Archive for the ‘FTC’ Category

Beware of phony subscription offers


Posted Aug. 16, 2015, at 1:33 p.m.

Click image to read FTC tips

The Wall Street Journal’s website includes a caution to readers about new subscriptions and renewals. It notes that certain shady types pretend to represent the publication when their real purpose is simply to rip people off.

The open letter from Christina Komporlis, head of circulation service for Dow Jones & Company, says fraudulent offers came from companies called National Magazine Services, Orbital Publishing and Publishers Billing Exchange. She says none of those entities has any connection with The Wall Street Journal or Barron’s Magazine.

The website further cautions readers not to disclose personal or financial information — especially bank account or credit card data — to anyone from those companies. Komporlis writes she would appreciate having such fraudulent correspondence forwarded to her at

The Wall Street Journal encourages people with questions to call, so I did. A nice customer service rep told me the publishers posted the notice to encourage caution among readers when renewing their subscriptions. He said consumers are urged to use credit cards, because people who have been scammed and sent checks to the scammers seldom get their money back.

The scam can work in a couple of ways. Crooks can offer a ridiculously low renewal rate, prompting consumers to think they’re getting a great deal — in fact, they’ll get nothing for this “bargain.” On the flip side, scammers may send a renewal notice including a rate that’s much higher than the real price.

Northeast CONTACT recently heard from a Maine consumer who unsuccessfully tried for a refund. She paid for two renewals only to find out the craft magazines had stopped publishing. A full year later, a website still was advertising that the defunct magazines could be ordered.

Words to the wise subscriber come from a variety of consumer advocates. The messages are all the same:

— Read solicitations carefully. If they ask you to send money to an address other than that listed in the magazine’s masthead — publication information inside — be wary. This is not always a deal-breaker, however. Some magazines use outside companies, so call your magazine directly — NOT the number on a mailing you suspect is a scam — to verify the collection firm.

— Look for misspellings. Scammers aren’t the best with grammar, either. Their errors can tip you off that an offer is not legitimate.

— Beware of higher prices and longer-than-normal subscription periods. Our chief caseworker is leery of any offer that’s longer than one year.

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 or email


How to keep track of latest scam tactics


Posted Aug. 09, 2015, at 1:32 p.m.

At some point, you’ve likely received an email from someone you know who claimed to be trapped in a foreign country and needed you to wire money immediately.

If your scam-sensing radar was well tuned, you deleted that message without another thought. However, a friend or relative may not be so aware of the ways of scam artists. That friend or relative could benefit from the Federal Trade Commission, or FTC, series of scam alerts.

These periodic messages cut to the chase with language similar to this: “Government agencies will never ask you to pay by wiring money. Neither will legitimate businesses. If someone insists you pay by wiring money, it’s a scam. Don’t do it.”

That alert was issued last Wednesday on the FTC’s website, The gold-colored button on the homepage takes you to a series of alerts on all sorts of things every informed consumer should know.

Another recent scam alert was headlined “It’s not the FTC calling about the OPM breach.” There was widespread news coverage of the data breach at the federal Office of Personnel Management, which left more than 21 million current and former federal employees wondering whether their identity was at risk. Scammers use that coverage and those fears to give credibility to their fake phone calls, saying the FTC is offering money to breach victims if they’ll just give up some personal information.

A couple of facts are worth noting here. The FTC does not call to ask for personal data, and the agency does not hand out money, either. It will accept your written or phoned complaint about such hoaxes; that reporting could help investigators put a stop to at least some of the impostor scams and other phishing attempts that put millions of citizens’ identities at risk.

Scam alerts also have dealt with people who pose as friends in an effort to separate you from your money. They may create phony online identities using stolen pictures and profess their love; it’s not long until they’re hitting up their victims for “loans” to deal with fabricated “emergencies.” They’ll always ask you to wire the money — so that it can’t be traced.

Scammers have found creative ways of posing as customer service people who try not to arouse suspicion when they ask you for personal or financial information. Say you have a question for a major retailer but can’t find a phone number; you do a Web search, and several toll-free numbers appear. A closer look at the territory above and to the right of the search results reveals some look-alike names that belong not to your retailer but to a scam artist waiting for your call.

Do your friends and family a favor by sharing the FTC’s scam alerts with them. You can find them under the “education” tab on our blog: Educating yourself and those close to you is the best single step you can take to fight fraud.

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 or email

Feds say LifeLock broke online data security promises


Posted July 26, 2015, at 2:39 p.m.
The commercials seemed reassuring.

They led viewers to believe LifeLock could keep consumers’ sensitive data as safe as some financial institutions. Last week, the Federal Trade Commission called such claims deceptive and told LifeLock executives to stop making such claims.

In fact, the FTC told LifeLock the same thing back in 2010. That’s when the company, FTC and 35 state attorneys general — including Maine’s — reached a settlement requiring LifeLock to stop making deceptive claims, to tighten up the way it safeguards the information it collects from consumers and to pay $12 million in refunds to consumers.

Last week, the FTC filed documents with the U.S. District Court for the District of Arizona. The agency claims the documents prove LifeLock violated the 2010 order by falling short in three areas:

— Failing to protect customers’ sensitive data.

— Falsely advertising that it used the same high-level safeguards as financial institutions to safeguard those data.

— Failing to meet recordkeeping requirements set forth in the 2010 order.

Jessica Rich, director of the FTC’s Bureau of Consumer Protection, doesn’t have much of a sense of humor when she thinks agreements aren’t being followed.

“It is essential that companies live up to their obligations under orders obtained by the FTC,” she said. “If a company continues with practices that violate orders and harm consumers, we will act.”

The Associated Press quoted a LifeLock spokesman as saying the FTC actions relate to past practices and that the company is prepared to defend itself in court. LifeLock says it has been talking and cooperating with the FTC for the past year and a half.

The documents filed with the court are sealed, so we don’t know what information the FTC has to back up its claims. The court will decide which documents would be unsealed.

Consumers still need to decide how best to protect their sensitive data. Some may feel paying LifeLock or a similar company amounts to money well spent. Others may feel they can do the best job of keeping an eye on their own credit card statements, getting their free annual credit reports and doing everything else necessary to keep their personal and financial data secure.

Consumer Reports advises that, whatever consumers do, they should act fast if they discover their Social Security numbers have been accessed. Consumer Reports advises putting a security freeze on credit reports with the three major reporting agencies: Equifax, Experian and Trans Union. That would keep creditors from accessing your file if a crook tries to open a new account in your name — without that access, creditors are likely to deny the application.

If you’re not a victim of identity theft, the freeze should cost no more than $6, according to a change in the law approved during the last session of the Maine Legislature. If your identity has been stolen, there is usually no charge to freeze your account.

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 or email

Send flowers, not other people’s credit card numbers


By Russ Van Arsdale, executive director Northeast CONTACT
Posted May 31, 2015, at 2:26 p.m.

Until a couple of years ago, Florists’ Transworld Delivery Inc. and were affiliated companies. Now they’ve settled charges by the Federal Trade Commission that they engaged in misleading advertising and billing.

Maine is among 22 states that took legal action against the companies. A big part of the investigation focused on accusations that the companies used “negative option marketing” to snag customers who didn’t know what they were buying. Investigators looked at tactics, including subscriptions to Classmates that renewed automatically.

The probe also looked at the companies’ dealings with third-party marketers, including travel rewards programs, insurance plans and discount buying clubs, whose ads would “pop up” during transactions.

The states charged that Classmates and FTD shared consumers’ personal information, including credit card numbers. This practice, known as “data pass,” allowed customers to be charged for third-party offers if they did not opt out.

Congress put an end to data pass in Internet dealings by approving the Restore Online Shoppers’ Confidence Act in 2010.

In reaching the settlement, which will cost the two firms $11 million, FTD and Classmates admit no wrongdoing. FTD officials say they voluntarily stopped a third-party marketing program in early 2010.

Classmates also denied any wrongdoing. Part of the settlement statement deals with the companies’ denial: “The defendants are confident that if any of the alleged misconduct were to be litigated, the defendants would prevail on each and every claim asserted by the plaintiffs. However, to avoid the substantial burden and expense on the defendants that would result from continued investigation into these issues or litigation, the defendants have elected to resolve this matter through a consensual resolution.”

In the future, both companies say they will keep customers’ information from being passed on to third-party marketers without the consent of those customers.

Classmates also said it would work to make it easier for customers to end their subscriptions.

Both firms must be clear whether membership programs they may offer are their own or those of third parties. They also can’t use terms including “free” or “risk free” if a program will switch to a paid subscription.

Part of the settlement includes $3 million set aside by Classmates for refunds to customers who had signed up and later had problems canceling.

FTD will pay $8 million to the 22 states, including Maine, involved in the suit.

Maryland Attorney General Brian Frosh used the announcement of the settlement to caution people. “Consumers should always carefully review service agreements and other add-on offers when making a purchase to ensure there are no strings attached,” Frosh said in a statement.

Consumers are advised that, to be eligible for restitution from Classmates, they must have purchased subscription services from the company between Jan. 1, 2008, and May 26, 2015

The deadline to file claims is Aug. 24. Mainers may file through Classmates or with the Maine Attorney General by writing to 6 State House Station, Augusta, ME, 04333, or by going online at If consumers have questions, they may call the Maine attorney general’s office at 1-800-436-2131.

Businesses and consumers can expect more enforcement actions in the future. FTC Guardian is a Georgia-based company — not affiliated with the Federal Trade Commission — which has suggestions for other entities that do online marketing. You can read this company’s advice at

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 or email

The perils of not reading terms, conditions


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 or email

FTC Launches New Resource for Identity Theft Victims Helps People Report and Recover from Identity Theft


May 14, 2015

The Federal Trade Commission has launched, 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

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 >


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