Federal Trade Commission
The Federal Trade Commission (FTC) settled with Amazon for $61.7 million, resolving charges it withheld some customer tips from Amazon Flex drivers. One hundred percent of the $61.7 million will be used to provide the drivers restitution.
The FTC released its Consumer Sentinel Network Data Book 2020. Consumers filed more than 2.1 million fraud reports in 2020 reporting losses of $3.3 billion, up from $1.8 billion in 2019. Thirty-four percent of consumers reported losing money, up from 23 percent in 2019. Romance scams, the majority reported by consumers 50 years and older, resulted in the highest reported fraud losses: $304 million, representing a six-fold increase over the last five years.
The FTC finalized a settlement with Zoom Video Communications, Inc. over allegations it misled consumers about the level of security provided for Zoom meetings and compromised the security of some Mac users. The final order requires Zoom to implement a comprehensive security program, review any software updates for security flaws prior to release, and ensure the updates will not hamper third-party security features.
The FTC took action to stop two Nevada companies from charging consumers thousands of dollars to open credit cards to pay for training schemes. Consumers were led to believe that they were receiving training to obtain funding to become a real estate investor, however Seed Consulting, LLC merely applied for numerous credit cards for each consumer, a practice known as “credit stacking.” Under the proposed settlement, Seed, Credit Navigator, LLC, and their shared owner and directors will be required to pay $2.1 million to be distributed to victims.
The FTC approved a settlement with an emergency travel services provider related to alleged data security failures. The settlement requires SkyMed International, Inc. to notify consumers affected by a 2018-2019 data breach and implement corrective procedures.
The FTC settled charges regarding an alleged sham health insurance scheme. The settlement is with Candida Girouard, the Chief Compliance Officer for Simple Health Plans LLC. The FTC alleges the company collected more than $195 million by enrolling American consumers in an allegedly worthless association and discount memberships with limited benefits, leaving tens of thousands of consumers uninsured, some stuck with thousands of dollars in unpaid medical bills.
The FTC announced that it will send $4.7 million in refunds to victims of the Digital Altitude business coaching scheme. Rather than providing coaching on how to make purchasers’ online businesses successful, the coaches were allegedly merely salespeople selling higher membership levels in the scheme. Payments will be made to more than 10,000 people and average $456.
The FTC settled charges that a payday lender made unauthorized customer bank account withdrawals and committed other deceptive practices. The defendants operated as Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending, and have agreed to be banned from future lending of any kind and to cancel outstanding loans. The settlement includes a $114.3 million monetary judgment which is partially suspended due to inability to pay.
The FTC announced that a publisher will pay more than $2 million to settle FTC charges that it targeted seniors with phony diabetes cure and money making schemes. The publications by Agora Financial, LLC included The Doctor’s Guide to Reversing Diabetes in 28 Days, a book which falsely claimed type 2 diabetes is caused by electronic devices and can be permanently cured in 28 days using certain natural cures. It also published Congress’s Secret $1.7 Trillion Giveaway, a book that falsely promised it would show how to claim hundreds of thousands of dollars in “Congressional Checks” or “Republican Checks.”
The FTC will hold a virtual workshop exploring Digital “Dark Patterns” on April 29, 2021. The “Bringing Dark Patterns to Light: An FTC Workshop” will explore the ways in which user interfaces can have the effect, intentionally or unintentionally, of obscuring, subverting, or impairing consumer autonomy, decision-making, or choice.
Other Federal News
The Center for Disease Control and Prevention’s (CDC) nationwide temporary residential eviction moratorium has been extended, effective January 31, 2021, through March 31, 2021 by virtue of 86 Fed. Reg. 8020 (the Order). The original temporary eviction moratorium, which was published on September 4, 2020, expired on January 31, 2021. In addition to extending the eviction moratorium to March 31, 2021, the Order now applies to American Samoa which had reported no cases when the original order was issued. The eviction moratorium will be enforced by the U.S. Department of Justice and cooperating state and local authorities.
The Consumer Product Safety Commission (CPSC) imposed a $7.95 million civil penalty on exercise equipment manufacturer Cybex International, Inc. for failing to report serious injuries involving its equipment. Cybex had received more than 100 reports of broken parts and serious injuries involving its Arm Curl and Smith Press machines but did not notify the CPSC immediately of the defects or risk. Injuries included reports of permanent vision loss, paralysis, and spinal fracture.
The U.S. Food and Drug Administration (FDA) warned 10 companies for allegedly illegally selling dietary supplements claiming to treat depression and other mental health disorders.
The Department of Homeland Security (DHS) announced the seizure of approximately 11 million counterfeit 3M respirator masks. DHS notified about six thousand suspected victims of the fraud, in at least 12 states, including hospitals, medical facilities and others who may have purchased medical masks from illicit dealers, urging them to immediately stop using the masks and to contact DHS.
The U.S. DOJ Antitrust Division obtained a guilty plea to price fixing from Pilgrim’s Pride Corporation (Pilgrim’s), one of the nation’s largest chicken producers. Pilgrim’s is the first company to plead guilty for its role in a conspiracy to fix prices and rig bids for broiler chicken products. Ten executives and employees at major broiler chicken producers have also previously been charged.
The U.S. Department of Justice announced that an Indian cancer drug manufacturer has agreed to plead guilty and pay $50 million for concealing and destroying records in advance of a U.S. Food and Drug Administration (FDA) inspection. The government alleged that in 2013, the company, Fresenius Kabi Oncology Limited, removed files and deleted computer records that would have shown the company’s manufacturing processes violated FDA requirements.
Other articles in this edition include: