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Top frauds of 2018

Paul Witt, Supervising Data Analyst, FTC Bureau of Consumer Protection
Every year, millions of consumers tell us – and our partners – about the frauds they spotted. In 2018, we heard from 3 million people and learned a lot from the reports entered into our Consumer Sentinel database. Here are some notable facts from the Consumer Sentinel Network’s 2018 Data Book – including that a new category of scams has earned the unenviable right to chant "We’re #1." We collected more than 1.4 million fraud reports, and people...

Largest FTC COPPA settlement requires Musical.ly to change its tune

Lesley Fair
We’ll confess to singing along to a Stevie Nicks song or doing an air guitar solo when no one’s looking. But some people take their lip syncing to the next level. More than 200 million people – 65 million of them in the U.S. – downloaded the Musical.ly app. It gave users a platform to create videos and synchronize them with popular songs. It also allowed users to interact directly with each other. That may sound like fun for aficionados, but it...

FTC to advertisers: Bills-for-shills product reviews are a no-go

Lesley Fair
In explaining FTC cases, we try to give readers a behind-the-scenes perspective and sometimes the most accurate insights are out of the mouths of corporate insiders. In the FTC’s first case challenging fabricated reviews on an independent retail site, consider an email from the CEO of Brooklyn-based Cure Encapsulations about a weight loss pill it was selling. Writing to an outfit that promised to “push your product towards the top” of Amazon by...

“Executive search firm” charged with giving job seekers the business

Lesley Fair
For people looking for highly-paid executive positions with private equity or venture capital firms, Worldwide Executive Job Search Solutions and PrivateEquityHeadhunters.com claimed to offer the inside track to the suite life. But according to a lawsuit against the companies and Craig Chrest – whom the FTC alleges controls the businesses – the defendants took thousands of dollars from consumers and then engaged in an elaborate charade to hide...

Cybersecurity for small business: Secure remote access

Andrew Smith, Director, FTC Bureau of Consumer Protection
Punching a time clock in and out isn’t how small businesses run these days. Employees are on the road, others are working from home, vendors are accessing your data at off hours – and you’re generating ideas 24/7. How do you maintain high security standards when employees and others may need to connect to your network remotely from a variety of devices? When we met with small business owners across the country, that question came up a lot. As...

FTC to law violators: Don’t bank on bankruptcy

Lesley Fair
A recent ruling by a Florida Bankruptcy Judge sheds light on a tenacious team within the FTC’s Bureau of Consumer Protection. But first, let’s set the time machine to 2008 when the FTC entered into a settlement with BlueHippo, a computer financing company that pitched electronics to consumers with “less than perfect credit, bad credit, no credit.” The FTC sued BlueHippo for a host of illegal practices, many related to the company’s refund...

Cybersecurity for small business: Hiring a web host

Andrew Smith, Director, FTC Bureau of Consumer Protection
Your website is the online face of your business. Some companies have the in-house capability to manage their web presence. Others hire a web host to handle it for them. When launching a new business or upgrading their site, savvy business owners comparison shop for web hosting services. At the top of your shopping list should be the security features built into what you’re buying. In our meetings with small business owners across the country...

In Fat Giraffe Marketing’s ads, truth was the endangered species

Lesley Fair
The name of the case is FTC v. Fat Giraffe Marketing Group, but the lawsuit has nothing to do with obesity, giraffes, or obese giraffes. OK, perhaps there are some similarities in the sense that the defendants made oversized claims, told tales as tall as tree-topping ungulates, and used protective coloration – in this case, bogus endorsements – to camouflage what they were up to. Fat Giraffe Marketing, four related Utah-based corporations...

They give love a bad name

Lesley Fair
Just in time for Valentine’s Day, the FTC staff released a Data Spotlight highlighting the category of scam with the highest amount of reported financial loss among complaint categories the FTC uses to track fraud. The category may surprise, but here’s a hint. In the words of Bon Jovi, these con artists “give love a bad name.” The category is romance scams and the statistics are staggering. In 2018, Consumer Sentinel – a central hub for consumer...

New date for FTC workshop on ticket sales

Lesley Fair
You won’t need a ticket, but you will need to mark your calendar for June 11, 2019. That’s the new date for That’s the Ticket, an FTC workshop about online ticket sales. The workshop – originally scheduled for March – will explore the ticket sales marketplace, consider industry-wide advertising and pricing issues, and discuss ways to address deception beyond traditional law enforcement. Topics include ticket bots, the Better Online Ticket Sales...