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Not so free credit scores

Wednesday, November 19th, 2014

Company to pay $22 million for offering “free” credit scores that turned out to be not so free

We’ve brought law enforcement actions – dozens of ‘em. We’ve held workshops, issued reports, and sent warning letters. If it takes sky writing, tap dancing, and a float in a Thanksgiving Day parade, we’ll do that, too. But here’s what’s not going to happen. The FTC is not giving up until businesses get the message that: 1) Free means free; and 2) Key terms and conditions have to be clearly and conspicuously disclosed. A $22 million settlement announced by the FTC and the AGs of Illinois and Ohio with a national credit monitoring service advertising so-called “free” credit scores emphasizes that point. Another note for practitioners: It’s the FTC’s third case alleging violations of ROSCA.

One Technologies and related outfits marketed their credit monitoring programs, MyCreditHealth and ScoreSense, through at least 50 sites, including FreeScore360.com, FreeScoreOnline.com and ScoreSense.com. Their strategy was simple. Buy advertising on search engines so their ads show up near the top when people look for phrases like “free credit report” and then follow up with a persuasive pitch: “View your latest Credit Scores from All 3 Bureaus in 60 seconds for $0!”

According to the lawsuit, the defendants failed to clearly tell consumers that if they availed themselves of those “free” services and didn’t cancel within seven days, the defendants would ding their credit cards for $29.95 a month over and over and over again. The complaint includes screen shots of the defendants’ sites, but before looking at them, take out your reading glasses because they’ll come in handy in trying to locate where the defendants chose to tell people about that $29.95 monthly fee.

One line of fine print added in late 2012 said “Free 7-Day trial when you order your 3 Free Credit Scores. Membership is then just $29.95 per month until you call to cancel.” The first problem: The type was tiny – a fraction of the size of the defendants’ multiple use of the word “free.” The second problem: Why should consumers even have to be on the look-out for the cost, given that the defendants so prominently advertised it as “free”?

A second purported disclosure appeared as an obscure hyperlink on the page where people typed in their Social Security number and birthdate.  Sandwiched between the logos of various security firms and a large color button that said CONTINUE was this less-than-crystal-clear statement:

By clicking on the ‘Continue’ button, you agree to the Offer Details, to the Terms and Conditions, acknowledge receipt of our Privacy Policy and agree to its terms . . .

The “Offer Details” link triggered a small pop-up that said, among other things, “At the end of the 7-day trial period, your credit/debit card will be charged $29.95 on a monthly basis until you call to cancel.”

Another place the defendants put the information was on a side panel of the Payment Form in white letters on a grey background – a color combination one of the defendants’ own employees described as “known to cause seizures in lab rats.”

According to the complaint, once people spotted the unauthorized charges on their accounts, the defendants didn’t make it easy to stop the billing.  And even when people asked for their money back because they hadn’t approved of the charges, the defendants denied refunds to many of them.

The lawsuit alleges violations of the FTC Act, as well as the Illinois Consumer Fraud Act, the Ohio Consumer Sales Practices Act, and related state rules. In addition, the complaint is the third FTC action to charge violations of ROSCA, the Restore Online Shoppers’ Confidence Act. The FTC says the defendants failed to disclose material terms, didn’t get consumers’ express informed consent for the negative option feature, and didn’t provide a simple cancellation method – all violations of ROSCA.

In addition to the $22 million judgment, the stipulated order puts a host of provisions in place to protect consumers in the future. For example, the companies will have to clearly disclose the terms before a consumer consents to pay via a negative option. What’s more, the defendants have to provide a mechanism for people to stop recurring charges that is at least as simple as the mechanism consumers used to initiate the service.

FTC Issues FY 2014 National Do Not Call Registry Data Book

Wednesday, November 19th, 2014

More Than 217 Million Active Registrations Currently on Do Not Call List

The Federal Trade Commission today issued the National Do Not Call Registry Data Book for Fiscal Year 2014. The FTC’s National Do Not Call Registry lets consumers choose not to receive telemarketing calls. Now in its sixth year of publication, the Data Book contains a wealth of information about the Registry for FY 2014 (from October 1, 2013 to September 30, 2014), including:

  • The number of active registrations and consumer complaints since the Registry began in 2003;
  • FY 2014 complaint figures by month and type;
  • FY 2014 registration and complaint figures for all 50 states and the District of Columbia by population;
  • Rankings of the number of Do Not Call registrations by state population;
  • The number of entities accessing the Registry by fiscal year; and
  • An appendix on registration and complaint figures by consumer state and area code.

According to the Data Book, at the end of FY 2014, the Do Not Call Registry contained 217,855,659 actively registered phone numbers, up from 213,400,640 at the end of FY 2013. In addition, the number of consumer complaints about unwanted telemarketing calls received decreased from 3,748,646 during FY 2013 to 3,241,086 during FY 2014.

This year’s Data Book also reveals trends in complaint data. In addition to providing information on the total number of consumer complaints per month, it contains data on the number of monthly complaints specifically related to pre-recorded telemarketing “robocalls,” and requests for a telemarketer to stop calling.

During the past fiscal year, the FTC has continued to receive large numbers of consumer complaints about robocalls. The number of complaints varied by month, ranging between a low in October of 85,167 and a high of 184,876 in August 2014.

Most telemarketing robocalls have been illegal since September 2009. As part of its effort to stop deceptive, misleading, and otherwise unlawful robocalls, the FTC will take action against entities that are violating the agency’s Telemarketing Sales Rule.

As part of the FTC’s ongoing efforts to stop illegal robocalls, the agency hosted its second public challenge in August 2014, Zapping Rachel. The contest challenged participants at DEF CON 22 to design a robocall honeypot, which is an information system designed to attract robocallers, and help law enforcement authorities, researchers, and others gain enhanced insights into robocallers’ tactics. The winning solutions included open-source code and are designed to assist in the battle against robocallers.

Tech businesses accused of duping computer users

Wednesday, November 19th, 2014

From the Florida Sun-Sentinel  –  this is a common complaint

FTC investigates computer repair businesses
Tech firms accused of selling needless repairs
FTC alleges multimillion computer repair scheme

Federal authorities are investigating tech businesses in Delray Beach accused of charging people for unnecessary computer repairs after diagnosing phantom problems.\

The Federal Trade Commission last week obtained a temporary restraining order against OMG Tech Help LLC, Vast Tech Support LLC and related entities, alleging a scheme that took in more than $22 million.

In its court filing, the FTC said the companies advertised a computer scan system to detect problems with slow-running systems, flagging items such as temporary files and cookies as “errors,” and then offering to fix the software with a $29.95 download. The companies then sold a longer-term maintenance plan to consumers who believed their computers were riddled with problems, court documents allege.

The companies listed as defendants include Vast Tech Support, 2855 S. Congress Ave. inDelray Beach, and OMG Tech Help of Delray Beach, also located at 2855 S. Congress Ave. Company officers listed as defendants are Jon-Paul Vasta, president; Mark Donahue, chief operating officer; and Elliot Loewenstern, managing partner of Vast, and related companies, Success Capital and OMG Tech Help.

Vasta and his associates couldn’t be reached for comment.

U.S. District Judge Kenneth Marra entered an order Nov. 12 in the Southern District Court appointing Miami lawyer David S. Mandel as the receiver for OMG Tech Help LLC, Vast Tech Support LLC and the related entities.

The receiver posted a message on omgtechhelp.wix.com, saying the FTC’s investigation continues and any additional information will be posted on the website.

The FTC said in its court filing that the firms have violated the Fair Trade Commission Act, the Florida Deceptive and Unfair Trade Practices Act and the Telemarketing Sales Rule.

Also cited in the filing was Boost Software of Boston and Naples, Fla. Boost transacts business through telemarketers at Delray Beach-based Vast, the filing says. Boost’s president, Amit Mehta, also is named in the FTC’s action.

Credit Control

Wednesday, November 19th, 2014

Please contact us if Credit Control, LLC is attempting to collect a debt from you.

Criminal action against debt collectors

Tuesday, November 18th, 2014

The following is from Collections & Credit Risk, an industry publication.

 

Collection Agency Charged with $4.1M Fraud

BY DARREN WAGGONER

NOV 18, 2014 12:16pm ET

 A Georgia-based collection agency and seven employees are facing fraud charges after a federal investigation revealed tactics that prosecutors believe convinced more than 6,000 people to pay the firm an estimated $4.1 million in purported debts, according to a criminal complaint filed Tuesday in Manhattan federal court.
Williams Scott & Associates LLC, based in Norcross, Ga., allegedly threatened people with arrest and claimed it was working for the U.S. Justice Department to collect debts and fees for nonexistent offenses such as “check fraud.” According to the complaint, victims often were told that WSA stood for “Warrant Services Association.” The illegal credit card payments were collected between 2010 and early 2014.

FBI agents arrested the seven people charged – including owner John Todd Williams and six employees – on Tuesday, according to the Federal Trade Commission. Employees allegedly used aliases such as “Mr. Cline” and “Investigator Ace Rogers,” to falsely inform victims the “national check fraud center” had filed complaints against them and they were facing jail time.

The employees read from a script containing phrases that sounded like official legal language, according to the complaint.

Successful collectors were paid 30% of the actual amount owed, and 40% of anything collected beyond that, according to the complaint.

Victims allegedly were told to either pay up or a warrant would be issued for their arrest and their driver’s licenses would be suspended. In some cases, victims were supplied bogus documents with government seals.

“After years of threatening false arrest, these defendants are the ones who now find themselves in handcuffs, facing the loss of their own liberty,” Manhattan U.S. Attorney Preet Bharara said in a statement. “We are far from finished looking at the seedy side of debt collection.”

One defendant, Benita Cannedy, identified herself as “Chief Investigator Sharon Wright” in a May call to a pregnant woman demanding $819.04. Cannedy, according to the complaint, told the victim that Los Angeles County would issue a warrant for her arrest if she didn’t pay.

When told the victim was in her eighth month of pregnancy, Cannedy said, “I wouldn’t care if you are nine months pregnant. I have a job to do here,” the complaint says.

The FTC froze the agency’s assets in May and took it into receivership, according to federal court documents. The FBI before the shut down had searched its offices and found evidence of fraudulent collection techniques, according to the complaint.

In July, the firm’s owner registered another collection company, this one in California, that uses many of the same tactics, according to the complaint. The name of the California agency was not immediately available. Williams could not be immediately reached for comment.

Hundreds of complaints against the company have been filed, mostly with the FTC.

Can a Debt Collector Fax My Employer?

Tuesday, November 11th, 2014

Debbie contacted us because a debt collector had sent a fax to her employer.

The fax was on the header of a collection agency.

Right at the top of the fax was her Social Security number, available to anyone who happened to grab it from the fax machine.

The fax asked for her job title, dates of employment, and salary.

The fax had a “case number” and stated that “This Law Office is investigating [Debbie] on pending charges out of [consumer’s County]. Please complete & return promptly. We also would like a copy provided to [Debbie].”

Is this legal?

In a word, “No.”

It is a violation of the Fair Debt Collection Practices Act.

The FDCPA allows a debt collector to contact an employer to obtain an employee’s location information, if the collector does not already have it.  That is a big “if.”

“Location information”  is a consumer’s place of residence  and his telephone number at such place, or his place of employment.  Requesting any additional information is illegal unless the collector has a judgment.

The collector seeking to locate a consumer must  identify himself by personal name, state that he is attempting to obtain or confirm the consumer’s location, and, only if expressly requested, identify his employer.

 The collector may not volunteer the name of the collection agency.

 The collector may  not state that such consumer owes any debt.

He may not  communicate more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.

 The collector may not communicate by post card.  The collector may  not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt.  Since a fax has the same characteristics —  anyone can see the message  –  it should also be unlawful, unless the collector has been asked to send a writing and ascertained that only an authorized person will see it.  Finally, after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney’s name and address, he may not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to communication from the debt collector.

The fax goes way beyond what is permitted, and subjects the debt collector to liability under the FDCPA.   Among other things:

The collector volunteered his company name, which is not permitted.

The collector asked for information that is not permitted.

The collector referred to the debt and implied that the consumer had engaged in illegal conduct.

The reference to a “case number” implies that litigation exists, which is probably false.

The collector asked that the employer communicate with the consumer, which is illegal:  a debt collector may never ask an employer, neighbor, etc., to get a message to the consumer.  This is a common way of pressuring consumers to pay debts.  It is also illegal.

Finally, an employer is not required to respond to a request for information.

 

Fink & Associates

Sunday, November 9th, 2014

Please contact us if Steven J Fink & Associates is trying to collect money from you.

Professional Account Service, Inc.

Sunday, November 9th, 2014

Please contact us if you have been sued by Dorian B. LaSaine or Professional Account Service, Inc.

FCC ruling on opt out notice for advertising faxes sent with express permission

Tuesday, November 4th, 2014

The following description of the FCC ruling is from an industry source:

 

The Federal Communications Commission (FCC) recently issued an orderfinally clarifying that opt-out notices are required in solicited facsimile advertisements. In doing so, the FCC recognized the confusion caused by its prior orders and commentary, granting the petitioning entities a retroactive waiver of the opt-out notice requirement and a six-month window within which to come into compliance. The FCC also expressly invited all similarly situated entities to seek the same waiver and compliance window and instructed that such requests should be filed within six months of its order, issued on October 30, 2014.

The FCC was faced with an application for review of a Consumer and Governmental Affairs Bureau (Bureau) order and more than 20 petitions filed by various entities. The petitioners collectively challenged 47 CFR 64.1200(a)(4)(iv), which requires opt-out notices in facsimile advertisements sent with the recipients’ prior express permission. The petitioners primarily argued that Section 227(b) of the Telephone Consumer Protection Act (TCPA) applies only to “unsolicited advertisements” and therefore could not be the statutory basis for such a rule. The petitioners also contended that the FCC offered confusing and conflicting statements regarding the applicability of the rule to solicited facsimile advertisements.

The FCC rejected the petitioners’ primary argument and held that it had authority to issue the rule under Section 227(b). Specifically, the FCC held that inclusion of the opt-out notice in solicited facsimile advertisements was necessary to determining whether the sender retains the recipient’s prior express permission or is otherwise sending, or will send in the future, an “unsolicited advertisement.” The FCC “directed” the Bureau to conduct outreach to inform potential senders of its “reconfirmed requirement” to include opt-out notices in solicited facsimile advertisements.

However, the FCC found that there was cause for the petitioners’ confusion since it did not explicitly state during its rulemaking that it contemplated an opt-out requirement for solicited facsimile advertisements and had previously issued an order stating that “the opt-out notice requirement only applies to communications that constitute unsolicited advertisements.” Consequently, the FCC granted the petitioners a retroactive waiver of the rule and a six-month window from the date of the order to come into compliance.

The FCC was clear that the waiver applies only to facsimile advertisements sent to recipients who granted prior express consent and does not apply to unsolicited facsimile advertisements or facsimile advertisements sent in the context of an existing business relationship but without the recipient’s prior express consent.

Company-Specific Do-Not-Call Lists

Monday, November 3rd, 2014

Whether or not your home phone number or numbers are registered on the national Do-Not-Call list, the Federal Communications Commission  requires a person or entity placing voice telephone solicitations to your home to maintain a record of your direct request to that caller not to receive future telephone solicitations from that person or entity. The calling company must honor your do-not-call request for five years. To prevent calls after five years, you will need to repeat your request to the company, and it must honor it for another five years (and so on). Your request should also stop calls from affiliated entities if you would reasonably expect them to be included, given the identification of the caller and the product being advertised. Unless your home phone number or numbers are registered on the national Do-Not-Call list, however, you must make a separate do-not-call request to each telemarketer from whom you do not wish to receive calls.

When you receive telephone solicitation calls, clearly state that you want to be added to the caller’s do-not-call list. You may want to keep a list of those persons or businesses that you have asked not to call you. Tax-exempt non-profit organizations are not required to keep do-not-call lists.