Legal Library: Cases and Proceedings

Moneta Management, LLC, Moneta Management, Inc., and their CEO Michael Todd Greene settled FTC allegations that they knowingly provided false or deceptive information to credit card and ACH processors to obtain merchant processing for a student debt relief scam operated by Brandon Frere and his three companies.

The Federal Trade Commission is sending full refunds totaling more than $11 million to consumers who lost money to a bogus credit card interest rate reduction scheme operated by E.M. Systems & Services.

The FTC and the State of Florida alleged that the company’s owners, Steven D. Short and Karissa L. Dyar, used a variety of phony business names with associated websites, cold-called consumers with credit card debt and falsely promised to save them thousands of dollars by reducing their credit card interest rates. The FTC says that the defendants charged an up-front fee between $695 and $1,495, and falsely promised to provide refunds to consumers if they failed to reduce the interest rates.

In April 2021, the FTC used funds from this case to provide $11 million in redress to consumers harmed by the E.M. Systems and Services scam.

Online children’s education company Age of Learning, Inc., which operates ABCmouse, will pay $10 million and change its negative option marketing and billing practices to settle Federal Trade Commission charges that it made misrepresentations about cancellations and failed to disclose important information to consumers, leading tens of thousands of people to be renewed and charged for memberships without proper consent.  The complaint also alleges the Southern California-based company unfairly billed ABCmouse users without their authorization and made it difficult for consumers to cancel their memberships, preventing consumers from avoiding additional charges. In April 2021, the FTC announced it was sending $9.7 million in refunds to defrauded consumers.

The FTC sued the operators of a mobile banking app, alleging that they falsely promised users high interest rates on their accounts and “24/7” access to their funds.

Complete Merchant Solutions, LLC (CMS) and its former CEO, Jack Wilson, have settled Federal Trade Commission charges that they illegally processed millions of dollars in consumer credit card payments for fraudulent schemes when they knew or should have known that the schemes were defrauding consumers. Those schemes included Apply Knowledge and Tarr, which were ultimately shut down by an FTC enforcement action, and USFIA, which was shut down following an enforcement action by the U.S. Securities and Exchange Commission.

Approximately $147 million is being mailed to 33,000 consumers in the second distribution of refunds resulting from the law enforcement actions brought against Western Union by the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), and the U.S. Postal Inspection Service. Affected consumers are receiving compensation for 100 percent of their verified losses. This is the second refund distribution resulting from the agencies’ actions against Western Union. DOJ is still reviewing petitions from consumers who were harmed by Western Union’s practices, and will be providing opportunities for consumers who have not yet applied for refunds to file claims.

In their complaint against Madera Merchant Services and B&P Enterprises, the Federal Trade Commission and the Ohio Attorney General allege that the companies generated and processed remotely created payment orders (RCPOs) or checks that allowed many unscrupulous merchants, including deceptive telemarketing schemes, to withdraw money from their victims’ bank accounts. The FTC’s Telemarketing Sales Rules (TSR) specifically prohibits the use of RCPOs in connection with telemarketing sales. The court issued temporary restraining orders against Madera Merchant Services and B&P Enterprises, halting their operations and freezing their assets. The defendants and the FTC have agreed to a stipulated Preliminary Injunction in this matter. The defendants agreed to a settlement with the FTC in 2020 that permanently banned them from payment processing.

A payment processor that allegedly ignored clear warning signs its client was operating an unlawful business coaching and investment scheme will be barred from processing payments in the business coaching field under a settlement with the Federal Trade Commission.

According to the FTC’s complaint against California-based QualPay, the company for years processed payments for MOBE, a scheme the FTC alleged charged consumers hundreds of millions of dollars for worthless business coaching products, and that Qualpay ignored numerous signs that MOBE was a fraudulent business.

One of the biggest payment processing companies and its former executive will pay more than $40.2 million to settle Federal Trade Commission charges they knowingly processed payments and laundered, or assisted laundering of, credit card transactions for scams that targeted hundreds of thousands of consumers.

The FTC alleged that First Data Merchant Services, LLC and its former vice president, Chi “Vincent” Ko, allegedly ignored repeated warnings from employees, banks, and others that they were laundering, or assisting laundering, and facilitating payments for companies that were breaking the law over a number of years.

Progressive Leasing, a company that markets rent-to-own payment plans in tens of thousands of retail stores nationwide, will pay $175 million to settle Federal Trade Commission charges it misled consumers about the true price of items purchased through its plans.

The Federal Trade Commission is sending refunds totaling more than $6.9 million to small businesses, non-profits, and government agencies targeted by an office supply telemarketing scam that charged them for products they did not order. The FTC alleged that defendants’ victims included child care centers, schools, and police and fire departments.

In February 2020, two Oregon-based media production companies and their owner agreed to settle FTC charges that they deceptively pitched “exclusive” advertising placements to small businesses and misled them about when the ads would be printed and distributed. The order settling the FTC’s complaint bans the defendants from such deceptive conduct and requires them to pay $100,000.

The FTC and the State of Connecticut sued the marketers of LeanSpa in December 2011, charging that they used fake websites to promote acai berry and “colon cleanse” weight-loss products, and falsely told consumers they could receive free trials by paying a nominal shipping and handling cost. In reality, consumers paid $79.95 for the trial, and for recurring monthly shipments of the product that were hard to cancel. The LeanSpa marketers settled the complaint in 2014, agreeing to stop their allegedly deceptive practices and surrender assets for consumer redress. In October 2015, the FTC announced it was mailing more than 23,000 checks totaling over $3.7 million to consumers who bought LeanSpa products. In December 2019, the FTC sent a second round of checks totaling over $321,000 to consumers who bought LeanSpa products.

According to the agency’s April 2019 complaint, UrthBox violated the FTC Act by misrepresenting that positive consumer reviews on the BBB’s and other websites reflected the independent experiences or opinions of impartial consumers, while the reviewers actually had a material connection to the company. The FTC alleged that UrthBox did not adequately disclose that some consumers received compensation, including free snack boxes, to post those positive reviews. The final order settling the FTC’s charges bars the respondents from engaging in similar conduct and requires them to pay $100,000 to the FTC. In December 2019, the FTC returned more than $84,000 to compensate consumers charged after signing up for the trial offer.

In June 2018, the final two defendants among a group of California-based marketers were permanently barred from the deceptive marketing and billing tactics used in connection with selling skincare products offered to consumers with supposedly “risk-free” trials. The court order settled the charges against them, which the FTC announced in mid-2015. In all, 32 defendants who sold AuraVie, Dellure, LéOR Skincare, and Miracle Face Kit branded skincare products agreed to court orders with the FTC or had default orders entered against them. In November 2019, the FTC announced it was returning over $1.8 million to consumers who bought the deceptively marketed products.