards regardless of your credit history may be tempting. The oops moment is when you apply for the loan or credit card and find out you have to pay a fee in advance. If you have to wire money for the promise of a loan or credit card, it’s likely you’re dealing with a scam artist.

Family Emergency Scams: You get a call out of the blue from someone who claims to be a member of your family and needs cash to get out of a jam — to fix a car, get out of jail or leave a foreign country. He begs you to wire money right away and to keep the request confidential. Check it out with your family. It’s likely they know nothing about it. If you absolutely, positively cannot ignore the request, try to verify the caller’s identity by asking very personal questions a stranger couldn’t possibly answer. And keep trying to reach the family to check out the story.

Apartment Rental Scams: Some scammers hijack bona fide rental or real estate listings by changing the email address or other contact information, and placing the altered ads on other sites. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, and try to pique your interest with the promise of below-market rent. But once they have your attention, a skilled scammer asks you to wire an application fee, a security deposit or the first month’s rent. It’s never a good idea to send money to someone you’ve never met for an apartment you haven’t seen. If you can’t meet in person, see the apartment or sign a lease before you pay, keep looking.

If you’ve wired money to a scam artist, call the money transfer company immediately to report the fraud and file a complaint. You can reach the complaint department of MoneyGram at 1-800-MONEYGRAM (1-800-666-3947) or Western Union at 1-800-448-1492. Ask for the money transfer to be reversed. It’s unlikely to happen, but it’s important to ask. Then, file a complaint with the FTC. Visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.govor call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MoneyGram class action

Last week I wrote about MoneyGram and the FTC, and how the FTC has found that MoneyGram knew that it's money transfer system was being used to defraud and scam people out of their money, and did very little about it.

Since then I have been contacted by a consumer rights attorney in California and he would like to bring a claim against MoneyGram to get money back to scammed consumers.

If you know of anyone in California that was scammed by MoneyGram, please have them contact me so that I can get them in touch with this attorney. He is willing to help the victims and work on contingency.

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Support Scam Victims United by shopping at
http://shopittous.blogspot.com/

Consumer Education

The FTC has a new Consumer Alert, available on its Web site at http://ftc.gov/bcp/edu/pubs/consumer/alerts/alt034.shtm, titled “Money Transfers Can Be Risky Business.” It includes useful information on how consumers can avoid telemarketing and money transfer fraud, including the following tips. Don’t wire money to:

· someone you don’t know, in the U.S. or in a foreign country;

· someone claiming to be a relative in the midst of a crisis and who wants to keep the
request for money a secret;

· someone who says a money transfer is the only form of payment that’s acceptable; or

· someone who asks you to deposit a check and send some of the money back.

Consumers interested in the process of redress administration should call 202-326-3755.

The FTC’s case was investigated with the assistance of the Toronto Strategic Partnership, Project Colt, Project Emptor, and the U.S. Postal Inspection Service. Additional assistance was provided by the Durham Regional Police Service, Ontario, Canada, and the Canadian Anti-Fraud Call Centre (PhoneBusters).

The Toronto Strategic Partnership includes the FTC, the U.S. Postal Inspection Service, Competition Bureau Canada, the Toronto Police Service Fraud Squad – Mass Marketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Consumer Services, the Royal Canadian Mounted Police, and the United Kingdom's Office of Fair Trading. Project Colt includes the FTC, the Royal Canadian Mounted Police, Surete du Quebec, City of Montreal Police Service, Canada Border Services Agency, Competition Bureau Canada, U.S. Homeland Security, U.S. Postal Inspection Service, and the Federal Bureau of Investigation. Project Emptor includes the FTC, the Business Practices and Consumer Protection Authority of British Columbia, the Royal Canadian Mounted Police, Competition Bureau Canada, the Federal Bureau of Investigation, and the U.S. Postal Inspection Service.

The Commission vote approving the complaint and proposed consent order was 3-0, with Commissioner Pamela Jones Harbour recused. The complaint and order were filed on October 19, 2009, in the U.S. District Court for the Northern District of Illinois, Eastern Division.

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

Copies of the complaint and stipulated order are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 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 1,700 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.

MoneyGram and FTC

This information can be found at

http://www.ftc.gov/opa/2009/10/moneygram.shtm

MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars. MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.

The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada – after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans. The $84 million in losses is based on consumer complaints to MoneyGram – actual consumer losses likely are much higher.

The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes. According to the FTC’s complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

“Money transfer services have a responsibility to make sure their systems don’t become conduits to rip people off,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “In this case, MoneyGram not only ducked this responsibility, but also looked the other way while its agents took part in the scams.”

Minneapolis, Minnesota-based MoneyGram operates through a worldwide network of approximately 180,000 agent locations in 190 countries and territories. In its complaint, the FTC charged that in recent years this network has increasingly been used by telemarketing scammers to prey on U.S. consumers. Con artists prefer to use money transfer services because they can pick up transferred money immediately, the payments are often untraceable, and victimized consumers have no chargeback rights or other recourse.

In 2007, 72 percent of all complaints received by the FTC involving Canadian-based fraud reported using money transfer services to make payments. According to a recent FTC survey cited in the complaint, at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced. The Commission’s complaint further stated that based on the more than 20,600 fraud complaints MoneyGram itself received, U.S. consumers lost more than $44 million to cross-border money-transfer frauds between 2004 and 2008 alone. When combined with losses reported by U.S. consumers on money transfers within the United States, that number grows to $84 million.

In many of the scams that used MoneyGram’s money transfer system, the con artists used counterfeit checks to induce consumers to send money back by wire transfer. The most prevalent of these scams were lottery or prize schemes in which consumers were told they had won thousands of dollars and just had to pay a fee for “taxes,” “customs,” or “insurance” to a third-party to collect their winnings. Consumers paid the fee using MoneyGram, but received nothing. In another scheme, telemarketers told consumers they were guaranteed loans, regardless of their credit score. All they had to do was pay “insurance,” “paperwork,” or “processing” fees to complete the transaction. Consumers who sent funds using a money transfer service got nothing in return.

In mystery shopping scams, the con artists called U.S. consumers or sent them a piece of direct mail in which they claimed to be hiring consumers to visit stores such as Wal-Mart to evaluate MoneyGram money transfer operations. The con artists sent consumers a cashier’s check, telling them to deposit it in their checking account and then send most of the money back using a money transfer at Wal-Mart. When the counterfeit checks bounced, consumers realized they had lost the money they transferred. By this time, however, the money transfer agents had already received and paid out the money, often either without checking IDs or by using fake drivers license information.

The FTC’s complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network, claiming that proposals to deal with the problem were too costly and were not the company’s responsibility. The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. Some employees who raised concerns were disciplined or fired, the FTC charged.

In addition, at least 65 of MoneyGram’s Canadian agents have been charged by Canadian or U.S. law enforcers with, or are currently being investigated for, colluding in fraud schemes that used the MoneyGram system.

The complaint charges MoneyGram with violating both the FTC Act and the FTC’s Telemarketing Sales Rule by helping sellers or telemarketers who it knew – or consciously avoided knowing – were violating federal law, and for not taking adequate steps to prevent fraud.

The agreed-upon court order settling the FTC’s charges bars MoneyGram from knowingly providing substantial help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule and requires it to implement a comprehensive anti-fraud program. Under the anti-fraud program, MoneyGram must conduct background checks on prospective agents; educate and train its employees about consumer fraud; institute agent monitoring; and discipline agents who don’t comply with the rules. The order also requires MoneyGram to provide a clear and conspicuous fraud warning on the front of all its money transfer forms. The order’s conduct provisions apply to all MoneyGram money transfers sent worldwide from either the United States or Canada.

The order contains monitoring and discipline provisions that will ensure MoneyGram is properly training, monitoring, and taking actions to address problems related to its agents. To do this, the order requires MoneyGram to develop and maintain a system for receiving consumer complaints and data, and to provide that information to the FTC upon request. MoneyGram also must take all reasonable steps to identify agents that are involved in fraud. It must review its transaction data to identify any unusual or suspicious activity by its agents and fire any agent who it believes may be participating in fraudulent activities. It also must fire or suspend any agent who has not taken appropriate steps to stop fraudulent money transfers.

Finally, MoneyGram will pay the Commission $18 million, which will be used to provide redress to consumers.

ONLINE CHECK WRITING

ONLINE CHECK WRITING

The FTC has charged the operators of an Internet-based check creation and delivery service with violating a 2009 court order. The FTC has asked the court to impose a daily fine or imprisonment to make Neovi, Inc., its principals and affiliates stop their illegal actions, compensate affected customers, and give up their ill-gotten gains. According to the FTC, the defendants allowed people to create and email checks via the Internet without verifying their identities or their authority to withdraw money from the accounts they were using.
Press release: www.ftc.gov/opa/2009/11/neovi.shtm.

MoneyGram International Reaches Agreement with FTC

This press release can be found at http://www.moneygram.com/MGICorp/InvestorRelations/News/index.htm

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 20, 2009-- MoneyGram International (NYSE:MGI), a global leader in the payment services industry, today entered into an agreement with the Federal Trade Commission (FTC) to make certain enhancements to its consumer anti-fraud program to further combat consumer fraud perpetrated by criminals who use MoneyGram’s services illegally.

“At MoneyGram, we take the issue of consumer fraud very seriously. Our ability to provide safe and reliable money transfer services for our consumers is critically important,” said Pamela H. Patsley, MoneyGram chairman and CEO. “MoneyGram has committed extraordinary resources to building a state-of-the-art consumer anti-fraud program.”

The company has begun implementing new systems and processes to further bolster consumer protection, which have been effective at stopping millions of dollars in fraudulent transactions every year.

“While we don’t agree with the FTC’s allegations regarding our fraud prevention in the past, we can agree on fraud prevention today and in the future,” said Patsley. “We don’t want our customers being victimized by third-party fraud. What we are announcing today with the FTC is our commitment to enhance our already comprehensive efforts to combat fraud and ensure our customers can continue to rely on MoneyGram for safe, reliable money transfer services.”

MoneyGram provides consumer warnings about the latest scams on its website and money transfer send-forms, and through its 24-hour customer service center. The company also works closely with local, state, federal and international law enforcement to combat this global criminal activity.

“We are committed to be vigilant in our efforts in protecting our customers from fraudulent activity,” said Patsley. “Ensuring safe and reliable money transfers for our customers all over the world is at the forefront of all we do.”

As part of its agreement with the FTC, the company has also agreed to pay $18 million into an FTC-administered fund to refund consumers who have been victimized through third-party fraud.

There is also an article about this topic at
http://www.examiner.com/x-1893-News-You-Can-Use-Examiner~y2009m10d20-A-medium-for-fraud-MoneyGram-to-pay-millions

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