News Flash Coming Events New Consumer Publication Tip of the Month --- DECEPTIVE MORTGAGE ADS Numbers to Know

NEWS FLASH

INVENTION PROMOTION. A federal court has ordered the operators of an invention promotion business to pay $60 million for violating a 1998 court order that barred them from lying about the services they offered to amateur inventors. According to the FTC, the operators revived their scam under a new name, the Patent & Trademark Institute (PTI), failed to keep their promises to evaluate the marketability and patentability of inventors’ ideas, and help them get commercial licenses for their products. Press release: www.ftc.gov/opa/2007/09/inventionswindle.shtm.

DIALYSIS CLINICS: The FTC challenged the merger of two dialysis clinic operators that would have closed two clinics in the Warwick/Cranston, Rhode Island, area. The FTC said that the merger agreement was an illegal payment to a competitor for leaving the market. Press release: www.ftc.gov/opa/2007/09/dialysisclinic.shtm.

BIOTAPE. Two marketers of an alleged pain relief product have settled FTC charges that the product deceptively provided significant permanent relief from severe pain. The settlement requires Biotape, Smart Inventions, Inc., and Jon Nokes to pay up to $2.5 million in refunds to consumers who bought Biotape. A federal district court ruled that a third defendant must give up $86,000. Press release: www.ftc.gov/opa/2007/09/biotape.shtm.

CONSUMER REFUNDS. The FTC will accept refund requests from consumers who bought CortiSlim or CortiStress until October 27. The FTC charged that the products were advertised with false and unsubstantiated claims. The settlement of those charges includes money for consumer refunds. Consumers who bought CortiSlim or CortiStress between August 1, 2003, and May 31, 2006, can ask for a refund using a claim form at www.CortiSlimsettlement.com or by calling 1-800-560-6532 to get a claim form. Consumers must complete, sign, and mail back the claim form to the Claims Administration Center. Press release: www.ftc.gov/opa/2007/09/corti.shtm.

COMING EVENTS

DEBT COLLECTION PRACTICES. The FTC will host a workshop October 10-11 to examine how changes in the debt collection industry have affected consumers and businesses. Consumer advocates, industry representatives, and regulators will discuss the way technology and economic trends have changed how consumer debts are collected, and the extent to which the law has kept pace with developments during the past 30 years. The workshop is free and open to the public; it will be held at the FTC’s Conference Center, 601 New Jersey Avenue, NW, Washington, DC. Press release: www.ftc.gov/opa/2007/03/fdcpawkshop.shtm

GREEN LIGHTS & RED FLAGS. The FTC and local partners in Houston will host a one-day “back to basics” workshop on complying with truth-in-advertising laws on October 25. "Green Lights & Red Flags: FTC-BBB Rules of the Road for Advertisers" features a roster of national experts discussing the latest developments in advertising law for attorneys, business owners, and marketing executives. The workshop will be held at the Houston Club, 811 Rusk Avenue, 10th Floor, Houston, Texas from 8:30 am to 12:45 pm. The admission fee of $70 includes breakfast, lunch, and a CD of all workshop materials. It has been approved for 3.75 hours of Texas CLE credit. To register, visit www.bbbhou.org or www.ftc.gov/greenlights or call the BBB at 713 341-6147. Press release: www.ftc.gov/opa/2007/09/houstonbbb.shtm.

COOKIES, CRUMBS, AND CLICKS. The FTC will host a two-day Town Hall for consumer advocates, technology experts, and academics to address the consumer protection issues raised by the practice of "behavioral advertising," the tracking of consumers’ activities online to target advertising that reflects the consumer’s interests. Behavioral advertising involves the collection of information such as the searches the consumer has conducted, the webpages visited, and the content viewed. The Town Hall, which is free and open to the public, will be held November 1-2, 2007 at the FTC Conference Center at 601 New Jersey Avenue, N.W., Washington, DC. Press release: www.ftc.gov/opa/2007/08/ehavioral.shtm

NEW CONSUMER PUBLICATIONS

SOCIAL NETWORKING SITES: A PARENT'S GUIDE. Brochure urges parents and kids to talk about the risks involved in using social networking sites, and offers tips for using sites safely and resources for more information. 8.5" x 11", 4 pages. www.ftc.gov/bcp/edu/pubs/consumer/tech/tec13.pdf

¡OJO! FTC RESOURCES FOR HISPANIC COMMUNITIES. October 2007 issue of bilingual Hispanic outreach newsletter covers online security issues like spyware, spam, phishing, and social networking sites. 8.5"x11", 4 pages, color. www.ftc.gov/bcp/edu/pubs/newsletters/ojo/0303.pdf

TIP OF THE MONTH – DECEPTIVE MORTGAGE ADS
What They Say, What They Leave Out

If you’re looking for a mortgage to buy a home or refinance an existing loan, you may see or hear ads with offers of low rates or payments. Some of these ads look like they’re from your mortgage company or a government agency. While the offers are tempting, some are terribly flawed: they don’t disclose the true terms of the deal. The FTC says that when you’re shopping for a home loan, it’s important to understand all its terms and conditions. Read what’s between the lines of the ad and learn to recognize the buzzwords that should trigger follow-up questions.

• What does"Low Fixed Rate" mean? How long will it be “fixed?” What about "very low rates" --- does that mean a “payment rate" or the "interest rate"? What's the difference?
• Did you know that if the payment rate is less than the interest rate, you won’t be covering the interest due. This is called “negative amortization.” It means that your loan balance is actually increasing because you’re not paying all the interest that comes due, and the lender is adding the unpaid interest to the balance you owe.
• Sometimes a "very low payment" might only mean that the offer is for an Interest Only loan. Your payment may go up after an introductory period, so that you would be paying down some of the principal --- or you may end up owing a “balloon” payment, a lump sum usually due at the end of a loan. You must come up with the money when a balloon payment is due. If you can’t, you may need another loan, which, in turn, means new closing costs, and potentially points and fees. And if housing prices are falling, you might not be able to refinance to lower your payments.

To learn more about what the ads say --- and what they leave out --- visit www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt023.shtm.

NUMBERS TO KNOW

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

Check out the CONGRESSIONAL RESOURCES portion of our website at
www.ftc.gov/ftc/congress.htm. No password needed to access.

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