Cancer Charities Hit With Fraud Charges, Feds Say They Stole $187M From Donors

Via USA Today:

Charities that claimed their funds were helping patients fighting cancer but were actually spending the bulk of donations on vacations, concerts and other luxurious perks are facing federal charges that they stole more than $187 million from consumers in one of the biggest charity fraud cases ever filed. The Federal Trade Commission, along with law enforcement officials throughout the U.S., filed the complaint against the Cancer Fund of America, Children's Cancer Fund of America, The Breast Cancer Society and Cancer Support Services, along with several of those organizations' executives.

"The defendants' egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support," Jessica Rich, director of the Federal Trade Commission's Bureau of Consumer Protection, said in a statement. "The defendants took in millions of dollars in donations meant to help cancer patients, but spent it on themselves and their fundraisers. I'm pleased that the FTC and our state partners are acting to end this appalling scheme."

The Children's Cancer Fund of America and its president and executive director, Rose Perkins [PHOTO], along with The Breast Cancer Society and its executive director, James Reynolds II, and Cancer Support Services' chief financial officer, Kyle Effler, have agreed to settle the charges that they are facing. The three executives will be barred from managing charities, fundraising and overseeing charity assets. The Children's Cancer Fund of America and The Breast Cancer Society will also go out of business. The other parties in the complaint will continue to face legal action.

US Rep. Ted Lieu To Introduce Bill To Ban "Ex-Gay" Torture As Fraudulent Practice

Chris Geidner reports at Buzzfeed:

On Tuesday morning, Democratic Rep. Ted Lieu of California will introduce a federal bill to ban commercial efforts to change people’s sexual orientation or gender identity — often called conversion therapy. “The public views conversion therapy as quackery, as something that harms people,” Lieu told BuzzFeed News on Monday afternoon, just after landing back in D.C. from California. “Eventually, I believe Congress will catch up to that, but you do need to start somewhere, so that’s why we’re introducing this legislation.” He faces an uphill battle: The legislation, which would label conversion therapy an “unfair or deceptive act or practice” that would be illegal under the Federal Trade Commission Act, is being introduced with less than three dozen co-sponsors — all of whom are Democrats. Lieu does, however, have a powerful ally in his effort. Minority Leader Nancy Pelosi has signed on as an original co-sponsor of the bill.

While a state Senator in California, Lieu was behind his state's successful ban on the "ex-gay" torture of those under age 18. His federal bill, however, would not limit the ban to minors. Lieu tells Buzzfeed, "Fraud is fraud, whether you practice it on a 16-year-old or a 45-year-old." The SPLC is currently suing an "ex-gay" group in New Jersey on the same grounds.

Feds Fine Online Dating Company For Scamming Money Via Fake Profiles

Via The Hill:

England-based company JDI Dating and its owner, Mark Thomas, were the target of the $616,165 fines. The settlement forbids the company from misrepresenting facts about the service or its cancellation policy in the future. "JDI Dating used fake profiles to make people think they were hearing from real love interests and to trick them into upgrading to paid memberships,” said the FTC's Jessica Rich, who directs consumer protection at the agency. The company, which operates 18 websites, was accused of using computer generated profiles to send messages to users who had created free profiles. The FTC found that messages sent to users who created these free profiles were "almost always fake." Customers could not respond to other members unless they signed up for a subscription fee, usually $10 to $30 a month. The company boasts 12 million members on its website. "The fake profiles and messages caused many users to upgrade to paid subscriptions," the FTC said in a release.

Among JDI Dating's websites are Get Flirting, Flirt Crowd, and Naughty Over Forty. The FTC rejected the company's claim that its posted disclaimer about "virtual cupids" (embiggen the image above) was adequate notice that some messages are fake. The company claims to have 12 million members across its 18 sites.

Feds Crack Down On Scam Diets

A total of $34M in fines, but the products can stay on the market. 

Sensa Products, LLC was also cited for compensating consumers who endorsed Sensa. The consumers received between $1,000 and $5,000 and free trips to Los Angeles for their statements. Sensa Products part-owner and creator Dr. Alan Hirsch, who provided expert opinion, was also said to make statements that were not backed up by scientific evidence. Hirsch and company CEO Adam Goldenberg are banned from making any future weight-loss claims about dietary supplements, foods, or drugs unless it is supported by two controlled, human clinical studies. They cannot make any health-related claims unless they have scientific evidence, and must disclose any connection they have with any product they promote.

LeanSpa LLC promoted an acai berry and “colon cleanse” weight-loss supplement called LeanSpa through sites that were made to look like news organizations. LeanSpa's principal Boris Mizhen and three companies will give up $7 million worth of cash and assets, while Mizhen’s wife, Angelina Strano, will be responsible for $300,000. Strano accepted money from the company, but did not participate in selling the product. The company allegedly charged $79.99 for trying LeanSpa, and made it difficult to cancel recurring monthly shipments. The company can no longer bill consumers for products or services on a recurring basis unless they opt into that option.

My favorite was the skin cream that totally makes you thinner.

FTC Hits Google With Largest Fine Ever

The Federal Trade Commission has fined Google $22.5M for secretly placing tracking cookies on the users of Apple's Safari browser after telling them that they wouldn't. It's the largest tech fine in FTC history.

In its complaint, the FTC charged that for several months in 2011 and 2012, Google placed a certain advertising tracking cookie on the computers of Safari users who visited sites within Google’s DoubleClick advertising network, although Google had previously told these users they would automatically be opted out of such tracking, as a result of the default settings of the Safari browser used in Macs, iPhones and iPads.

According to the FTC’s complaint, Google specifically told Safari users that because the Safari browser is set by default to block third-party cookies, as long as users do not change their browser settings, this setting “effectively accomplishes the same thing as [opting out of this particular Google advertising tracking cookie].” In addition, Google represented that it is a member of an industry group called the Network Advertising Initiative, which requires members to adhere to its self-regulatory code of conduct, including disclosure of their data collection and use practices.

The fine may be the largest ever, but Google leaves that much in the cushions of its couch every day.

FTC Rules Pom Wonderful As Deceptive

Continuing their campaign against food items falsely claiming to bring good health, the Federal Trade Commission has filed a complaint against the makers of Pom Wonderful for "making false and unsubstantiated claims that their products will prevent or treat heart disease, prostate cancer, and erectile dysfunction."

The FTC complaint alleges that POM Wonderful’s heart disease claims are false and unsubstantiated because many of the scientific studies conducted by POM Wonderful did not show heart disease benefit from use of its products. It alleges that the prostate cancer claims are false and unsubstantiated because, among other reasons, the study POM Wonderful relied on was neither “blinded” nor controlled. Finally, it alleges that the erectile dysfunction claims are false and unsubstantiated because the study on which the company relied did not show that POM Juice was any more effective than a placebo.

VitaminWater got the same treatment earlier this month.

Feds Warn Owners Of Defunct Gay Youth Magazine Not To Sell Mailing List

Calling it a "major threat" to public safety, the Federal Trade Commission has issued an unusual warning to the owners of the defunct gay youth title XY Magazine, noting that since many of their former subscribers probably live with their parents, they could be endangered by the sale of its mailing list.

The U.S. Federal Trade Commission has warned two people associated with a now-defunct magazine and Web site for gay teens and young men that they would violate the privacy promises the publication made to subscribers by selling their personal information during a bankruptcy proceeding. The FTC, in a letter sent earlier this month, also suggested that the owners of XY Magazine and XY.com would be violating the privacy standards the company had in place before shutting down if they used the subscribers' personal information in a relaunch of the magazine or Web site. The personal information is listed as part of the debtor's estate in a New Jersey bankruptcy proceeding for Peter Ian Cummings, editor and founder of the magazine. XY Magazine's subscription form said it "never sells its list to anybody." XY.com told prospective subscribers that their magazines would be mailed in shrink-wrapped black plastic so that subscribers' parents couldn't tell what they were getting. XY.com users were told that personal information they submitted "will not be published," the FTC said.

XY Magazine, which published from 1996-2007, claims it possesses the names, email addresses, and street addresses of between 500,000 and one million former readers. The FTC's warning is an astonishingly positive move to protect LGBT youth. Amazing, really.

FTC Suing Robocall Telemarketers

Remember when I grumbled about getting 20 calls a week from scamsters claiming that my car warranty had expired? The FTC is finally suing the fuckers after NY Sen. Chuck Schumer complained that he had been getting the calls during meetings on Capitol Hill.

In two related complaints filed in federal court on Thursday, the FTC said it was taking action against the promoter of the phony extended auto warranties, as well as the telemarketing company that it hired to carry out its allegedly illegal campaign. The FTC filed complaints against four companies and a handful of individuals related to their operations. "This is one of the most aggressive telemarketing schemes the FTC has ever encountered," said FTC Chairman Jon Leibowitz. The agency, which helps prevent fraudulent and deceptive business practices, said the robocalls have prompted complaints from consumers who are either on the "Do Not Call" registry or asked not to be called. According to the agency, five telephone numbers associated with the defendants have generated 30,000 complaints. If consumers answer the call, a "warranty specialist" would mislead them into believing their company was affiliated with an auto dealer or manufacturer and try to sell a service contract between $2,000 and $3,000, according to the FTC. The seller of these false warranties allegedly took in more than $10 million as a result of the phony service contracts.

The FTC is seeking to freeze (and hopefully, seize) the company's assets.

And Yet The Enzyte Ads Continue

Kellogg's has agreed to settle with the Federal Trade Commission for false advertising practices related to its claim that kids who eat Frosted Mini-Wheats for breakfast have a 20% increased attention span over kids who skip breakfast. Because they don't. Not even close.

Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest, a consumer-advocacy group based in Washington, said grocery store aisles have become "a minefield of misleading information." He said he hopes the FTC's announcement signals that the government "will no longer tolerate misleading health claims in food advertising." While smaller companies have made exaggerated health claims, "it's truly disappointing to see a major company like Kellogg's stoop to that level," Silverglade said.

Kellogg's will stop the ads but admits no wrong-doing. Oh, their potential fine? $16K. That'll learn 'em. (I'm still pissed at Kellogg's for dropping Michael Phelps.)

FTC Goes After Credit Report Scammers

The Federal Trade Commission has issued the above parody video as part of their just-launched campaign to warn against a certain "free" credit report company with an incredibly annoying TV ad.

The Federal Trade Commission is getting hip and cool. Today the federal agency launched a series of silly videos to clear up confusion about which Web site offers truly free credit reports. The videos feature a young man jamming on his guitar while singing with friends about checking credit reports on Annualcreditreport.com. That site is the place where, under federal law, people are allowed to receive a free copy of their credit report once each year. The FTC’s videos are a spoof on FreeCreditReport.com, which has advertised its site for years with similar catchy videos of young men singing about their credit and repeating FreeCreditReport.com. Users of FreeCreditReport.com, however, are charged a fee if they do not cancel their membership within seven days of signing up.