FOR THE CONSUMER
The FTC's monthly newsletter for the Congressional community
It's the news you - and your constituents - can use.

Volume 7 - Number 7
July 2008

IN THIS ISSUE

News Flash Coming Events Testimony New and Revised Consumer Publications Tip of the Month — SAFE SUMMER: WE DON’T SERVE TEENS Numbers to Know

NEWS FLASH

CRAMMING.  A U.S. district court has stopped an illegal operation that crammed unauthorized charges for website services onto the phone bills of hundreds of thousands of small businesses and non-profits. The court ordered WebSource Media, L.L.C., and its affiliates to give up more than $4.1 million in ill-gotten gains. The defendants told organizations that there would be no charge or obligation and that their service would be cancelled automatically if the client didn’t approve it.  The defendants also tricked their victims into thinking an employee had authorized the services. Press release: www.ftc.gov/opa/2008/06/websource.shtm.

DECEPTIVE CREDIT CARD MARKETING. The FTC has charged CompuCredit Corporation and its debt collection subsidiary with deceptive marketing practices in selling credit cards to consumers in the subprime market. According to the FTC, CompuCredit failed to disclose up-front fees, misrepresented the amount of credit that would be available immediately, and failed to tell consumers that certain purchases could reduce their credit limit. The FTC also alleges that the company deceptively marketed a debt collection program as a credit card offer.  Press release: www.ftc.gov/opa/2008/06/compucredit.shtm.

PAY DAY LOANS.  Two payday loan lead generators, We Give Loans, Inc. and Aliyah Associates, LLC, have agreed to settle FTC charges that their Internet advertising included payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires.  Generators advertise payday loans and collect information through their websites from consumers. They sell this “lead” information to lenders who then offer payday loans to the consumers. Press release: www.ftc.gov/opa/2008/06/wegiveloans.shtm.

ALCOHOL REPORT. A new FTC report on alcohol marketing examines industry efforts to reduce the likelihood that alcohol advertising will target those under the legal drinking age of 21.  The report discusses where alcohol suppliers spend their promotional dollars; compliance with the industry's advertising placement standard; the status of external review of advertising complaints; and the Commission's education program to reduce teen access to alcohol.  Press release: www.ftc.gov/opa/2008/06/alcoholrpt.shtm.

COMING EVENTS

The following workshops, which are free and open to the public, will be held at the FTC’s Conference Center, 601 New Jersey Avenue, N.W., Washington, DC. A government-issued photo ID is required for entry. Pre-registration is not required.

A workshop on July 15, 2008 will examine the consumer perception of environmental claims for buildings and textiles. There has been an increase in the use of environmental or “green” claims to sell products made from organic cotton and bamboo fiber. In the building market, green claims are being made for a variety of building products from flooring and carpeting to paint, wallpaper, insulation, and windows. Press release: www.ftc.gov/opa/2008/06/greenguides.shtm.

A workshop on September 25, 2008 will examine the growth of for-profit debt relief entities and their effect on consumers and businesses. Consumer advocates, industry representatives, and state and federal regulators will discuss the industry’s advertising and marketing, the role of third-party lead generators, regulatory developments, and consumer education.  Any original research, surveys, and academic papers regarding for-profit consumer debt relief services are welcome; FTC staff must receive them by August 15.  Press release: www.ftc.gov/opa/2008/06/debt.shtm.

ON THE ROAD

CONTACTLESS PAYMENT. The FTC and the Technology Law and Public Policy Clinic at the University of Washington Law School will host a one-day Town Hall meeting to explore the consumer protection implications of contactless payment devices. The Town Hall, which is free and open to the public, will be held July 24, 2008, in Room 133 of the University of Washington School of Law William H. Gates Hall, 15th Avenue NE & NE 43rd Street, Seattle. Contactless payment devices allow consumers to make low-cost purchases by using smart cards, key fobs, or mobile phones enabled with radio frequency identification ("RFID") technology. For more information, visit www.ftc.gov/opa/2008/05/payonthego.shtm.

DATA SECURITY. The FTC and the California Office of Privacy Protection will co-host a half-day, free public workshop in Los Angeles on how businesses can secure personal information and protect the privacy of consumers and employees. The workshop features business people, attorneys, government officials, privacy officers, and other experts who will provide practical guidance for businesses of all sizes on data security, privacy, best practices for developing an appropriate data security program, and how to respond to data breaches and other privacy and security problems. It will be held Wednesday, August 13, 2008, in the Ronald Reagan State Building. For more information, visit www.ftc.gov/infosecurity.

TESTIMONY

SPYWARE.  The FTC testified before the Senate Committee on Commerce, Science, and Transportation about spyware and legislation giving the agency authority to get civil penalties in spyware cases. The testimony notes that since 2004, the FTC has brought 11 spyware-related cases, which reaffirm three key principles:  a computer --- and the choice to install software --- belongs to the consumer, not to the software distributor; spyware downloaders cannot bury disclosures of material information needed to correct otherwise misleading impressions; and if a distributor puts a program on a computer, a consumer should be able to uninstall or disable it.  Press release: www.ftc.gov/opa/2008/06/spyware.shtm.

NEW AND REVISED CONSUMER PUBLICATIONS

CHARITABLE DONATIONS: GIVE OR TAKE? Offers tips to help make sure the money you contribute will support a worthwhile cause. 8.5"x11", 4 pages. www.ftc.gov/bcp/edu/pubs/consumer/telemarketing/tel01.shtm

NEW 'RED FLAG' REQUIREMENTS FOR FINANCIAL INSTITUTIONS AND CREDITORS WILL HELP FIGHT IDENTITY THEFT.  Explains regulations requiring financial institutions and creditors to develop and implement written identity theft prevention programs. 8.5"x11", 2 pages. http://business.ftc.gov/documents/alt050-new-red-flag-requirements-financial-institutions-and-creditors-will-help-fight-identity .

TIP OF THE MONTH — SAFE SUMMER: WE DON’T SERVE TEENS

Because summer is a time when teen drunk-driving deaths peak and teens are at high risk of starting to drink, the FTC is urging adults around the nation to say “Let’s Make it a Safe Summer. Don’t Serve Alcohol to Teens.” The FTC has launched its “Safe Summer” campaign with a website, www.dontserveteens.gov/safesummer.html, that provides information about underage drinking and camera-ready campaign materials that warn against it. Web banners and buttons, downloadable posters and public service announcements, and sample letters to the editor and opinion pieces are included.

Since the national legal drinking age has been 21, teen drinking has fallen by 25 percent. Despite this achievement, alcohol remains the most widely abused substance among U.S. teens, according to a report by the U.S. Surgeon General released last fall.  Most teens who drink alcohol get it from family members or friends. While the dangers of teen drinking are well documented, many myths persist, and parents may feel pressured by their teenagers and by other adults to look the other way. 

Over the past two years, the We Don’t Serve Teens program has received tremendous assistance from its public and private partners. In 2007, the campaign generated 1.1 billion advertising impressions with a market value of over $9 million, and was recognized by the U.S. Senate and officials from 40 states.

To learn more, visit www.dontserveteens.gov/safesummer.html.

NUMBERS TO KNOW

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