Mar 22, 2018 | Consumer Protection, Employment & Technology Archive
New York AG and FTC Settlements Ban Abusive Debt Collectors from Debt Collection Business and from Buying or Selling Debt
On March 22, 2018, the FTC announced that the operators of a deceptive and abusive debt collection scheme have been banned from the debt collection business and from buying or selling debt under settlements with the Federal Trade Commission and the New York Attorney General’s Office.
As alleged in the complaint, the defendants used threats and abusive language, including false threats that consumers would be arrested or sued, to collect supposed debts. The court halted the operation pending resolution of the case.
Besides the banned activities, the settlement orders prohibit the defendants from misrepresenting financial products and services and from profiting from customers’ personal information collected as part of the challenged practices.
The orders against Travell Thomas, 4 Star Resolution LLC, Profile Management Inc., International Recovery Service LLC, Check Solutions Services Inc., Check Fraud Service LLC and Fourstar Revenue Management LLC and against Maurice Sessum impose a $30 million judgment that will be partially suspended upon the surrender of certain assets.
The order against Charles Blakely III and Merchant Recovery Service, Inc. imposes an $18,789,000 judgment that will be partially suspended upon the surrender of certain assets.
The assets to be surrendered in these settlements include more than $1 million in corporate and individual assets frozen by the court. In each case, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
The FTC vote approving the proposed stipulated orders was 2-0, and the United States District Court for the Western District of New York entered the orders on March 20, 2018.
The U.S. Attorney’s Office for the Southern District of New York obtained 14 guilty pleas from individuals involved in the scheme, including Travell Thomas and Maurice Sessum who were each sentenced to more than 7 years in prison.
For additional information, please click 4 Star Resolution, LLC.
Source: FTC.gov
Mar 21, 2018 | Consumer Protection, Employment & Technology Archive
Orbitz Says Names, Addresses, Dates of Birth, Payment Card Information Possibly Exposed
On March 20, 2018, Engadget reported (“Orbitz data breach exposed 880,000 payment cards”) that
Orbitz announced . . . that it has discovered evidence of a data breach, making it just another of the many companies recently afflicted. Between October and December of last year, hackers may have accessed consumer data submitted to a legacy website between January 1, 2016 and June 22, 2016. Additionally, Orbitz partner platform data submitted between January 1, 2016 and December 22, 2017 may also have been breached. The company discovered signs of the breach on March 1st and estimates that approximately 880,000 credit cards may have been impacted. (Emphasis added)
According to the statement provided by Orbitz about the data security incident:
What Happened?
While conducting an investigation of a legacy Orbitz travel booking platform (the “platform”), Orbitz determined on March 1, 2018 that there was evidence suggesting that, between October 1, 2017 and December 22, 2017, an attacker may have accessed certain personal information, stored on this consumer and business partner platform, that was submitted for certain purchases made between January 1, 2016 and June 22, 2016 (for Orbitz platform customers) and between January 1, 2016 and December 22, 2017 (for certain partners’ customers). Orbitz immediately began investigating the incident and made every effort to remediate the issue, including taking swift action to eliminate and prevent unauthorized access to the platform.
What Information Was Involved?
On March 1, 2018, Orbitz determined that the personal information that was likely accessed may have included full name, payment card information, date of birth, phone number, email address, physical and/or billing address, and gender.
What Information Was Not Involved?
Orbitz’ investigation to date has not found any evidence of unauthorized access to other types of personal information, including passport and travel itinerary information. Additionally, Orbitz can assure U.S. customers that Social Security numbers were not involved in this incident, as these are not collected nor held on the platform.
Orbitz Business Partners Impacted by the Data Breach Unknown
The Wall Street Journal reported (“Orbitz Discloses Possible Data Breach Affecting 880,000 Payment Cards”) that “Orbitz didn’t disclose which business partners were affected by the breach, but American Express Co. . . . said separately that travel booked through its representatives and through Amextravel.com had been affected by the cyberattack.” The Wall Street Journal also reported that “American Express said American Express Global Business Travel and the platforms that manage credit-card accounts weren’t impacted by the attack.” See also (“Orbitz Discloses Possible Data Breach Affecting 880,000 Payment Cards–Update”).
Consumers Whose Information May Have Been Compromised by the Orbitz Data Breach
If you have received a notice or otherwise believe that your personal information may have been stolen or compromised, please contact Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, complete the form above on the right or e-mail [email protected] for a free evaluation of your potential legal rights.
Mar 20, 2018 | Consumer Protection, Employment & Technology Archive
On March 19, 2018, the Federal Trade Commission announced that it will begin mailing 36,830 checks totaling $10,158,601 to consumers who lost money to a technical support scam.
Inbound Call Experts, LLC, doing business as Advanced Tech Support, along with other defendants, agreed to pay more than $10 million as part of a settlement with the FTC. The defendants, according to the FTC, used high-pressure sales pitches to market tech support products and services by falsely claiming to find viruses and malware on people’s computers.
The average refund amount is $277.44. Recipients, according to the FTC, should deposit or cash checks within 60 days. The FTC never requires people to pay money or provide account information to cash a refund check, and if recipients have questions about the refunds, they should contact the FTC’s refund administrator, Analytics at 1-877-793-0908.
Refund Process Previously Announced for Victims of the Deceptive Tech Support Operation
On August 28, 2017, the Federal Trade Commission announced that it was sending e-mail notices to people who were eligible for partial refunds from the tech support scheme whose operators agreed to pay $10 million to settle allegations that they deceived hundreds of thousands of people.
Eligible consumers bought tech support products and services between April 2012 and November 2014 from Advanced Tech Support, which also used the name Inbound Call Experts. Consumers, according to the FTC’s announcement, had until October 27, 2017 to submit a request for a refund.
According to the FTC’s complaint, the defendants used high-pressure sales pitches to market tech support products and services by falsely claiming that people’s computers were infected with viruses and malware.
The defendants in the case paid $10 million as part of a settlement with the FTC. The settlement also prohibited the defendants from misrepresenting that they have identified performance or security issues on people’s computers and from making any other misrepresentations while selling a product or service.
Initial Announcement that Telemarketing Defendants Charged in the Tech Support Scheme Would Pay $10 Million for Consumer Redress to Settle the Action
On December 22, 2016, the FTC announced that the defendants who operated the Florida-based tech support scheme, which the Federal Trade Commission and State of Florida charged deceived thousands of consumers, would pay $10 million for consumer redress to settle the action.
According to the complaint, defendant Inbound Call Experts, doing business as Advanced Tech Support along with other defendants, used high-pressure sales pitches to telemarket tech support products and services falsely claiming to find viruses and malware on the computers of consumers.
The stipulated final court order prohibited the defendants from misrepresenting that they have identified performance or security issues on the computers of consumers and from making any other misrepresentations while selling a product or service. Under the order, a monitor would be appointed to oversee the defendants’ business for two years, at the defendants’ expense. Further, the order required the defendants to review the business practices of any third-party lead generators from whom they obtain leads.
A negotiated settlement with the lead generator defendants in this action was announced in July 2016.
In addition to Inbound Call Experts, the telemarketing defendants included Advanced Tech Supportco LLC; PC Vitalware LLC; Super PC Support LLC; Robert D. Deignan, Paul M. Herdsman and Justin M. Wright.
Source: FTC.gov
Mar 20, 2018 | Shareholder & Investor Protection
Federal Court at Request of FTC Stops Activities of Individuals Who Allegedly Promoted Deceptive Cryptocurrency-Based Money-Making Schemes
On March 16, 2018, the FTC announced that at its request, a federal court halted the activities of four individuals who allegedly promoted deceptive money-making schemes involving cryptocurrencies, which falsely promised that participants could earn large returns by paying cryptocurrency such as Bitcoin or Litecoin to enroll in the schemes.
In a complaint, the FTC alleges that three defendants – Thomas Dluca, Louis Gatto, and Eric Pinkston – promoted chain referral schemes known as Bitcoin Funding Team and My7Network. Using websites, YouTube videos, social media and conference calls, the defendants promised big rewards for a small payment of Bitcoin or Litecoin.
The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income. The FTC alleges, however, that the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments.
Bitcoin Funding Team and My7Network participants, according to the FTC, only could generate revenue by recruiting new participants and convincing them to also pay cryptocurrency. For example, Bitcoin Funding Team participants were required to make an initial bitcoin payment to an earlier participant and pay a fee to Bitcoin Funding Team. With these payments, participants were eligible to recruit new members and receive payments from them. Promoters claimed participants could earn bigger rewards if they paid additional bitcoins.
The FTC alleges that a fourth defendant, Scott Chandler, promoted Bitcoin Funding Team and another deceptive cryptocurrency scheme, Jetcoin. Jetcoin also promoted a recruitment scheme and, additionally, promised investors a fixed rate of return on their initial Bitcoin investments as a result of Bitcoin trading. In a series of promotional calls, Chandler claimed Jetcoin participants could double their investment in 50 days. In reality, the FTC complaint alleges, the scheme failed to deliver on these claims and ceased operation within two months of launching.
The FTC charged in its complaint that the defendants violated the FTC Act’s prohibition against deceptive acts by misrepresenting the chain referral schemes as bona fide money-making opportunities and by falsely claiming that participants could earn substantial income by participating in the three schemes. As requested by the FTC, the court has issued a temporary restraining order and frozen the defendants’ assets pending trial.
FTC Cautions Digital Currency Investors
Before you invest in cryptocurrency, BE ADVISED:
- Cryptocurrencies ARE NOT backed by a government or central bank. Unlike most traditional currencies, such as the dollar or yen, the value of a cryptocurrency is not tied to promises by a government or a central bank.
- If you store your cryptocurrency online, you DO NOT have the same protections as a bank account. Holdings in online “wallets” are not insured by the government like U.S. bank deposits are.
- A cryptocurrency’s value can change constantly and dramatically.An investment that may be worth thousands of dollars on Tuesday could be worth only hundreds on Wednesday. If the value goes down, there’s no guarantee it will rise again.
- Nothing about cryptocurrencies makes them a foolproof investment. Just like with any investment opportunity, there are no guarantees.
- NO ONE can guarantee you’ll make money off your investment. Anyone who promises you a guaranteed return or profit is likely scamming you. Just because the cryptocurrency is well-known or has celebrities endorsing it DOES NOT mean it’s a good investment.
- Not all cryptocurrencies or the companies behind them are the same.Before you decide to invest in a cryptocurrency, look into the claims the company is making. Conduct an Internet search with the name of the company and the cryptocurrency with words like review, scam, or complaint. Look through several pages of search results.
Source: FTC.gov
Mar 19, 2018 | Shareholder & Investor Protection
Electronic Transaction Clearing Agrees to Settle Charges That it Illegally Placed More Than $25 million of Customer Securities at Risk to Fund Its Own Operations
On March 19, 2018, the Securities and Exchange Commission announced that Los Angeles-based Electronic Transaction Clearing, a registered broker-dealer has agreed to settle charges that it illegally placed more than $25 million of customers’ securities at risk in order to fund its own operations.
Among other things, the SEC found that Electronic Transaction Clearing violated the Customer Protection Rule, which is intended to safeguard customers’ cash and securities so that they can be promptly returned if a broker-dealer fails. The Customer Protection Rule requires broker-dealers to maintain physical possession or control of the fully paid and excess margin securities of customers.
In 2015, according to the SEC’s order, Electronic Transaction Clearing put customer securities at risk numerous times. Electronic Transaction Clearing improperly transferred almost $8 million of fully-paid securities belonging to cash customers to an account at another clearing firm to meet margin requirements on borrowed funds, and the firm used more than $17 million of securities of two customers to borrow funds without consent. The SEC’s order also finds that the company improperly commingled customers’ securities and allowed a customer’s excess margin securities to be loaned out by the other clearing firm.
The SEC’s order charged ETC with violating, among other things, the Securities Exchange Act and Customer Protection Rule. Without admitting or denying the SEC’s findings, Electronic Transaction Clearing agreed to entry of the order and an $80,000 penalty payment, in addition to cease and desist from committing or causing any similar violations in the future and to be censured. According to the SEC, the company cooperated with the SEC’s investigation and has taken remedial steps to prevent future violations.
INVESTORS: FINRA’s BrokerCheck is an online tool available to research a broker or brokerage firm to determine whether an individual or firm is registered, as required by law, to sell securities and/or offer investment advice. FINRA’s BrokerCheck data provides a summary overview of a broker’s registration and employment history, qualifications, as well as “disclosure events” regarding such things as customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civil judicial proceedings.
Source: SEC.gov
