News from the Federal Trade Commission
- October 2011
Reebok International Ltd.
has agreed to pay $25 million in
customer refunds to settle charges it
deceptively advertised its toning shoes.
Reebok claimed its EasyTone and RunTone
shoes would tone and strengthen leg and butt
muscles more than regular shoes because of
"micro instability” created by pockets of
moving air — claims the company couldn't
support, alleges the FTC. If you bought
Reebok's EasyTone or RunTone shoes or
apparel, you might be eligible for a refund.
ftc.gov/reebok to learn more. While
you're at it, check out the FTC's
How's That Work-Out Working Out? Tips on
Buying Fitness Gear.
A Cold Four or Five
The marketers of supersized,
high-alcohol Four Loko have agreed to
re-label and repackage the carbonated malt
to resolve charges of deceptive advertising.
According to the FTC, Phusion Projects, LLC,
claimed a 23.5-ounce can of Four Loko
contains as much alcohol as one or two
regular 12-ounce beers. In reality, the FTC
says, a can contains as much alcohol as four
or five beers, so someone drinking one can
would be binge drinking. Under the
settlement, Phusion Projects will disclose
the amount of alcohol, compared to the
amount found in regular beers, on its
high-alcohol flavored malt beverages, and
soon will start using resealable containers.
Under a settlement with the FTC, a
who allegedly sent millions of spam text
messages pitching mortgage modification
services has been banned from sending any
more unsolicited messages. The FTC says the
defendant, Phil Flora, misrepresented that
he was affiliated with a government agency
and sold the phone numbers of people who
responded — positively or negatively — as
"debt settlement leads” to third parties.
Per the FTC's request, a company
that allegedly used abusive tactics to
collect debts and that deceived its
small-business clients has been stopped.
According to the FTC's complaint, the people
behind Rumson, Bolling & Associates harassed
and abused people, using obscene and profane
language, and threatening to harm or kill
them and their pets, or desecrate the bodies
of their deceased relatives. They also
improperly revealed debts to people's
employers and others, and falsely threatened
lawsuits and arrest. When it came to their
clients, the defendants allegedly kept more
money than they were entitled to after
collecting a debt, and asked businesses to
pay for lawsuits that never were brought.
For more on the rules for debt collectors,
Debt Collection FAQs: A Guide for Consumers.
good news for 100 small businesses
defrauded in a debit and credit card
processing scheme: your refund is in the
mail. According to the FTC, the defendants
falsely promised that switching to their
service would save the businesses hundreds
to thousands of dollars a year in processing
fees. They also failed to disclose their
fees, and concealed pages of fine print
until the contracts were signed.
Good news for retailers, too: if you
let people pay with credit or debit cards,
some new rules — like caps on some debit
card interchange fees — may help lower your
cost of doing business. The FTC, one of
several federal agencies enforcing the
materials explaining what's new.
Contact the FTC with questions or
comments about how the rules are being put
A payday lending operation
that tried illegally to garnish
has agreed to stop
after an action was filed in U.S. district
court. The FTC alleged that Payday
Financial, LLC, which advertised online and
on TV, along with other defendants, tried
illegally to garnish people's wages without
getting a court order to collect payments on
payday loans. When a person didn't pay back
a loan on time, the defendants sent
documents to the employer that mimicked
those used by federal agencies. As a result,
the FTC says, the defendants not only
illegally revealed people's supposed debts
to their employers, but also deprived them
of their right to dispute the debts or make
"The FTC wants national advertisers to
understand that they must exercise some responsibility
and ensure that their claims for fitness gear are
supported by sound science."
— David Vladeck, Director, Bureau of
A New Look
Feel like you're up to snuff when it comes to
internet safety and security know-how? Visit
OnGuardOnline.gov to find
out. You'll find practical tips and Resources, a new
cybersecurity blog, and an easy way to subscribe to
updates via e-mail. Created by a partnership of 16
federal agencies led by the FTC, OnGuardOnline.gov
a one-stop source of free information
for your home, school, community group, or
Facial Recognition Technology Workshop
The FTC, Department of Justice, and
Department of Education
have issued their annual report to Congress
describing the agencies' continued efforts to combat
scholarship and financial aid fraud.
IN OTHER NEWS:
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Paul S. Richard
President - Executive Director
Institute of Consumer
Financial Education (ICFE)
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.