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Monday, December 16, 2013


News from the Federal Trade Commission - December 2013
Federal Trade Commission sent this bulletin at 12/16/2013 02:10 PM EST

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Not App-propriate

The creator of one of the most popular apps for Android mobile devices has agreed to settle FTC charges that the free app deceived people about how the company would share geolocation information. Goldenshores Technologies, LLC, managed by Erik M. Geidl, is the company behind the “Brightest Flashlight Free” app, which Android users have downloaded tens of millions of times. The FTC’s complaint alleges that the company deceived people by not disclosing in its privacy policy that the app transmitted users’ precise location and unique device identifier to third parties, including advertising networks.

Mobile Cramming

Wise Media, its CEO, Brian M. Buckley, and Winston J. Deloney have settled FTC charges that they crammed more than $10 million in unauthorized charges on telephone bills. The FTC’s complaint alleged that Wise Media billed people for so-called “premium services” that sent text messages with information like horoscopes and flirting tips. The settlement includes a $10 million judgment that is partially suspended due to the defendants’ inability to pay. Buckley will be required to surrender nearly all his assets along with any remaining assets of Wise Media, valued in excess of $500,000.

Tax IDT Awareness Week

The FTC has named Jan. 13-17, 2014, Tax Identity Theft Awareness Week. The Commission will host national and regional events designed to raise awareness about tax identity theft, and provide people with tips on how to protect themselves and what to do if they become victims. Tax identity theft accounted for more than 43 percent of the Commission’s identity theft complaints in 2012, nearly double the number received in 2011.

Payment Processor

The FTC has announced a proposed settlement resolving allegations that a payment processor used unfair tactics to maintain scores of merchant accounts for Infusion Media Inc., which perpetrated the “Google Money Tree” work-at-home scheme. Using merchant accounts set up by Process America Inc. and its owners, Infusion Media placed more than $15 million in unauthorized charges on people’s debit and credit card accounts. Payment processors and Independent Sales Organizations (ISOs) enable merchants to charge consumers’ credit cards for products and services. In exchange, payment processors and ISOs get paid for each transaction the merchant processes.

Mobile Device Tracking

The FTC will host a workshop about mobile device tracking on February 19, 2014, from 10 am to noon in Washington, DC. Businesses can track shoppers’ movements throughout retail stores and other attractions by identifying signals emitted by their mobile devices. Companies can determine whether a visitor is new, what paths they take, the length of time they spend in a location, and how often they visit. In most cases, this tracking is invisible to visitors, which raises questions about the privacy and security risks of these technologies.

Do Not Call Data Book

According to the recently released National Do Not Call Registry Data Book, the National Do Not Call Registry contained more than 223 million actively registered phone numbers at the end of Fiscal Year 2013 – up from the 217 million numbers registered at the end of FY 2012. The Data Book also reveals that the highest number of monthly complaints – more than 370,000 – were submitted in October 2012. The number of monthly complaints related to “robocalls” ranged from nearly 147,000 per month to more than 234,000 per month.

Alternative Scoring Products Workshop

The FTC is hosting a workshop about alternative scoring products on March 19 from 10 am to noon in Washington, DC. Companies use predictive scores for a variety of purposes, ranging from identity verification and fraud prevention to marketing and advertising. People are largely unaware of these scores, and have little to no access to the underlying data that make up the scores, raising potential privacy questions.

"When consumers are given a real, informed choice, they can decide for themselves whether the benefit of a service is worth the information they must share to use it. But this flashlight app left them in the dark about how their information was going to be used."

— Jessica Rich, Director of the FTC’s Bureau of Consumer Protection

Directory Fraud

At the FTC’s request, a federal judge has temporarily stopped an operation that bilked more than $14 million from small businesses and churches for unwanted listings in online business directories. The FTC seeks to end the illegal practices and make Mohamad Khaled Kaddoura, his associates and 15 companies they ran return money to the victims. The scheme has generated more than 13,000 complaints to the FTC.

Double Trouble

A default judgment against Business Recovery Services LLC and a consent judgment against Brian Hessler, its owner, bans them from selling recovery services. The FTC alleged that their operation bilked victims of previous scams by falsely claiming it could help them recover money they lost.

Car Balk

A federal court has ordered Matthew J. Loewen and his companies to pay more than $5.1 million to people they allegedly duped into paying hundreds of dollars to sell their cars. The defendants falsely claimed to have buyers lined up for sellers’ cars, and that they would provide refunds if the cars weren’t sold. The court also permanently banned the defendants from telemarketing and payment processing.


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