Archive for the ‘FTC’ Category

The perils of not reading terms, conditions

CONSUMER FORUM 

Posted May 17, 2015, at 6:50 a.m.

Dear Company X:

Thank you for your recent letter regarding my inquiry about your negative option policy. I understand your policy states that “purchases and renewals are non-refundable” and that it was in effect when I signed up for your “club.”

I’m confused because your response states “membership cancellation can only be completed prior to the next renewal date.” Lucky me, I have plenty of time, since this membership I’m trying to get out of lasts until next February.

And, yes, when first signing up I checked the little box that says I understand and agree to all the stuff that’s in your policy. For your convenience, at the bottom of this letter I’ve included a checkbox that says you understand that most consumers wouldn’t read these things if trapped alone on a desert island with nothing else to read.

Here’s what gets me, Company X. A request to cancel has to be made at least five days before my plan expires. Even if I do that, with about nine months of “service” left on my current membership, I get nothing back?

I got into this situation because I was looking for a renewal notice before my last membership ran out. I noticed the renewal charge on my credit card bill, which arrived too late for me to cancel. Why don’t you guys do what the magazine companies do and send renewal notices eight or nine months before our subscriptions run out? Why instead is your policy to say nothing and be signed up and charged again?

Click to read: Tragic (Legal) Mistake 4: Continuity Programs: In the FTC Crosshairs

I’m told this is called a negative option policy. This practice by your company and many others has drawn attention from some people in high places. Six years ago, the Federal Trade Commission had its staff look at four kinds of negative option plans. The staff examined automatic renewals, including mine. They also looked at pre-notification negative option plans, such as book or music clubs that send a periodic notice that a consumer will receive another selection. If the person does nothing, the company ships the selection and charges for it. The staff also looked at continuity plans, where consumers agree up front to receive goods or services until they cancel the agreement. There also are free-to-pay or nominal-fee-to-pay plans: After a trial period, sellers automatically start charging a fee — or increased fee — unless consumers affirmatively return the goods or cancel the services.

Then, Company X, there’s the upsell. Some companies pitch their negative options, seal the deal, then offer an additional product or service for a few dollars more. Or they bundle offers, so two or more products or services may only be purchased together.

The FTC staff work led to passage in 2010 of the Restore Online Shoppers’ Confidence Act, or ROSCA. As you know, ROSCA bans negative option deals unless the seller does the following:

— Clearly and conspicuously discloses all material terms before getting the consumer’s billing information.

— Gets the customer’s express informed consent before making the charge.

— Sets up a simple way to prevent recurring charges.

I’m sure you folks at Company X wouldn’t diminish my consuming experience by failing to comply with the law just to make a few dollars more.

DirecTV incurred the FTC’s wrath by allegedly failing to make clear what the rates were when a nifty introductory offer was up. There apparently was some concern about the fees people were paying to get out of the deal, too.

Your company and others may be watching to see if DirecTV appeals. Or maybe you think it’s better for all businesses to be clear and conspicuous with their offers so we all know where we stand. Please check here if you agree — uh, that’s called affirmative consent.

Have a nice day.

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 https://necontact.wordpress.com or email contacexdir@live.com.

FTC Launches New Resource for Identity Theft Victims

IdentityTheft.gov Helps People Report and Recover from Identity Theft

FOR YOUR INFORMATION

May 14, 2015

The Federal Trade Commission has launched IdentityTheft.gov, a new resource that makes it easier for identity theft victims to report and recover from identity theft. A Spanish version of the site is also available at RobodeIdentidad.gov.

The new website provides an interactive checklist that walks people through the recovery process and helps them understand which recovery steps should be taken upon learning their identity has been stolen. It also provides sample letters and other helpful resources.

In addition, the site offers specialized tips for specific forms of identity theft, including tax-related and medical identity theft. The site also has advice for people who have been notified that their personal information was exposed in a data breach.

Identity theft has been the top consumer complaint reported to the FTC for the past 15 years, and in 2014, the Commission received more than 330,000 complaints from consumers who were victims of identity theft.

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(link is external), follow us on Twitter(link is external), and subscribe to press releases for the latest FTC news and resources.

Unlocking the code – FTC Scam Alert

 

Unlocking the code

by Alvaro Puig
Consumer Education Specialist, FTC

Identity thieves may already have a lot of information about you – like your credit card number, the card’s expiration date, and your name, address, and phone number. With all that information in his hands, why would he call you? He’s after one vital piece of information – the security code on your credit card.

Read more >

Easier to lose money than weight

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT Posted Feb. 22, 2015, at 10:09 a.m.

Here’s a recipe for making millions on unsuspecting consumers. Buy green coffee bean extract from China for about 50 cents per bottle plus shipping, sell each bottle for $30 to $48 and gross an estimated $16 million to $26 million.

To rack up those sales, you’ll need to pass off an unscientific study as “proof” people can lose “an astounding amount of fat and weight” simply by downing your product. Advertise that there’s no need to reduce calories or increase exercise; just swallow the extract along with the seller’s worthless promises. You’ll need some TV promotion to build credibility. An appearance on the “Dr. Oz” show should do the trick. Add a few websites with names that will trigger lots of hits for your wonder product, and you’re on your way.

Dr. Oz scolded at hearing on weight loss scams (click image for FoxDC.com story)

Just don’t get caught. The Federal Trade Commission said last year the “as seen on TV” campaign was false and misleading. In May 2014, the FTC charged NPB Advertising of Tampa, Florida, with making “false and unsupported advertising claims” and with failing to disclose its news sites and testimonials were phony. The case is pending. Then, in September, the FTC charged that Applied Food Sciences of Austin, Texas, used a study it should have known was flawed to make “false and unsubstantiated weight-loss claims” to deceive consumers and sell its extract. The company settled that case for $3.5 million. In September, Dr. Oz announced on his website the study had been retracted. “This sometimes happens in scientific research,” Oz wrote at the time. Last month, the FTC settled charges against Lindsey Duncan and two companies he controls: Pure Health LLC and Genesis Today Inc. Under the settlement, Duncan and his companies have to pay $9 million in consumer redress and refrain from making deceptive claims about green coffee bean extract or any other dietary supplement or drug product. Several critics of the settlement cited a “chilling effect” and voiced fears other manufacturers might hesitate to advertise true claims about products. In a statement, FTC Chairwoman Edith Ramirez said she and the other two commissioners supporting the settlement are “more concerned about other marketers’ incentive to emulate the defendants’ conduct, believing that they will ultimately retain the lion’s share of their ill-gotten gains.” You can review a timeline of the FTC’s actions at nutritionaction.com. On the homepage, look for the article titled “Watch Out for Deceitful Marketing of Dietary Supplements” under “Daily Tips.” Then do a web search for “green bean coffee extract.” We’re betting a wide majority of the 1.58 million hits are still touting weight-loss myths. To lose weight and keep if off, eat fewer calories and increase activity. To learn more about possibly getting some money back if you bought green coffee bean extract, visit the FTC website at consumer.ftc.gov/features/feature-0008-getting-your-money-back.

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 https://necontact.wordpress.com or email contacexdir@live.com.

If Bruce with a foreign accent calls, offers to fix your computer, hang up

CONSUMER FORUM

Posted Feb. 08, 2015, at 3:01 p.m.

You get a call from someone claiming to be from Windows Helpdesk, Windows Service Center, Microsoft Tech Support, Microsoft Support or a similar sounding name.

The caller says he has “detected trouble with your computer” and can help you fix it. Red flags should be flying, because this is one of the most frequently perpetrated scams going. Microsoft warns consumers about these scams and offers tips for spotting fake calls.

The clues are all there. Most callers are heavily accented but give very American-sounding names. They claim your computer is infected with a virus or is operating “with a lot of errors.” They can fix this, they claim, if you’ll only turn over control of your computer to them online and send them a few hundred dollars.

It’s always a scam. No cold-caller could possibly know whether your computer is operating correctly. Those “errors” are typical operating vagaries a scammer tries to make you believe will damage your system if left alone.

Give up control of your computer to someone who calls out of the blue, and you run the risk of having your passwords, financial data and other personal details stolen. Thieves could use that information to drain bank accounts, ruin your credit and steal your identity.

If successful, they’ll probably call back and try to sell you worthless computer security software. Once a scammer succeeds, you can bet your phone number will go on other crooks’ call sheets.

The Federal Trade Commission tried to crack down on the tech support scam, as the crime has become known. In September 2012, the FTC froze the assets of 14 companies working the scam. The agency said the “repair” fees ranged from $49 to $450 and netted thieves tens of millions of dollars from innocent consumers.

That put a few crooks out of business, at least for a while. However, cheap international phone rates and sophisticated dialing programs offer criminals the means to exploit the fears of computer users.

If you let the scammers prattle on, they’ll urge you to open a Microsoft event utility viewer; it’s built into Windows and lists harmless errors legitimate repair people can use to fix operating problems. The crooks point to the “error” and “warning” messages as signs that disaster is about to strike, when in fact the computer may be operating just fine.

The caller might then try to trick you into visiting a phony website and downloading what appears to be a repair tool; in fact, it’s malware that can lock up one or more programs on your computer. The caller may later demand a ransom to allow those programs to work properly again. Or the scammers might install malicious software that turns your computer into a “zombie,” which in turn looks for more computers to infect.

If you receive such a phone call, the best thing to do is hang up. Never buy any software or services from these cold callers. Don’t give them a credit card number or other financial information. And don’t click on links at websites to which you’re directed or in emails they send you. And never turn control of your computer over to anyone other than a known representative of a company with which you already have a business relationship for computer service.

If you have given information, change passwords to your computer, main email service and any financial programs. Do an anti-virus scan to look for malware; if you’re unsure whether the scan has dealt with any problems, you may want to take the computer to a local company you trust to have it thoroughly checked out.

If you’ve shared personal or financial information with a scammer, you may want to place a fraud alert on your credit report. Get details from the Maine Bureau of Consumer Credit Protection, credit.maine.gov, or call 1-800-332-8529 (1-800-DEBT-LAW).

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 https://necontact.wordpress.com or email contacexdir@live.com.

Your phone company is not your friend when it comes to blocking telemarketers

CONSUMER FORUM

Posted Nov. 30, 2014, at 9:15 a.m.

Primus Technologies seems to be a hit with consumers in Canada. Since 2007, the company has offered free blocking of unwanted telemarketing calls.

In a survey, two-thirds of Primus customers say they like Telemarketing Guard, as the program is called. A whopping 87 percent of those surveyed say the big drop in unwanted calls is the main reason they stay with the company.

A lot of U.S. consumers likely would be happy if companies on this side of the border offered a similar service. We have all had our fill of robocalls. Despite tougher rules on such automated calling by the Federal Trade Commission, the pre-recorded automatons still harangue us about better credit, “free” cruises and dangerous falls at home.

Indeed, robocalls lead all categories of consumer gripes. The FTC racks up 150,000-200,000 complaints every month — so many that the agency awarded prize money to computer wizards who came up with the best ways of “Zapping Rachel.” One prize winner is offering a service he calls Nomorobo. It detects when numbers are called in sequence or seconds apart and answers with a robotic voice. If the caller can answer a question, the call goes through; if not, it’s disconnected.

We might think phone carriers would jump at the chance to keep Rachel and her ilk out of our phone lines. The chilling truth is that those carriers see federal rules as standing in the way.

At a recent U.S. Senate hearing, Sen. Claire McCaskill, D-Missouri, said the technology for screening such calls is available. She urged “more pressure on the phone carriers to participate in solving this problem.”

An executive with the U.S. Telecom Association, however, testified his members are bound by law to complete all calls. He said they may not be able to employ call screening or filtering software.

A spokesman for the mobile phone industry said wireless carriers are concerned about “overreaching” and blocking legitimate calls.

The attorneys general of 38 states, including Maine, recently chimed in. They’re urging the FTC to update its Telemarketing Sales Rule in several key ways:

— Ban pre-acquired account information, meaning consumer consent is needed for any transaction.

— Clarify the “negative option” in telemarketing. The attorneys general argue a consumer’s silence or failure to take action and opt out of a certain deal does not necessarily mean a customer agrees with that deal.

— Require telemarketers to keep call records. These could help the attorneys general with enforcement actions.

— Ban or restrict several ways of paying, including money transfers.

In a news release, the attorneys general say they support the intent of the TSR but argue it needs updating to reflect current market practices and lessen the chance for harming consumers. You can read a copy of their letter here.

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 https://necontact.wordpress.com or email contacexdir@live.com.

Phony phone cops bullied US consumers out of millions in bogus debt

CONSUMER FORUM

Posted Nov. 24, 2014, at 9:21 a.m.

Click image to learn more about phantom debt collectors

They make harassing phone calls, claiming that they are law enforcement agents. They threaten to revoke your driver’s license, prosecute you and lock you up. All for debts that aren’t yours.

The National Consumers League says on its website ( www.fraud.org) that thousands of consumers are being bullied into paying debts they don’t owe.

There are many variations, but all scams boil down to one harsh message: wire us money or be in big trouble.

The perpetrator of one such scam received a harsh message last week. A complaint filed by a U.S. attorney in New York charged Williams Scott and Associates of Georgia with scamming $4 million from 6,000 consumers in all 50 states. The complaint charges that over a five-year period, the company had employees pose as police officers, Justice Department officials or FBI agents.

An affidavit filed by a real FBI agent says callers claimed falsely that people owed money for payday loans or had committed fraud.

The affidavit says the scheme involved up to 87 different phone numbers, changing when the scammers realized there were too many complaints. One script seized in an FBI raid includes this exchange between a caller and a frightened woman.

“You think an eight months pregnant woman wants to go to jail?”

“I don’t care if you’re nine months pregnant. I have a job to do.”

When I called Maine’s Bureau of Consumer Credit Protection, principal examiner David Leach was helping a woman whom scammers had tried to dupe.

The scammer had claimed to be from the “Kennebec County Private Locating Service” and said there was legal action pending. When the consumer called the Kennebec County court clerk’s office, she found nothing pending and no record of the “locating service.”

“Scam collectors will do anything to collect money,” Leach told me. He said the fake phone calls “started in Maine sometime in the summer of 2014 and may have peaked somewhere in October.”

However, Leach said this is the most frequent consumer complaint his office deals with.

In some cases, people have taken out payday loans from illegal, unlicensed lenders and repaid the money. The lenders sell their names and other personal information to illegal, unlicensed collectors who then put their defrauding machinery to work.

Consumers may believe these calls are real because the scammers have some personal details about them. If you get such a call, ask for the caller’s name and address, company name and original creditor, if you do have an outstanding loan.

If the caller demands a lot more than you owe, it’s likely a scam. If you have questions about the status of a real loan, hang up and call the number on your loan paperwork.

If you get a call and are uncertain, ask the caller to send a written notice of the debt; then say you don’t want to be called again. That request must be honored, according to the Fair Debt Collection Practices Act.

You can find sample letters drafted by the Consumer Financial Protection Bureau at the “self-help/action letters” tab on our blog ( necontact.wordpress.com).

Some consumers hire an attorney. Giving callers the attorney’s name and number usually stop such calls, when scammers realize the person isn’t an easy target. Report suspicious calls to the Maine Attorney General’s Consumer Protection Division, 1-800-436-2131 or email consumer.mediation@Maine.gov.

Advise the Federal Trade Commission at www.ftc.gov/complaint.

The federal prosecutor says it’s likely that more cases will be brought in the future. He says payday lenders may be among those prosecuted.

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 necontact.wordpress.com or email contacexdir@live.com.

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WABI Interview w/ Wayne Harvey

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