Legal Library: Cases and Proceedings

In February 2023, the FTC sued to stop an interconnected web of operations responsible for delivering tens of millions of unwanted VoIP and ringless voicemail phony debt service robocalls to consumers nationwide. DOJ filed the complaint in federal court on the FTC’s behalf. The DOJ also filed a proposed consent order against one of the companies and individuals involved in the operation, which would, if approved by the court, bar them from making further misrepresentations about debt relief services and ordering them to comply with the TSR.

The Federal Trade Commission is cracking down on the Warrior Trading day trading investment scheme for making misleading and unrealistic claims of big investment gains to consumers. The FTC alleges that Warrior Trading and its CEO, Ross Cameron, used those claims to convince consumers to pay hundreds or thousands of dollars for a trading system that ultimately failed to pay off for most customers.

As a result of the FTC’s case, Warrior Trading will be required to pay $3 million to refund consumers and will be prohibited from making baseless claims about the potential for consumers to earn money using their trading strategies.

The Federal Trade Commission is sending payments totaling more than $2.9 million to 20,402 people who paid thousands of dollars for Warrior Trading’s investment programs. The company made misleading and unrealistic claims to sell a day trading “system” that failed to pay off for most customers.

The U.S. Department of Justice, on behalf of the Federal Trade Commission, and the Wisconsin Attorney General, filed suit against Consumer Law Protection and related companies, along with their owners and operators, Christopher Carroll, George Reed, Louann Reed, Scott Jackson, and Eduardo Balderas for scamming consumers—mostly older adults—out of more than $90 million in a massive timeshare exit scam.

The Federal Trade Commission is taking action against DK Automation and its owners, Kevin David Hulse and David Shawn Arnett for using unfounded claims of big returns to entice consumers into moneymaking schemes involving Amazon business packages, business coaching, and cryptocurrency. The FTC’s complaint alleges that the defendants promised consumers that they could “generate passive income on autopilot” when the truth was that few consumers ever made money from these schemes.

A proposed court order would require the defendants to turn over $2.6 million to be used to refund consumers harmed by their deception, as well as requiring them to stop their deceptive earnings pitches and follow the law.

The FTC sued F & G International Group Holdings, LLC, FG International, LLC, and their principal J. Glenn Davis, alleging they make false or unsubstantiated R-value claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power. In October 2022, the FTC announced a summary judgment prohibiting the FGI defendants from the allegedly illegal conduct.

The Federal Trade Commission sued SPM Thermo-Shield, Inc., and its principals Peter J. Spiska, and George P. Spiska, alleging they make false or unsubstantiated R-value and energy savings claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power. The FTC announced a summary judgment ending the litigation in June 2022.

To settle Federal Trade Commission charges that it engaged in deceptive and unfair practices, Dun & Bradstreet (D&B) has agreed to an order requiring substantial changes in the firm’s operations that will benefit small- and mid-sized businesses. Under the proposed order, D&B will also provide refunds to certain businesses that purchased the company’s products in the belief that using the products would improve their business credit scores and ratings.

Online fashion retailer Fashion Nova, LLC is prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle FTC allegations that the company blocked negative reviews of its products from being posted to its website

The operators of a massive real estate investment coaching scheme face permanent bans and will pay approximately $12 million for consumer redress as part of a settlement in a lawsuit filed by the Federal Trade Commission and the Utah Department of Commerce Division of Consumer Protection (UDCP).

The FTC and UDCP alleged that Zurixx, LLC, its owners Cristopher Cannon, James Carlson, and Jeffrey Spangler, and a number of associated companies operated a real estate investment coaching scheme that sold live seminars and telephone coaching using false earnings claims that convinced tens of thousands of consumers to pay them thousands or tens of thousands of dollars.

Amazon will pay more than $61.7 million to settle Federal Trade Commission charges that it failed to pay Amazon Flex drivers the full amount of tips they received from Amazon customers over a two and a half year period. The FTC’s complaint alleges that the company stopped its behavior only after becoming aware of the FTC’s investigation in 2019.

The $61.7 million represents the full amount that Amazon allegedly withheld from drivers and will be used by the FTC to compensate drivers. The FTC announced approval of the final order in June 2021.

The Federal Trade Commission issued an administrative complaint in August 2020 against a marketer, Traffic Jam Events, LLC, and its owner, David J. Jeansonne II (collectively, the "Respondents"), charging multiple counts of deceptive conduct. The administrative complaint mirrors a prior federal court complaint, which the Commission voluntarily dismissed to pursue a broader administrative proceeding.  On October 25, 2021, the Commission granted Complaint Counsel’s Motion for Summary Decision and ordered Respondents to cease and desist from such conduct for twenty years. 

The operators of the MoviePass subscription service have agreed to settle Federal Trade Commission allegations they took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data.The operators of the MoviePass subscription service have agreed to settle Federal Trade Commission allegations they took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data.

The owner and operator of Inmate Magazine Service, a company that scammed prisoners and their families by charging them for magazine subscriptions that either showed up late or not at all, will be permanently banned from selling or marketing magazine subscriptions.

Under the terms of a settlement with the Federal Trade Commission and the Florida Office of Attorney General, Roy Snowden, who owned and operated a number of businesses that operated as Inmate Magazine Service, will also be required to surrender the contents of multiple bank accounts.

The FTC and Florida’s complaint against Snowden and his companies alleged that they marketed magazine subscriptions to consumers serving prison sentences, as well as their families, offering to send the magazines to the prisoners while they were incarcerated and promising the magazines would arrive within 120 days.

In many cases, the magazines never arrived or were delivered far later than promised, with no notification to the consumers about delayed shipment or the chance to cancel their orders as required by the FTC’s Mail, Internet, or Telephone Order Merchandise Rule. The complaint also alleged that consumers were almost never able to contact the company to request refunds or status updates on orders.

The Federal Trade Commission’s complaint against FleetCor, a company that sells fuel card services to businesses, alleges that it has charged customers at least hundreds of millions of dollars in hidden fees after making false promises about helping customers save on fuel costs. The case was filed in December 2019.

In December 2019, the FTC announced The University of Phoenix and its parent company agreed to pay a record $191 million to resolve allegations that they used deceptive advertisements falsely touting their relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross. The settlement order requires UOP to pay $50 million in cash, as well as cancel $141 million in debts owed to the school by students harmed by the deceptive ads.

In March 2021, the FTC sent payments totaling nearly $50 million to more than 147,000 UOP students who may have been lured by allegedly deceptive advertisements.