The Federal Trade Commission today told the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce that, in response to the current economic crisis, the FTC has substantially increased its law enforcement efforts to protect consumers of financial services. The FTC recommended legislative and other remedies to enhance the agency’s effectiveness.

Eileen Harrington, Acting Director of the FTC’s Bureau of Consumer Protection, testified that during the past five years the Commission has brought more than 70 law enforcement actions involving mortgage advertising and marketing, mortgage servicing, debt settlement and credit counseling, debt collection practices, credit repair operations, lending discrimination, and other financial services issues. The Commission has also brought enforcement actions against loan modification and foreclosure rescue scams, including recent actions as part of a federal-state crackdown in this area.

Describing the agency’s enforcement of the Equal Credit Opportunity Act, which prohibits discrimination in lending decisions, the testimony noted that the Commission has brought more than three dozen cases against large subprime lenders, major non-mortgage creditors, and small finance companies, including an action announced yesterday alleging that Golden Empire Mortgage and its owner charged Hispanic consumers higher prices for mortgage loans than non-Hispanic white consumers. The testimony also discussed FTC enforcement activity regarding non-bank credit card marketers, including a 2008 court settlement in which CompuCredit agreed to pay an estimated $114 million in credits and cash refunds to subprime consumers to settle charges that it deceptively marketed its credit cards.

The testimony stated that the FTC has new rulemaking authority under the Omnibus Appropriations Act of 2009 to prohibit or restrict entities within its jurisdiction from engaging in unfair or deceptive mortgage loan practices. With this authority, the Commission intends to address unfair or deceptive mortgage loan modification and foreclosure rescue practices, mortgage servicing, and other mortgage lending activities. The Commission believes that its new rulemaking authority will enable it to more effectively protect mortgage borrowers and financially distressed homeowners.

Finally, according to the testimony, the Commission strongly supports new legislation, the proposed Consumer Credit and Debt Protection Act, that would allow the FTC to issue rules prohibiting or restricting unfair or deceptive practices relating to consumer credit or debt services. The legislation would give the Commission authority to obtain civil penalties for violations of rules that the agency promulgates with regard to consumer credit or debt. The Commission believes that having this civil penalty authority would increase deterrence of would-be violators and allow it to protect consumers more effectively.

The Commission vote authorizing the testimony was 4-0.

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. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

(HouseTestimony)

(FTC File No. P064814)

Click here for additional documents including:

• Foreclosure rescue scams
• Mortgage Payment advice
• Credit Repair – How to Help Yourself

Nine Consumer Tips to Make the Most of 2009

As 2008 draws to a close, the Federal Trade Commission has nine consumer tips that can yield big dividends next year. Recognizing a good deal, staying safe online, managing credit and debt, and reporting scams and deceptive offers are more important than ever in these uncertain economic times. The FTC’s tips this year include:

1. Get a free copy of your credit report. Visit www.annualcreditreport.com or call 877-322-8228 to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies. AnnualCreditReport.com is the only site consumers can depend on for a truly free credit report with no strings attached. To learn more about credit, mortgages, debt collection, and other financial issues visit www.ftc.gov/credit.
2. Stay safe online. The Internet provides access to information, entertainment, financial offers – in short, a world of countless products and services. But unless security software is used and kept up-to-date, consumers can be left vulnerable to scammers, identity thieves, phishers, and more. Computer security is available – in plain language – at www.onguardonline.gov.
3. Deter identity theft. Information packages at www.ftc.gov/idtheft can help deter, detect, and defend against ID theft, and minimize the damage it can cause. Consumers who are concerned that they may be a victim of identity theft can visit www.ftc.gov/idtheft or call 877-ID-THEFT.
4. Foil a phone fraudster. Criminals use the phone to commit many different types of fraud, including sweepstakes and lottery frauds, loan fraud, buying club memberships, and credit card scams. Find out how to avoid them at www.ftc.gov/phonefraud.
5. Register a number. The National Do Not Call Registry gives consumers a choice about whether to receive telemarketing calls at home. Legitimate telemarketers should not call phone numbers that have been on the Registry for 31 days. If calls are received, consumers can file a complaint with the FTC. To register a home or mobile phone number for free, visit www.donotcall.gov or call 888-382-1222 from the number to be registered.
6. Teach a kid about commerce. Take a kid to www.ftc.gov/youarehere – a virtual mall with interactive activities that provide lessons about advertising, marketing, and the benefits of competition. At this free site, kids can design and print advertisements, uncover suspicious claims in an ad, and play games that reveal the secrets behind pricing.
7. Save your energy. Consumers can save energy and money – whether they are buying a new refrigerator or trying to reduce their home heating and cooling bills. Find out how to save money in virtually every room of the home at www.ftc.gov/energysavings.
8. Have some healthy skepticism. Consumers can learn how to spot health scams, such as fake cancer cures and bogus weight loss products, and do some research on buying generic drugs, Lasik eye surgery, and using dietary supplements. Consumers can learn about rights they may not even know they had – like the right to obtain a copy of prescriptions for eyeglasses or contact lenses at www.ftc.gov/health.
9. Report a rip-off. Your complaints can help detect patterns of wrong-doing, and lead to investigations and prosecutions. The FTC enters all complaints it receives into Consumer Sentinel, a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide. File your complaint at www.ftccomplaintassistant.gov

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. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

(FYI nine tips)

"The marketers of dietary supplements that purportedly prevented and treated diabetes have settled Federal Trade Commission charges that they engaged in deceptive advertising practices. According to the FTC’s complaint, Glucorell, Inc. and Anafit, Inc., both based in Orlando, Florida, made false and unsubstantiated claims that two dietary supplements, Insulow and Glucorell R, are effective for preventing and treating diabetes.

Along with statements in their ads such as “Insulow® may be the only thing between you . . . and a needle,” the defendants also made unsubstantiated claims that Insulow prevents or reduces the risk of developing Type 2 diabetes; is an effective treatment for Type 1 and Type 2 diabetes; lowers high blood sugar levels; prevents or reverses insulin resistence; increases fat loss and decreases insulin-related obesity; and enables diabetics to reduce or eliminate the amount of drugs and insulin required to keep blood sugar levels healthy and reduce insulin resistance, according to the complaint. The Commission also alleged that the defendants falsely advertised that all of these claims except the last had been proven by clinical studies.

The complaint also alleges that the defendants made unsubstantiated claims about Glucorell R. The defendants’ advertisements allegedly claimed that Glucorell R is effective for treating Type 2 diabetes, prevents or reduces the risk of developing Type 2 diabetes, and is effective in treating and preventing cancer. According to the complaint, the defendants also falsely advertised that the last two Glucorell R claims were proven by clinical studies.

According to papers filed with the court, Glucorell, Inc. has been primarily responsible for packaging, distributing, and selling Insulow, and has marketed both supplements; while Anafit, Inc., has been responsible for packaging, distributing, selling, and marketing only Glucorell R.

Under the terms of the order approved by the U.S. District Court for the Middle District of Florida on October 27, 2008, the defendants are prohibited from making the claims challenged in the complaint unless such claims are truthful, not misleading, and substantiated by competent and reliable scientific evidence. The defendants are also prohibited from making representations about the benefits, performance, or efficacy of any dietary supplement, food, or drug without competent and reliable scientific evidence.

The order contains a judgment of $493,545, which is the total amount the defendants received in sales for Glucorell R and Insulow between January 2005 and May 2008. However, the entire judgment is suspended due to their inability to pay. If it is determined that the financial information given to the FTC was untruthful, then the full amount of the judgment will automatically become due.

The complaint also names two of the companies’ principals, Laurence Berube and Jerel Scott Ferguson, as defendants. Both individuals have agreed to the terms of the stipulated order.
The order contains various record keeping provisions to assist the FTC in monitoring the defendants’ compliance.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant or respondent has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

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. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Betsy Lordan
Office of Public Affairs
202-326-3707

STAFF CONTACT:

Alysa Bernstein
Bureau of Consumer Protection
202-326-3289

(Gluco NR.wpd)
(FTC File No. 072-3180)
(Civil Action No. 6:08cv-1649-Orl-35KRS)"