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

Volume 9 - Number 6
June 2010

IN THIS ISSUE

NEWS FLASH

ROBOCALLS. At the FTC’s request, a federal judge has stopped three companies’ allegedly deceptive robocalls, frozen their assets and appointed a receiver to take control of the businesses. AMS, Rapid Reduction, PDMI and their owners allegedly delivered the prerecorded, urgent-sounding messages that claimed the callers were able to negotiate a substantially lower interest rate for credit card holders. People paid up to $1,590 up-front for the promised services but all they got were instructions to pay down their credit card debts early to save money on interest. Read the press release.

PREPAID CALLING CARDS. The FTC has reached its third settlement in its crackdown on fraud in the prepaid calling card industry. Diamond Phone Card, Inc. and its principals must pay $500,000 and not misrepresent the talk time that their cards provide. The FTC alleged that they deceptively marketed calling cards to recent immigrants for calls to a number of international locations. Read the press release.

ROGUE ISP. At the FTC’s request, a district court judge has shuttered 3FN, a rogue internet service provider that distributed spam, spyware, child pornography and other malicious content. A court-appointed receiver will sell the ISP’s seized computer servers and other assets and the operation has been ordered to turn over $1.08 million in ill-gotten gains. Read the press release.

DATABASE MONOPOLY. The FTC wants to restore the competition lost due to the 2009 Dun & Bradstreet acquisition of Quality Education Data. The agency charged that the sale violated the antitrust laws by creating a near monopoly for “K-12 data” --- databases used to market products to educators. According to the FTC’s complaint, the $29 million deal left only one option for companies that use K-12 data when selling products ranging from textbooks to office supplies. Read the press release.

DEVICE DIVESTITURES. The FTC challenged a merger of the world’s two leading suppliers of high-performance scientific measurement instruments, requiring divestitures to preserve competition for three types of devices that can detect toxins in water, food or air. According to the FTC, Agilent Technologies, Inc.’s proposed $1.5 billion purchase of Varian, Inc., would lead to higher prices, less innovation and reduced service for customers of these devices. Read the press release.

CHECKS IN THE MAIL

The FTC has mailed redress checks to thousands of people nationwide who have been defrauded. The checks are valid for 60 days from the date they are issued.

ONLINE PHARMACY. Questions? Call 1-877-789-9497
A total of $159,000 in redress will be distributed among 19,000 people who were cheated by marketers accused of running a bogus online pharmacy that sold “membership packages” to elderly people. The FTC alleged that the defendant, Med Provisions, told people that their online pharmacy could save them 30 to 50 percent on their prescription drug costs. Read the press release.

WORK-AT-HOME. Questions? Call 1-877-678-0676
A total of $95,000 will go to 3,500 people who bought phony business opportunities. The FTC alleged that EDI Healthclaims used mass mailings to offer the bogus opportunity to earn money by electronically processing health-care providers’ medical claims for insurance reimbursement. Read the press release.

TESTIMONY

Senate Committee on Appropriations
Subcommittee on Financial Services and General Government
Discusses the agency’s continuing work to promote competition and protect American consumers, including initiatives to stop fraud targeting financially distressed consumers, protect privacy and prevent anticompetitive practices such as “pay-for-delay” in the pharmaceutical industry. Read the press release.

House Committee on Energy and Commerce
Subcommittee on Commerce, Trade and Consumer Protection
Details the FTC’s support for proposed legislation designed to protect cash-strapped individuals who sell their jewelry and precious metals to online buyers. The FTC supports another bill that would help people who want to avoid buying products containing even small amounts of fur. Read the press release.

Senate Special Committee on Aging
Describes the FTC’s 100 law enforcement actions over the past decade that challenge claims about the effectiveness of a wide variety of supplements, including cold and flu products, weight-loss products and dietary supplements purported to treat serious diseases, including cancer and AIDS. Read the press release.

COMING EVENTS

FTC workshops are free and open to the public; no preregistration is necessary.
Space is limited and attendees are admitted on a first-come basis. A live webcast is available at ftc.gov.

FUTURE OF JOURNALISM. The FTC will hold its final workshop on the future of journalism at the National Press Club in Washington, DC, on June 15. Participants --- journalists, publishers, academics and economists --- will evaluate ideas for sustaining journalism raised at previous workshops. Get more information or file a comment.

NEW MATERIALS FOR CONSUMERS

TEASER SITE. The FTC has created a “teaser” website to warn people searching for loan services about how easy it is to be fooled by scammers charging up-front fees for bogus loans. The site for Esteemed Lending Services, a fictitious lending company, also explains how to spot and avoid loan scams. Visit this site.

TIP OF THE MONTH — FORENSIC MORTGAGE LOAN AUDIT SCAMS

The latest foreclosure rescue scam to exploit financially strapped homeowners pitches forensic mortgage loan audits. In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors or foreclosure prevention auditors backed by forensic attorneys offer to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The “auditors” say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal --- or even cancel your loan.

But there is no evidence that forensic loan audits help homeowners get a loan modification or any other foreclosure relief, even if the audit is conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.

If your constituents are looking for foreclosure prevention help, share these tips with them. Homeowners facing foreclosure should avoid any business that:

  • guarantees to stop the foreclosure process regardless of the circumstances
  • instructs them not to contact their lender, lawyer or credit or housing counselor
  • accepts payment only by cashier’s check or wire transfer
  • encourages them to lease their home so they can buy it back over time
  • recommends that they make their mortgage payments directly to it, rather than their lender
  • urges them to transfer their property deed or title to it
  • offers to buy their house for cash at a fixed price that is inappropriate for the housing market
  • pressures them to sign papers they haven’t had a chance to read thoroughly or that they don’t understand.

Housing experts say that when homeowners get behind on their mortgage payments, maintaining communication with their lender is the most important thing they can do. If a constituent is having trouble paying their mortgage --- or if they’ve received a foreclosure notice --- tell them to contact their lender or servicer immediately. They may be able to negotiate a new repayment schedule. For more information, read the FTC’s alert.

NUMBERS TO KNOW

FTC'S OFFICE OF CONGRESSIONAL RELATIONS: 202-326-2195.

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