May 2014

Hat trick? FTC charges violations in auto loan servicing, debt collection, credit reporting

Sometimes good things come in threes, like Musketeers, Bronte sisters, and Stooges.  (Shemp doesn’t count.)  But the FTC’s complaint against Consumer Portfolio Services charges the company with three distinct sets of violations – unlawful auto loan servicing, illegal debt collection, and violations of the Fair Credit Reporting Act’s Furnisher Rule – all of which spelled triple trouble for consumers.  But there’s relief on the way in the form of a

Who’s mining the store? 9 top takeaways, legislative recommendations, and some straight talk for industry from the FTC’s data broker report

Type “big data” into a search engine and you’ll get more than 300 million results.  Consider the amount of personal information actually in the hands of data brokers and add a string of zeroes to that.  There are lots of valid purposes for using that data – verifying identity and detecting fraud, to name just two – but let’s face it:  It’s an industry that operates primarily behind closed doors.  To shed light on what’s going on, the FTC conducted an in-depth study o

What’s a 4-letter word for “FTC advice for derelict debt collectors”?

We like solving puzzles – from crosswords and anagrams to that byzantine conspiracy wall constructed by Claire Danes' character on "Homeland."  So it doesn't faze FTC staff when companies use complicated corporate structures to hide what they're up to.  Those skills came in handy in unraveling how debt collector Asset & Capital Management Group and its host of related businesses were violating Section 5 of the FTC Act and the Fair Debt Collection Practices Act.  The prize for untangling this puzzle:

Not another lawyer joke

We try to keep a sense of humor about lawyer jokes, but given the harm to consumers, it's no laughing matter when debt collectors mimic attorneys.  The Fair Debt Collection Practices Act and the FTC Act establish that it's illegal for debt collectors to falsely claim to be attorneys or to suggest a bogus connection to law enforcement.  An FTC settlement with an outfit called Goldman Schwartz and related companies puts the whole kit and kaboodle out of

Entrepreneurs: When it comes to pyramid schemes, don’t be in denial

Promotional materials and live presentations for Fortune Hi-Tech Marketing used a lot of organizational jargon to recruit new people.  The first step:  Shell out start-up fees and monthly charges.  Next:  Recruit enough “independent reps” so you can work your way up through the ranks to Regional Sales Manager, Executive Sales Manager, National Sales Manager, Platinum Sales Manager, and ultimately “Presidential Ambassador.”  But the FTC and the State AGs of Illinois, Kentucky and North Carolina have another term for FHTM’s convoluted system of recruiting and compensation:

Has your company taken this selfie lately?

The company name may be American Apparel, but commerce is global, especially in the fashion industry.  If a business says it abides by the U.S.-EU Safe Harbor for transferring consumer data, companies have an obligation to live up to that promise.  American Apparel, the popular clothing retailer, is the latest company to be the subject of FTC law enforcement for claiming it was in compliance with the framework, but failing to conduct the required annual self-cer

Gone with the wind?

A mobile app that lets users send photo and video messages that recipients can look at for a moment before the content is, in effect, gone with the wind?  Scarlett O’Hara could have declared her love for Rhett Butler (or Ashley Wilkes), confident that the message was ephemeral.  Of course, residents of Tara didn’t have access to the popular app Snapchat, which claimed to do just that.  But according to an FTC settlement, the company’s promise that Snapchat me

New text on textiles

If your business involves textiles, you’re familiar with the requirements of the Textile Fiber Products Identification Act and the FTC’s accompanying Rules.  But are you in the loop on changes that take effect today – May 5, 2014 – that could give you more flexibility with compliance?  In addition to reviewing the revised Rules, you’ll want to read the FTC’s updated publication, Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts, to