CONSUMERS DEFRAUDED BY BOGUS '$10,000 CREDIT LINE' TO RECEIVE REFUNDS FROM FTC

FROM:  FEDERAL TRADE COMMISSION 

FTC Sends Full Refunds to Consumers Duped by Marketers of Bogus ‘$10,000 Credit Line’

The FTC is mailing checks totaling over $3.7 million to 26,176 consumers whose bank accounts were debited without their consent by EDebitPay LLC, Dale Paul Cleveland and William Wilson. The defendants deceptively offered a $10,000 credit line that was really a membership to a website where consumers could buy goods.

“The FTC strives to return as much money as possible to defrauded consumers;” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “It is particularly gratifying when we can make consumers whole again.”

In 2011, a federal district court ordered the defendants to pay more than $3.7 million after finding that the defendants were in contempt of court for violating a 2008 court order by selling a bogus “$10,000 credit line”, and a “no cost” prepaid debit card with hidden fees, to consumers who were unemployed or had poor credit.

After obtaining this judgment, the FTC collected it in full. Many affected consumers will receive more than $100; the amounts vary based upon the victim’s loss. Those who receive the checks from the FTC’s refund administrator should cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

DECEPTIVE SPAM MESSAGE SENDER SETTLES FTC CHARGES

FROM:  FEDERAL TRADE COMMISSION 

Marketer Settles FTC Charges He Sent Millions of Deceptive, Unwanted Text Messages

An affiliate marketer has agreed to settle Federal Trade Commission charges that he was responsible for sending millions of unwanted text messages to consumers that deceptively promised “free” gift cards and electronics.

The marketer, Jason Q. Cruz of West Bend, Wisc., was a subject in a series of FTC complaints targeting the senders of deceptive spam text messages. In its complaint against Cruz, the FTC alleged that he sent text messages to consumers around the country offering free merchandise, such as $1,000 gift cards to major retailers or free iPads, to those who clicked on links in the messages. A typical message read, “You have been selected for a $1,000 Walmart GiftCard, Enter code ‘FREE’ at [website address] to claim your prize: 161 left!”

Consumers who clicked on the links did not receive the “free” merchandise. Instead, consumers were taken to websites that requested personal information and required them to sign up for multiple risky trial offers to qualify for the supposedly “free” merchandise. Most of those trial offers were for questionable products and services that cost money and included recurring monthly charges.

“When scammers use unwanted text messages to entice consumers with deceptive offers, that’s a significant problem,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Banning a serial spammer like Mr. Cruz from sending unsolicited text messages helps the FTC take a huge cut out of scammers’ efforts to target consumers in this way.”

Under the terms of the stipulated final order, Cruz is permanently banned from sending or assisting others in sending unsolicited text messages to consumers. The order also bans Cruz from deceptively presenting an offer as “free,” and from misleading consumers about the use of their personal information.

The order also includes a judgment of more than $185,000, which represents all of the money Cruz received in connection with the scam. Under the terms of the order, all but $10,000 of the monetary judgment is suspended based on Cruz’s inability to pay the full amount.

In addition, Cruz is required to destroy all consumer information he may have acquired over the course of the scam and cooperate with any further FTC investigations.

The Commission vote approving the proposed stipulated final judgment was 4-0. The FTC filed the stipulated final judgment in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court judge signed and approved the order on Jan. 16, 2014.

NOTE: Stipulated final judgments have the force of law when approved and signed by the District Court judge.