Google to Refund Consumers at Least $19 Million to Settle FTC Complaint It Unlawfully Billed Parents for Children’s Unauthorized In-App Charges

FTC Order Requires Google to Change its Mobile App Billing Practices to Ensure Consumers’ Consent is Obtained Before Charges Levied

Google Inc. has agreed to settle a Federal Trade Commission complaint alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices. Under the terms of the settlement, Google will provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers before charging them for items sold in mobile apps.

The Commission’s complaint against Google alleges that since 2011, Google violated the FTC Act’s prohibition on “unfair” commercial practices by billing consumers for charges by children made within kids’ apps downloaded from the Google Play store. Many consumers reported hundreds of dollars of such unauthorized charges, according to the complaint.

“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”

This marks the Commission’s third case concerning unauthorized in-app charges by children. In January, the Commission announced a settlement with Apple Inc., requiring Apple to provide full refunds to consumers who were billed for unauthorized charges by children – paying a minimum amount of $32.5 million – and obtain express, informed consent for in-app charges. And in July, the Commission filed a complaint in federal court against Amazon.com, Inc., similarly seeking full refunds for consumers and an order requiring informed consent for in-app charges.

In-app charges are a component of many apps available from Google Play and can range from 99 cents to $200. In many apps used by children, users are invited to accumulate virtual items that help them advance in the game, though as the FTC’s complaint notes, the lines between virtual money purchases and real money purchases can be blurred. The FTC’s complaint alleges that Google billed consumers for many such charges by children without obtaining account holders’ authorization, leaving consumers holding the bill.

When Google first introduced in-app charges to the Google Play store in 2011, the complaint alleges, Google billed for such charges without any password requirement or other method to obtain account holder authorization. Children could incur in-app charges simply by clicking on popup boxes within the app as they used it.

According to the complaint, in mid- to late 2012, Google began presenting a pop-up box that asked for the account holder’s password before billing in-app charges. The new pop-up, however, did not contain any information about the charge. Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.

During this time, many thousands of consumers complained to Google about children making unauthorized in-app charges, according to the complaint. Some parents noted that their children had spent hundreds of dollars in in-app charges without their consent. Others noted that children buying virtual in-game items with real money were unaware they were causing their parents to be billed.

Google employees referred to the issue as “friendly fraud” and “family fraud” in describing kids’ unauthorized in-app charges as a leading source of refund requests, according to the complaint. The complaint further alleges that Google’s practice has been to refer consumers seeking refunds first to the app developer. Continue reading

“Gone Phishing” – WABI-TV

Video link

David Leach of the Maine Bureau of Consumer Credit Protection was in the studio with Russ Van Arsdale on Monday for this week’s Consumer Contact segment. They were speaking to Joy about a new anti-scam guide being released by the bureau. The guide is called “Gone Phishing” and it gives tips on avoiding all manner of scams and protecting your credit.

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Beware of gimmicks to treat concussions — Bangor Daily News

CONSUMER FORUM

Posted Aug. 31, 2014, at 12:23 p.m.

If you believe a lot of what’s flying around the Internet, recovery from a concussion can be hastened with the right food supplement. Another school of thought suggests concussions might be less severe if all players wore rubber liners over their helmets or a certain brand of mouth guard.

The above represent simple — or simplistic — solutions to very complex problems that can arise from head trauma. Concussions happen because of a violent impact with the head or body, a fall or other injury that shakes or jars the brain inside the skull.

Concussions affect people in different ways, and recovery times vary from person to person.

In January, the U.S. Food and Drug Administration warned consumers about snake oil salesmen posing as medical experts. An FDA news release said, despite glitzy claims, “the science doesn’t support the use of any dietary supplements for the prevention of concussions or the reduction of post-concussion symptoms.”

The FDA renewed its warning last week, as many parents began sending their high school students off to football practice.

“We’re very concerned that false assurances of faster recovery will convince athletes of all ages, coaches and even parents that someone suffering from a concussion is ready to resume activities before they are really ready,” Gary Coody, FDA’s national health fraud coordinator, said in the news release.

Many health and sports professionals share FDA’s concern that “wonder cures” may prompt some athletes to resume their parts in collision sports sooner than is medically realistic. Those “quick fixes” also might prompt some injured persons to take less than proper care of themselves after concussions.

Players and parents filed a lawsuit last week in San Francisco, claiming that soccer’s U.S. and international governing bodies aren’t doing enough to protect players.

The American Youth Soccer Organization adopted rules in 2009 that require coaches to remove players and have them medically evaluated after they suffer apparent concussions. The suit claims testing of injured players and time off for recovery are both inadequate.

At Orono High School, athletic director Mike Archer says a program called ImPACT (Immediate Post-Concussion Assessment and Cognitive Testing) has been part of a concussion management plan since November 2011. More than 7,400 high schools use ImPACT, a scientifically researched concussion management tool that also is used by Cirque du Soleil and more than 200 pro sports teams.

There has been a debate about the benefit of mouth guards and chinstrap impact measuring devices in preventing concussions. Archer says members of the Maine Interscholastic Athletic Administrators Association know there are limits to what protective gear can do.

As Archer puts it, “The bottom line is that there is no apparatus/piece of equipment, including the actual helmet itself, that guarantees the prevention of a concussion.”

He notes that parents at some schools have purchased a protective padding to cover football helmets. Altering a nationally certified piece of equipment can void a manufacturer’s warranty; should an injury occur, Archer says the owner would incur the risk and expense. He says schools should not allow alterations to equipment, as the schools would then assume liability for injuries.

The Maine Principals’ Association has adopted guidelines about athletes resuming sports after a concussion. It states they should not return “until they are symptom free and their cognitive functions have returned to baseline.” Before playing again, the Maine Principals’ Association also urges gradually increasing “sport-specific challenges which do not place the athlete at risk for a subsequent concussion.”

To read the FDA’s latest caution, visit www.fda.gov/ForConsumers/ConsumerUpdates/default.htm and see the article titled “Can a Dietary Supplement Treat a Concussion? No!”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

CFA Petitions the FCC to block the Comcast-Time Warner merger

Consumer Federation of America believes “Online Video Competition is the Last and Only Hope to Break the Stranglehold of Cable.”

Information posted in press release:

Washington, DC (August 25, 2014) – The Consumer Federation of America (CFA) and its member groups today filed a petition calling on the Federal Communications Commission (FCC) to block Comcast’s acquisition of Time Warner Cable and the swap of additional systems with Charter Communications.  The petition shows that the Comcast-Time Warner merger poses a much greater threat to competition, consumers and the public interest than the Comcast-NBCU merger, which has not benefited the public.

“The inevitable result of this merger will be higher prices, worse service, and less innovation,” Mark Cooper, CFA’s director of research said. “Just four years ago the FCC and the Department of Justice (DOJ) found that Comcast has market power, as the nation’s largest buyer of professional video content and the largest provider of both multichannel video programming and broadband Internet access service.

“The acquisition of Time Warner would increase Comcast’s market power by at least 50% and create a Goliath that would tower over the industry.  Comcast would be:

  • 1.5 times as large as the next largest multichannel video program distributor (MVPD),
  • 2 times as large as the next largest Internet access service provider,
  • 3 times as large as the next largest service provider with the capacity to deliver an integrated bundle of video and broadband,
  • the dominant cable and broadband operator in 24 of the nation’s largest 25 video markets, including the addition of the most important media markets, New York and Los Angeles.”

‘As Seen on TV’ firm sued for taking high-pressure sales tactics too far

CONSUMER FORUM

Posted Aug. 24, 2014, at 10:26 a.m.

click image to access NJ attorney general’s complaint

New Jersey’s attorney general and that state’s Division of Consumer Affairs have filed a complaint against Telebrands, the company known for its “As Seen on TV” series of offers.

The agencies allege Telebrands violated the state’s Consumer Fraud Act through its vigorous “upselling” via the company’s automated phone system and websites. When customers tried to place orders by phone or online, they received repeated prompts to order more goods and few ways to decline.

The five-count lawsuit also accuses Telebrands of shipping and billing for goods customers did not order and for running what the suit says were misleading ads, among other violations. The agencies also claim the company’s ordering system kept some callers tied up for a half hour or more, didn’t allow customers to verify their orders before authorizing charges, didn’t provide total costs of orders and wouldn’t give customers a clear way to decline additional products.

The Division of Consumer Affairs had plenty of complaints — 340 of them from 2012 through July of this year. It also did several months’ worth of undercover work, buying items that included “Instabulbs,” the “Pocket Hose” and the “Olde Brooklyn Lantern” through Telebrands websites and the toll-free numbers in the firm’s TV ads and infomercials.

“This action against Telebrands alleges that consumers were repeatedly pressured through gimmickry, misrepresentations and high-pressure sales tactics to buy products they didn’t want,” Steve Lee, the acting consumer affairs director, said.

He added that return policies were not as represented in ads and on the company’s website and called Telebrands’s actions “unconscionable.”

Telebrands founder and President A.J. Khubani said in a statement, “We take pride that for more than three decades, tens of millions of consumers have trusted TeleBrands for delivering innovative products.”

A search of the Better Business Bureau website for Telebrands reveals a list of more than 200 alternate business names based on products sold, from AB King Pro to Zero Pain.

Khubani’s statement also said consumer satisfaction is “always our top priority.”

“We are confident that this matter with the state of New Jersey will be resolved in short order,” Khubani added.

The lawsuit claims customers often received merchandise they had not ordered; there were no instructions on returning unwanted items; and if they did return items, they had to do so at their expense. The suit also charges that when callers tried to reach customer service people, they were placed on hold for long periods or were disconnected.

The Consumer Fraud Act provides restitution of up to $10,000 per violation. Because Telebrands was operating under a consent judgment in 2001 for similar violations, New Jersey is asking for penalties of up to $20,000 per violation.

Consumers who believe they have been cheated or scammed by a business or suspect any other form of consumer abuse can file a complaint with the New Jersey Division of Consumer Affairs by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200. Consumers also can file online at https://www20.state.nj.us/LPSCA_COMPL/ or download a complaint form to fill out and mail. Include copies of as much supporting documentation as possible.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Two Deaths Reported with Ace Bayou Bean Bag Chairs; Recall Announced Due to Suffocation and Choking Hazards

Consumers should stop using this product unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product.

Recall date: August 22, 2014, Recall number: 14-261

Description

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) and Ace Bayou Corp., of New Orleans, La., are announcing the voluntary recall of about 2.2 million bean bag chairs following the deaths of two children.

The zippers on the bean bag chairs can be opened and children can then crawl inside, get trapped and suffocate or choke on the bean bag chair’s foam beads. The voluntary standard requires non-refillable bean bag chairs to have closed and permanently disabled zippers.

A 13-year old boy from McKinney, Texas died and a 3-year-old girl from Lexington, Ky. died after suffocating from lack of air and inhaling the chair’s foam beads. Both children were found inside the chairs.

The recalled bean bag chairs have two zippers that can be unzipped and opened, including one of the exterior cover and other directly underneath that zipper.  The recalled chairs with zippers that open were sold in a variety of sizes, shapes, colors and fabrics. They include round or L-shaped, vinyl or fabric, and are filled with polystyrene foam beads. They were sold in a variety of colors, including purple, violet, blue, red, pink, yellow, Kelly green, black, port, navy, lime, royal blue, turquoise, tangerine and multi-color.  The round bean bag chairs were sold in three sizes, 30, 32 and 40 inches in diameter. The L-shaped bean bag chair measures 18 inches wide by 30 inches deep by 30 inches high. “ACE BAYOU CORP” is printed on a tag sewn into the bean bag chair’s cover seam. They were made in China.

The recalled bean bag chairs were sold at Bon-Ton, Meijer, Pamida, School Specialty, Wayfair and Walmart stores and online at Amazon.com, Meijer.com and Walmart.com before July 2013 for between $30 and $100.

Consumers should check their bean bag chairs for any zippers that can open, take those that can open away from children immediately and contact Ace Bayou for a free repair kit to permanently disable the zippers so that they cannot be opened.

State Officials Issue Consumer Protection Alert Following Data Breach Announcement by Shaw’s Parent Company

Press Release

GARDINER – Governor Paul R. LePage joined officials at Maine’s Department of Professional and Financial Regulation to reassure consumers that state and federal laws are in place to protect them from major losses due to file breaches containing debit and credit card information, such as the one disclosed August 14 by AB Acquisition LLC, which operates Shaw’s supermarkets in Maine and other states.

 

Although it’s unknown whether consumers will be impacted by the data breach involving Shaw’s, the company indicates that stores in Maine were among those affected,” Governor LePage said. “I encourage people to closely monitor their credit and debit card statements, and to contact the financial institution that issued the card promptly if questionable charges appear.  Staff at Maine’s Department of Professional and Financial Regulation is also available to provide information and guidance.” 

The Bureau of Financial Institutions and Bureau of Consumer Credit Protection at the Department of Professional and Financial Regulation outlined the following information and guidance for consumers responding to news of a financial data breach:

  • Consumers should always thoroughly review credit and debit card statements from the card issuer, and also review all other account statements from their bank or credit union.
  • If consumers have online access to their credit or debit card information, they should review account activity as soon as possible, rather than waiting for the statement to arrive in the mail.
  • If a credit or debit card was used at a business that has experienced a data security breach, or there is uncertainty about whether a card was used, consumers should be especially diligent in evaluating charges or withdrawals on their statement.
  • Since the data breach involving Shaw’s reportedly began in June, consumers should review statements covering June to the present.
  • If unknown charges or other suspicious activity appear on the account, consumers should notify the financial institution that issued the credit or debit card.
  • Consumers do NOT need to contact the company that experienced the data breach, such as Shaw’s.
  • Consumers’ liability for unauthorized use of a CREDIT CARD is limited to $50.  If account numbers have been stolen, consumers have no liability for unauthorized use.  
  • Consumers noticing unauthorized activity on their DEBIT CARD resulting from a data breach have sixty (60) days from when the bank or credit union sent the statement to report it.  If consumers fail to notify the bank or credit union of unauthorized transactions within this time, they are liable for the amount of the unauthorized transactions. This 60 day timeframe applies ONLY when the card’s data has been compromised through a data breach, as in the Shaw’s case.  See below for details about when a DEBIT CARD has been lost or stolen.
  • When a DEBIT CARD has been lost or stolen, consumers have two (2) business days after learning of the loss or theft to notify their financial institution in order to limit their liability to $50. If they do not notify their bank or credit union about the lost or stolen DEBIT CARD within two (2) business days, consumers may be liable for up to $500 of the unauthorized transactions. If consumers do not notify their financial institution within sixty (60) days after being provided a monthly statement that lists a fraudulent debit, they can be liable for unauthorized withdrawals of any amount that occur after that 60 day period.
  • To be safe, DEBIT CARD holders should act immediately if they notice unauthorized withdrawals.
  • If impacted by unauthorized charges or withdrawals, consumers should first call the bank or credit union that issued the credit or debit card, and then follow up in writing to explain the problem.
  • Some banks and credit unions may issue new cards to customers whose credit or debit card numbers are known to have been compromised through a data breach.
  • Consumer may ask a financial institution to re-issue a new card if they have concerns about their account.
  • Again, consumers do NOT need to contact the business that was subject to the data breach; and they need to contact the bank or credit union that issued their credit or debit card ONLY if they notice suspicious activity on their statement.
  • For more information, contact the Bureau of Financial Institutions toll-free at 1-800-965-5235, or the Bureau of Consumer Credit Protection is 1-800-332-8529.

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