Scams are the theme of the week at the FTC. The agency entered into two proposed stipulations to settle allegations about deceptive schemes targeting consumers, and issued over $2 million in refunds in relation to an alleged scam dating back to the 2008 financial crisis. These stories and more after the jump.
Monday, June 16, 2025
Bureau of Consumer Protection: Safeguards Rule
- The Commission released updated guidance in the form of a Frequently Asked Questions page regarding the Safeguards Rule as it relates to automobile dealers. The Rule, and the related Gramm-Leach-Bliley Act, require financial institutions to maintain safeguards, such as information security programs, to protect customer information. The FAQ explains when an automobile dealer qualifies as a financial institution, what constitutes customer information, and what measures are needed to protect this information. The guidance also differentiates the Safeguards Rule from the Privacy Rule; the latter concerns information collection and sharing practices, while the former relates to obligations for information already collected. The FAQ is designed to supplement existing guidance, including the "FTC Safeguards Rule: What Your Business Needs to Know" and "FTC's Privacy Rule and Auto Dealers: FAQs" webpages.
Bureau of Consumer Protection: Credit & Finance
- The FTC has entered into a proposed settlement with United Kingdom-based companies Paddle.com Market Limited and Paddle.com, Inc. in relation to a complaint filed in federal court earlier this month. The complaint alleged that the companies assisted and processed payments for deceptive tech support schemes, which sold fake diagnostic software and operated offshore call centers that pitched costly repair services. Paddle also allegedly enrolled consumers into automatically-renewing subscriptions for tech support products without proper disclosure. This conduct allegedly violated Section 5 of the FTC Act, the Telemarketing Sales Rule, and the Restore Online Shoppers' Confidence Act. Under the settlement, the Paddle companies will pay $5 million and will be permanently banned from processing payments for tech support telemarketers.
Wednesday, June 18, 2025
Bureau of Consumer Protection: Get-Rich-Quick Scams
- The 2008 financial crisis is still on the FTC's radar. The agency is sending over $2 million in refunds to 39,500 consumers who were harmed by get-rich-quick kits and coaching programs as alleged in a 2009 lawsuit brought by the FTC against John Beck, John Alexander, Jeff Paul, Gary Hewitt, Doug Gravink, and the companies that these individuals created. The complaint alleged that the programs falsely promised that consumers could purchase homes for pennies on the dollar, earn substantial profits by renting or selling homes purchased at government tax sales, and quickly earn back the cost of the programs. Defendants also allegedly failed to disclose that the programs charged consumers $39.95 per month and required consumers to take affirmative action to cancel them. The court issued a final judgment in August 2012 banning the defendants from engaging in telemarketing or dissemination of informercials or related behavior. The FTC is using funds awarded by this judgment to provide consumer refunds.
Friday, June 20, 2025
Bureau of Consumer Protection: Coaching Scams
- The FTC has closed the loop on a lawsuit filed two years ago by entering into a stipulated order with the last remaining defendant, Robert Shemin. The 2023 complaint alleged that Shemin and others sold deceptive money-making training, mentoring, and business opportunities to Spanish-speaking customers. These schemes, which promised to help consumers quit their day jobs while achieving financial independence, cost consumers millions of dollars and allegedly violated Section 5 of the FTC Act, the Business Opportunity Rule, the Cooling-Off Rule, and the Consumer Review Fairness Act. Under the proposed order, Shemin is permanently banned from marketing or selling business coaching services related to ecommerce or real estate and is required to turn over funds for refunds to consumers. Prior defendants in the case, including Vision Online, Inc. and Ganadores IBR, Inc., agreed to similar bans, and surrendered over $6 million in assets to the FTC for purposes of refunding consumers.
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