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Penn Corner April 2011

Buzz Off

Buzz Off

To settle FTC charges, Google Inc. has agreed to establish and maintain a comprehensive privacy program and submit to biennial audits by independent third parties for the next 20 years to assess its privacy and data protection policies. At issue was whether Google violated its own privacy policy in 2010 when it launched Google Buzz, a social network, and deceived people who used its Gmail service. The FTC alleged that Google failed to get permission from Gmail account holders to use their information to populate Buzz, and that the options Google offered for declining or leaving the social network didn't work.

Lesson Learned

Lesson Learned

Legacy Learning Systems Inc., which sells instructional DVDs, will pay $250,000 to settle FTC charges that the company's affiliate marketers posted glowing endorsements in articles, blogs, and other sites without disclosing they pocketed commissions of between 20 and 45 percent for sales they generated. The FTC alleged that through this affiliate program, Legacy falsely represented — directly or indirectly — that these were independent reviews posted by ordinary consumers and failed to disclose their financial connection to the endorsers. The settlement prohibits Legacy from misrepresenting the financial relationship between the company and product reviewers and requires Legacy to set up a compliance program to monitor its affiliates.

Opt-Out Cop Out

Opt-Out Cop Out

The FTC's settlement with Chitika, Inc. put the brakes on the company's allegedly deceptive practice of tracking people's online activities even after they'd said no to online tracking on Chitika's website. Chitika buys ad space on websites and contracts with advertisers to place "cookies" — small text files — on people's browsers; by placing those cookies, Chitika can track people's activities on the web, and then serve them ads that correlate to their browsing history. The FTC alleged that an "Opt Out" button on Chitika's privacy policy was deceptive: While it activated a message that said, "You are currently opted out," the FTC says that from May 2008 through February 2010, the opt out lasted only 10 days. After that, tracking cookies were put back, in violation of federal law.

Debt Collection Aggression

Debt Collection Aggression

West Asset Management has agreed to pay $2.8 million to settle FTC charges that its aggressive debt collection techniques violated federal law. That's the biggest civil penalty the FTC has ever gotten in a debt collection case. The FTC alleged that the company's debt collectors called people many times a day — often regarding accounts that didn't belong to them — and sometimes used rude and abusive language; illegally disclosed debts to third parties; and ignored people's written requests to stop calling. The settlement permanently prohibits West Asset from using false, deceptive or unfair debt collection tactics. An FTC video, Dealing with Debt Collection, helps explain consumers' rights and debt collectors' responsibilities.

Timeshare Tricksters

Timeshare Tricksters

At the FTC's request, a federal district court has issued a temporary restraining order against a company that made tens of thousands of calls to timeshare owners with claims that they had immediate buyers for their properties. According to the FTC, Vacation Property Services collected advance fees ranging from $200 to more than $8,000 from timeshare owners who later learned there were no prospective buyers. When the owners called to complain, the defendants routinely dodged the phone calls and denied requests for refunds. The FTC is seeking to shut down the scheme and provide refunds to the timeshare owners.

A Year in Review

A Year in Review

Chairman Jon Leibowitz issued The FTC 2011 Annual Report, which highlights the agency's ongoing efforts to protect consumers and promote competition. Over the past year, the FTC has challenged unscrupulous business practices and anticompetitive mergers, shut down shady operations and deceptive marketing campaigns, and protected consumers' privacy and their pocketbooks. The report details the agency's actions in the past 12 months, which have had far-reaching effects in protecting consumers and competition in critical sectors of our economy — from high tech to health care, and financial services to online commerce.

Health-y Competition

Health-y Competition

As part of an interagency effort to implement key provisions of the Affordable Health Care Act, the FTC and the DOJ proposed a new Antitrust Policy Statement to ensure that newly formed collaborative care organizations, known as ACOs, can innovate to improve health care quality and reduce costs without raising competitive concerns. The proposal would create an antitrust "safety zone" for certain ACOs that will serve Medicare patients, and would establish expedited antitrust reviews for others. Public comments on the proposal will be accepted through May 31, 2011.

"When companies make privacy pledges, they need to honor them. This is a tough settlement that ensures that Google will honor its commitments to consumers and build strong privacy protections into all of its operations."

— Jon Leibowitz, FTC Chairman


Workshop Calendar

  • Debt Collection 2.0: On April 28, the FTC will host a public workshop in Washington, DC, to examine how debt collectors are using new technologies and the effect on consumers.

  • "Congratulations! You're a Winner": The FTC will host a public workshop in Chicago, May 2-3, to examine how to protect consumers from lottery, prize, and sweepstakes scams, and other schemes that ask people to use money transfers as the form of payment.

  • Cramming Forum: The FTC will host a forum in Washington, DC, on May 11 to discuss creative ways to prevent people from getting crammed — that is, hit with unauthorized third-party charges on their phone bills. Share your idea or opinion by submitting a comment online by April 27th.

Concerns about Radioactive Iodine

Recent events in Japan have caused a run on potassium iodide pills and drops, which can help prevent thyroid cancer after exposure to radioactive iodine. But experts warn that people should not buy or take potassium iodide unless instructed by a public health official. Learn more

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  • Want to donate money for disaster relief? Before giving money to a charity, check out the FTC's Charity Checklist: http://go.usa.gov/Tq5
  • A message from the IRS could be a warning sign that your Social Security number is being misused by an identity thief: http://go.usa.gov/Tc1
  • Worried about bed bugs? Before buying products or services related to infestations, check out the FTC's new alert: http://go.usa.gov/Tq9

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