Legal Library: Cases and Proceedings

In February 2022, the FTC took action in federal court against a Florida-based group of defendants it alleges called hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” using deceptive telemarketing tactics. According to the FTC complaint, American Vehicle Protection Corp. and related defendants bilked consumers out of more than $6 million over the last four years.  Under the terms of proposed court orders, three companies and their owners that were charged by the FTC with running the operation that scammed consumers out of millions of dollars would be permanently banned from participating in the extended automobile warranty market, as well as from any further involvement in outbound telemarketing. An additional court order announced in July 2023 bans an additional corporate defendant and its owner.

The Federal Trade Commission is sending more than $449,000 in refunds to consumers who were harmed by American Vehicle Protection Corp., which engaged in a telemarketing scam that involved calling hundreds of thousands of consumers nationwide to pitch expensive “extended automobile warranties” using deceptive telemarketing tactics.

In January 2023, the FTC issued an order requiring Ohio-based LCA-Vision, doing business as LasikPlus and Joffe MediCenter, to pay $1.25 million for using deceptive bait-and-switch advertising to trick consumers into believing they could have their vision corrected for less than $300. The order also bans the defendants from making the misrepresentations detailed in the complaint. The Commission approved the final consent order in March 2023. In October 2024, the FTC announced it was returning $1.1 million to defrauded consumers.

In October 2022, a Latvian payment processor and its former CEO agreed to settle the FTC’s complaint against them. The complaint alleged that they engaged in unlawful conduct that enabled a deceptive “free trial” offer scheme by U.S.-based defendants. In September 2024, the FTC returned more than $2.8 million to consumer deceived by the scheme.

The FTC alleged that CafePress failed to implement reasonable security measures to protect sensitive information stored on its network, including plain text Social Security numbers, inadequately encrypted passwords, and answers to password reset questions. The Commission’s proposed order requires the company to bolster its data security and requires its former owner to pay a half million dollars to compensate small businesses.

The FTC is sending payments totaling more than $370,000 to consumers who were harmed by the data security failures of online merchandise platform CafePress.

The Federal Trade Commission filed an administrative complaint and authorized a federal court lawsuit to block Illumina’s $7.1 billion proposed acquisition of Grail—a maker of a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. Illumina is the only provider of DNA sequencing that is a viable option for these multi-cancer early detection, or MCED, tests in the United States.

The complaint alleges the proposed acquisition will diminish innovation in the U.S. market for MCED tests, which could be used to detect up to 50 types of cancer. Most of these types of cancer are not screened for at all today, and the MCED test could save millions of lives around the world. The trial began on Aug. 24, 2021. On May 20, 2021, the FTC authorized staff to dismiss its federal court complaint for Preliminary Injunction and Temporary Restraining Order.

In April 2023, the Commission issued an opinion and order reversing the Administrative Law Judge’s dismissal of the proceeding and requiring Illumina to divest Grail. In June 2023, Illumina petitioned the Fifth Circuit to review the Commission’s order and opinion, and the Fifth Circuit heard arguments in the case in September 2023.  

On December 15, 2023, the Fifth Circuit issued an opinion in the case finding that there was substantial evidence supporting the Commission’s ruling that the deal was anticompetitive. The Fifth Circuit vacated the Commission’s order and remanded it for further proceedings based on the standard the Commission applied when reviewing one aspect of Illumina’s rebuttal evidence. On December 17, 2023, Illumina then announced it would divest Grail.

As a result of a June 2024 settlement with the FTC, the operators of a sweepstakes scam that cost consumers millions agreed to settlements that permanently ban them from operating sweepstakes or making claims to consumers about prizes they have won or may win. The FTC first filed its complaint against Matthew Pisoni, Marcus Pradel and John Leon in 2015, alleging that they helped operate a sprawling sweepstakes operation that took more than $28 million from consumers throughout the United States and other countries In August 2024, the Commission announced the settlement with another individual defendant in the case, Victor Ramirez.

In September 2023, the FTC announced online shoe retailer Hey Dude, Inc. (Hey Dude) will pay $1.95 million to settle charges that the company misled consumers by suppressing negative reviews, including more than 80 percent of reviews that failed to provide four or more stars out of a possible five. The FTC also contends the company violated the Commission’s Mail, Internet, or Telephone Order Merchandise Rule in several ways between 2020 and 2022. In August 2024, the FTC announced it was returning $1.9 million to defrauded consumers.