Legal Library: Cases and Proceedings

The operators of a work-from-home scheme and the CEO of their main affiliate marketing network agreed to pay nearly $1.5 million to settle Federal Trade Commission allegations that they used misleading spam emails to lure consumers into buying work-from-home services. 

In their complaint against Madera Merchant Services and B&P Enterprises, the Federal Trade Commission and the Ohio Attorney General allege that the companies generated and processed remotely created payment orders (RCPOs) or checks that allowed many unscrupulous merchants, including deceptive telemarketing schemes, to withdraw money from their victims’ bank accounts. The FTC’s Telemarketing Sales Rules (TSR) specifically prohibits the use of RCPOs in connection with telemarketing sales. The court issued temporary restraining orders against Madera Merchant Services and B&P Enterprises, halting their operations and freezing their assets. The defendants and the FTC have agreed to a stipulated Preliminary Injunction in this matter. The defendants agreed to a settlement with the FTC in 2020 that permanently banned them from payment processing.

HyperBeard, a developer of apps that are popular with children has agreed to pay $150,000 and to delete personal information it illegally collected from children under 13 to settle Federal Trade Commission allegations. In a complaint filed by the Department of Justice on behalf of the FTC, the Commission alleges that HyperBeard, Inc. violated the Children’s Online Privacy Protection Act Rule (COPPA Rule) by allowing third-party ad networks to collect personal information in the form of persistent identifiers to track users of the company’s child-directed apps, without notifying parents or obtaining verifiable parental consent. The ad networks used the identifiers to target ads to children using HyperBeard’s apps.

New York City car dealer Bronx Honda and its general manager, Carlo Fittanto, will pay $1.5 million to settle Federal Trade Commission charges they discriminated against African-American and Hispanic car buyers and engaged in numerous other illegal business practices.

According to the FTC’s complaint, the defendants told sales people to charge higher financing markups and fees to African-American and Hispanic customers. The defendants told employees that these groups should be targeted due to their limited education, and not to attempt the same practices with non-Hispanic white consumers. According to the complaint, African-American and Hispanic customers paid more for financing than similarly situated non-Hispanic white consumers.

The FTC entered into a settlement with the operators of LendEDU.com to resolve allegations that LendEDU falsely claimed that the website provided “objective,” “accurate,” and “unbiased” information about consumer financial products, such as student loans, personal loans, and credit cards, when in fact they offered higher rankings and ratings to companies that paid for placement.

In October 2019, the Florida-based marketers and sellers of two aloe vera-based supplements agreed to settle FTC charges that they deceived consumers with false and unsupported claims that two products, TrueAloe and AloeCran, were effective treatments for a range of conditions affecting seniors, including chronic pain, ulcerative colitis, diabetes, and acid reflux. The court order resolving the complaint prohibits the sellters from making false and unsubstantiated health claims and requires them to pay $537,500. In May 2000, the FTC announced it was sending checks totaling more than $470,000 to consumers who bought the two supplements.

Tapplock settled FTC allegations that it deceived consumers by falsely claiming that its Internet-connected smart locks were designed to be “unbreakable” and that it took reasonable steps to secure the data it collected from users.

The Federal Trade Commission is sending refunds to individuals who lost money to a company called I Works, which operated deceptive "trial" memberships and bogus government-grant and money-making schemes in 2010. 

The Federal Trade Commission authorized an action to block Evonik Industries AG’s proposed $625 million acquisition of PeroxyChem Holding Company, alleging the merger of the chemical companies would substantially reduce competition in the Pacific Northwest and the Southern and Central United States for the production and sale of hydrogen peroxide, a commodity chemical used for oxidation, disinfection, and bleaching.