Software Industry Announcements and News
Widespread Data Breaches Uncovered by FTC Probe
[ No Comments ] Posted on 02.22.10 under Government News, Security & Privacy
FTC Warns of Improper Release of Sensitive Consumer Data on P2P File-Sharing Networks
The Federal Trade Commission has notified almost 100 organizations that personal information, including sensitive data about customers and/or employees, has been shared from the organizations’ computer networks and is available on peer-to-peer (P2P) file-sharing networks to any users of those networks, who could use it to commit identity theft or fraud. The agency also has opened non-public investigations of other companies whose customer or employee information has been exposed on P2P networks. To help businesses manage the security risks presented by file-sharing software, the FTC is releasing new education materials that present the risks and recommend ways to manage them.
Peer-to-peer technology can be used in many ways, such as to play games, make online telephone calls, and, through P2P file-sharing software, share music, video, and documents. But when P2P file-sharing software is not configured properly, files not intended for sharing may be accessible to anyone on the P2P network.
“Unfortunately, companies and institutions of all sizes are vulnerable to serious P2P-related breaches, placing consumers’ sensitive information at risk. For example, we found health-related information, financial records, and drivers’ license and social security numbers–the kind of information that could lead to identity theft,” said FTC Chairman Jon Leibowitz. “Companies should take a hard look at their systems to ensure that there are no unauthorized P2P file-sharing programs and that authorized programs are properly configured and secure. Just as important, companies that distribute P2P programs, for their part, should ensure that their software design does not contribute to inadvertent file sharing.”
As the nation’s consumer protection agency, the FTC enforces laws that require companies in various industries to take reasonable and appropriate security measures to protect sensitive personal information, including the Gramm-Leach-Bliley Act and Section 5 of the FTC Act. Failure to prevent such information from being shared to a P2P network may violate such laws. Information about the FTC’s privacy and data security enforcement actions can be found at www.ftc.gov/privacy/privacyinitiatives/ promises_enf.html.
The notices went to both private and public entities, including schools and local governments, and the entities contacted ranged in size from businesses with as few as eight employees to publicly held corporations employing tens of thousands. In the notification letters, the FTC urged the entities to review their security practices and, if appropriate, the practices of contractors and vendors, to ensure that they are reasonable, appropriate, and in compliance with the law. The letters state, “It is your responsibility to protect such information from unauthorized access, including taking steps to control the use of P2P software on your own networks and those of your service providers.”
The FTC also recommended that the entities identify affected customers and employees and consider whether to notify them that their information is available on P2P networks. Many states and federal regulatory agencies have laws or guidelines about businesses’ notification responsibilities in these circumstances.
Samples of the notification letters can be found at: http://www.ftc.gov/os/2010/02/100222sampleletter-a.pdf, http://www.ftc.gov/os/2010/02/100222sampleletter-b.pdf, http://www.ftc.gov/os/2010/02/100222sampleletter-c.pdf. The fact that a company received a letter does not mean that the company necessarily violated any law enforced by the Commission. Letters went to companies under FTC jurisdiction, as well as entities such as banks and public agencies over which the agency does not have jurisdiction.
The FTC appreciates the assistance of the Department of Health and Human Services, the Securities and Exchange Commission, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the Office of Comptroller of the Currency.
The new business education brochure – titled Peer-to-Peer File Sharing: A Guide for Business – is designed to assist businesses and others as they consider whether to allow file-sharing technologies on their networks, and explain how to safeguard sensitive information on their systems, and other security recommendations. This information is available at www.ftc.gov/bcp/edu/pubs/business/idtheft/bus46.shtm. Tips for consumers about computer security and P2P can be found at www.onguardonline.gov/topics/p2p-security.aspx.
The Federal Trade Commission works for the consumer 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, click http://www.ftccomplaintassistant.gov
or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.
FTC Cracks Down on Con Artists Who Target Jobless Americans
[ No Comments ] Posted on 02.17.10 under Government News
FTC Cracks Down on Con Artists Who Target Jobless Americans
Scams Prey on Victims of the Recession With Bogus Job, Money-Making Schemes
The Federal Trade Commission today announced a new crackdown on con artists who are preying on unemployed Americans with job-placement and work-at-home scams, promoting empty promises that they can help people get jobs in the federal government, as movie extras, or as mystery shoppers; or make money working from their homes stuffing envelopes or assembling ornaments.
With the U.S. unemployment rate just under 10 percent, the FTC is redoubling its efforts to put a stop to these schemes, which make life even more difficult for hundreds of thousands of Americans already wrestling with the economic downturn.
As part of the law enforcement sweep announced today, dubbed “Operation Bottom Dollar,” the FTC has filed seven cases against the operators of deceptive and illegal job and money-making scams and announced developments in four previously filed job scam cases. In addition, the sweep includes 43 criminal actions by the Department of Justice, many involving the substantial assistance of the U.S. Postal Inspection Service, as well as one additional civil action by the Postal Inspection Service and 18 actions by state attorneys general.
During a joint press conference today at the FTC, David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection, was joined by Tony West, Assistant Attorney General for the Civil Division of the Department of Justice; Ohio Attorney General Richard Cordray; and a Grandview, Texas, job seeker who lost money to a company that made false promises of full-time work with benefits. The FTC also announced partnerships with the online job placement service Monster.com, the search engine Bing, by Microsoft, and the centralized network of online communities Craigslist, to help job seekers recognize job scams so they can avoid being victimized. Monster, Careerbuilder, Bing and Craigslist will display FTC consumer education material to people who are using the companies’ Web sites to look for jobs.
“Federal and state law enforcement officials will not tolerate those who take advantage of
consumers in times of economic misfortune,” Vladeck said. “If you falsely advertise that you will connect people with jobs or with opportunities for them to make money working from home, we will shut you down. We will give your assets to the people you scammed, and, when
it’s appropriate, we’ll refer you to criminal authorities for prosecution.”
“Employment and business opportunity fraud causes terrible hardship to those who are suffering the most in these difficult economic times,” said Assistant U.S. Attorney General Tony West. “The Justice Department is committed to prosecuting those who defraud through false promises of employment or financial success.”
To help consumers avoid being conned by employment scams, the FTC has produced a new consumer education video in English and Spanish. Still shots from the Web sites of some of the operators charged in this law enforcement sweep, as well as video footage of FTC Consumer Protection Director Vladeck, and Monica Vaca, an Assistant Director in the FTC’s Division of Marketing Practices, will also be available. To view them, go ftc.gov/jobscams and youtube.com/ftcvideos. For access to higher resolution versions, visit aperturefilms.com/ftc or contact the FTC’s Office of Public Affairs.
Operation Bottom Dollar: FTC Law Enforcement Actions
The FTC announced seven new cases against promoters of the job and money-making scams, including one that victimized more than 100,000 people. This brings to 11 the number of cases the agency has brought since last spring challenging these types of operations. In each case, the FTC got a court order temporarily barring these operators from continuing their deceptive, illegal tactics and freezing their assets. The FTC also is asking the courts for permanent orders that would allow the agency to try to get money back to reimburse victims. In two of the matters announced today, criminal authorities executed search warrants, and arrested the two operators of one of the businesses.
In the law enforcement actions announced today, the FTC charged that:
Government Careers Inc. and three principals preyed on job seekers since at least March 2009 by running deceptive ads on job Web sites. Government Careers claimed it could help people get postal, border patrol, and wildlife jobs as well as administrative support and clerical positions with the federal government. It told people they could get these jobs if they paid $119 for study materials, which would allow them to pass any required test with a score of 95 percent or better. But according to the FTC complaint, those who paid the fee found that there are no exams for the positions they sought, or that the supposed job vacancies did not exist. The company also hawked career counseling services, charging $965 for services like resume editing and employment exam preparation. Although the defendants said that consumers would not have to pay the fee until they got a government job, the defendants demanded payment before consumers obtained the promised jobs. The Arizona Attorney General’s Office is the FTC’s co-plaintiff in this case, which was filed in the U.S. District Court for the District of Arizona. After the court issued a temporary restraining order, the defendants agreed to an interim order that prohibits any alleged misconduct pending resolution of the case.
Real Wealth, Inc. and its principal allegedly conned more than 100,000 people by selling them booklets that supposedly explained how they could earn money by applying for government grants and working from home mailing postcards and envelopes. Using direct mail campaigns that sometimes targeted the elderly and disabled, Real Wealth lured consumers, according to the FTC complaint, with deceptive solicitations such as “Collect up to $9,250 with my simple 3 minute form” or “All I do is mail 30 postcards everyday and I make an extra $350 a week!” Real Wealth also claimed that consumers could “rake in up to $1,500+ per week or more in solid cash” by learning “secrets” about the “$700 billion banking industry bailout.” This case was filed in the U.S. District Court for the Western District of Missouri. After the court issued a temporary restraining order, the defendants agreed to an interim order that prohibits any alleged misconduct pending resolution of the case.
Darling Angel Pin Creations and two principals allegedly claimed on the Internet and in newspaper advertisements that by purchasing a starter kit, consumers could earn up to $500 per week assembling angel pins, and that no experience, special tools, or sewing skills were required. Consumers paid between $22 and $45 to get started, and sometimes paid hundreds more for the supplies they would need to make the pins. However, according to the FTC’s complaint, there was a catch: Consumers were required to have one of their assembled angel pins approved by the company before they could make any money – but the company rejected nearly all the angel pins consumers submitted, no matter how well-made. The FTC charged that the defendants made false and baseless claims that consumers could earn substantial income from angel pin assembly, when in fact they could not. This case was filed in the U.S. District Court for the Middle District of Florida, Tampa Division. After the court issued a temporary restraining order, the court issued interim orders with regard to all the defendants in the case prohibiting further misconduct.
Abili-Staff, Ltd., two principals, and a related entity sold supposed work-at-home opportunities online. Billing itself as a “scam free” and “legitimate” job search service, Abili-Staff sold supposedly pre-screened lists of jobs, telling consumers they could access the lists after paying a fee ranging from $29.98 to $89.99, according to the FTC’s complaint. The FTC alleged that defendants falsely told consumers they would have unlimited access to more than 1,000 work-at-home job listings, and that they would get their money back if they did not get a job. This case was filed in the U.S. District Court for the Western District of Texas, San Antonio Division. The court issued a temporary restraining order pending a preliminary injunction hearing held February 16-17, 2010.
Entertainment Work, Inc. and two principals marketed memberships in a Web site that was supposed to list jobs as movie extras, jobs on television, or jobs in print media. By telemarketing and placing advertisements on Web sites and in newspapers across the country, the defendants sold trial memberships for $19.95 to $24.95, and automatically converted those into annual memberships for an additional fee of $80 after two weeks, according to the FTC complaint. The FTC charged that Entertainment Work deceptively claimed consumers would
find entertainment and media jobs near where they lived, without regard to their experience, skills, or appearance. The complaint also charged that the company failed to disclose that to cancel their membership, people would have to pay an additional fee or undertake a burdensome process. This case was filed in the U.S. District Court for the Southern District of Florida. The defendants have agreed to an interim court order that immediately halts the alleged misconduct.
Independent Marketing Exchange, Inc. and its principal allegedly made false earnings claims, and additional misrepresentations in the course of selling a smorgasbord of work-at-home opportunities, including an envelope mailing opportunity, a postcard mailing opportunity, and a mystery shopper opportunity. Their deceptive practices have injured numerous consumers, including stay-at-home and single mothers. The FTC’s complaint alleged that the defendants falsely represented to consumers that they could make substantial amounts of money. The case was filed in the U.S. District Court in the District of New Jersey. After the court issued a temporary restraining order, the defendants agreed to an interim order pending a further hearing.
Preferred Platinum Services Network and the husband-and-wife team who owned and operated it allegedly marketed a work-from-home scheme in which consumers were told they could earn significant sums by labeling postcards describing a non-existent product promoted by Preferred Platinum called “mortgage accelerator.” Advertised in local pennysavers and newspaper classified sections, and at the defendants’ Web site, the scheme touted earnings of up to $1 per postcard, as well as a 60-day money-back guarantee. Consumers paid an enrollment fee of $80 to $90, and they typically did not learn until later that they would have to pay $40 more for each additional batch of 100 postcards, according to the FTC complaint. At the same time this matter was filed, criminal authorities executed search warrants on the business and arrested the husband-and-wife team, charging each of them with one count of mail fraud. This case was filed in the U.S. District Court for the District of New Jersey. The court issued a temporary restraining order, followed by a preliminary injunction on February 16, 2010. Both individual defendants also have been indicted by a grand jury.
In addition to the seven cases announced today, since last summer, the FTC has settled or litigated four law enforcement actions stemming from employment and work-at-home scams:
Job Safety USA. Principal Wagner Ramos Borges allegedly systematically offered phony jobs to people seeking maintenance and cleaning work. The U.S. District Court for the District of Maryland Greenbelt Division, issued a default judgment ordering Borges to pay $414,900 – which is the estimated amount of his profits during the period covered by the FTC complaint. http://www.ftc.gov/opa/2009/07/shortchange.shtm
Career Hotline, Inc. Career Hotline took money from job seekers by guaranteeing them jobs that paid at least $25,000 per year, according to the FTC complaint. The federal court in the Middle District of Florida issued a default judgment against Career Hotline ordering the company to pay $75,000, which is the estimated amount of money job seekers lost to this scam. In addition, the company’s principal, Susan Bright, reached a settlement with the FTC that prohibits her from deceiving consumers about job availability, salaries, access to interviews, job listings and refunds. The settlement order also includes a suspended judgment against her because she is financially unable to pay, but the full judgment will become due immediately if Bright misrepresented her financial condition. http://www.ftc.gov/opa/2009/08/hotline.shtm
Penbrook Productions. The FTC complaint alleged that in this online scam, principal Michael Allen Brooks used fictional spokesperson “Angela Penbrook” to entice consumers to become “certified” rebate processors, supposedly earning as much as $225 per hour. A settlement approved February 10, 2010 by the U.S. District Court for the Central District of California requires the defendants to pay $125,000 within 10 days, plus a significant additional amount from assets they own that are to be liquidated. The settlement bars the defendants from making or assisting others to make deceptive claims in connection with work-at-home, franchise, or business opportunities. http://www.ftc.gov/opa/2009/07/shortchange
International Marketing and principal Zolio Cruz Carrion falsely promised Spanish- speaking consumers substantial income for stuffing envelopes, and was charged in an FTC complaint filed in the U.S. District Court for the District of Puerto Rico in 2008. The court granted the FTC’s motion to hold Cruz in contempt for failing to comply with an earlier order and briefly jailed him for contempt. It also prohibited him from marketing any business, employment, investment or work-at-home opportunity. http://www.ftc.gov/opa/2009/12/intermarketing.shtm
The FTC would like to acknowledge the assistance of: AARP’s Legal Counsel for the Elderly; United States Postal Inspection Service, Tampa Field Office; Better Business Bureaus of Southern Arizona, West Florida, New Jersey, the Southland (Southern California), and Coastal, Central, & Southwest Texas; U.S. Attorneys for the Southern District of New York, New Jersey and Western District of Missouri; Attorney General’s Offices of Florida, New Jersey and Pennsylvania; Florida Department of Agriculture and Consumer Service; Washington State Department of Financial Institutions, Securities Division Los Angeles County Department of Consumer Affairs; Ocean County New Jersey Department of Consumer Affairs; and the Tucson Police Department.
The enforcement actions announced today named the following defendants: Government Careers Inc. – Jon Coover; Richard Friedberg; and Rimona Friedberg. Abili-Staff, Ltd. – Pamela Barthuly; Jorg Becker; and Equitron, LLC. Darling Angel Pin Creations, Inc. – Shelly R. Olson and Judith C. Mendez; d/b/a/Angel Pin Creations. Entertainment Work, Inc. – Jason Barnes and Racquelle Barnes; d/b/a Resource Publishing Co. Independent Marketing Exchange, Inc. – Wayne Verderber, II, d/b/a as National Data Management, N.D.M., Global Mailing Services, G.M.S., Independent Mailing Services, Independent Mailing Services, Inc., I.M.S., Independent Shoppers Network, Independent Shoppers, Success At Home, Success-At-Home Mailing, IMEX, IMEX, Inc., and Continental Publishing Company. Preferred Platinum Services Network – Rosalie Florie; d/b/a Home Based Associate Program and PPSN, LLC. and Philip D. Pestrichello, individually. Real Wealth, Inc. – Lance Murkin; doing business as American Financial Publications, Emerald Press, Financial Research, National Mail Order Press, Pacific Press, United Financial Publications, Wealth Research Group, and Wealth Research Publications.
NOTE: The Commission authorizes the filing of complaints 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. A complaint is not a finding or ruling that the defendants have actually violated the law. Stipulated final orders are for settlement purposes only and do 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.
Copies of the documents related to these cases are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 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 1,700 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.
Justice Department Announces New Intellectual Property (IP) Task Force as Part of Broad IP Enforcement Initiative
[ No Comments ] Posted on 02.12.10 under Government News
WASHINGTON—Attorney General Eric Holder today announced the formation of a new Department of Justice Task Force on Intellectual Property as part of a Department-wide initiative to confront the growing number of domestic and international intellectual property (IP) crimes.
“The rise in intellectual property crime in the United States and abroad threatens not only our public safety but also our economic well-being. The Department of Justice must confront this threat with a strong and coordinated response,” said Attorney General Holder. “This task force will allow us to identify and implement a multi-faceted strategy with our federal, state and international partners to effectively combat this type of crime.”
The attorney general’s announcement follows a summit meeting convened last December by Vice President Biden, a long-standing champion of U.S. intellectual property rights-holders. At that meeting, which was attended by Attorney General Holder and other cabinet heads, the vice president discussed the importance of stronger enforcement and supported actions to raise the priority of combating IP theft and improving coordination—including the establishment of an intellectual property task force at the Department of Justice.
“Theft of intellectual property does significant harm to our economy and endangers the health and safety of our citizens,” said Vice President Biden. “This administration is committed to stronger and stricter enforcement of intellectual property rights, and this new task force is a step in the right direction.”
The task force, to be chaired by the deputy attorney general, will focus on strengthening efforts to combat intellectual property crimes through close coordination with state and local law enforcement partners as well as international counterparts. It will also monitor and coordinate overall intellectual property enforcement efforts at the Department, with an increased focus on the international aspects of IP enforcement, including the links between IP crime and international organized crime. Building on previous efforts in the Department to target intellectual property crimes, the task force will also serve as an engine of policy development to address the evolving technological and legal landscape of this area of law enforcement.
As part of its mission, the task force will work closely with the recently established Office of the Intellectual Property Enforcement Coordinator (IPEC), housed in the Executive Office of the President and charged with drafting an administration-wide strategic plan on intellectual property. As part of its mission, the task force will assist IPEC in recommending improvements to intellectual property enforcement efforts.
“Americans produce more technologies, more brands, more creative works and more innovation than any other nation on Earth,” said Victoria Espinel, the U.S. intellectual property enforcement coordinator. “President Obama is committed to ensuring that the value created by American workers and enjoyed by communities around the world is protected. The Justice Department’s new task force will play a critical role in supporting the administration’s ongoing efforts to protect American intellectual property and the millions of jobs that depend on it.”
The task force will include representatives from the offices of the attorney general, the deputy attorney general, and the associate attorney general; the Criminal Division; the Civil Division; the Antitrust Division; the Office of Legal Policy; the Office of Justice Programs; the Attorney General’s Advisory Committee; the Executive Office for U.S. Attorneys, and the FBI.
As part of its broader intellectual property initiative, the Department will also step up policy engagement with foreign law enforcement partners, develop a plan to expand civil IP enforcement efforts, and leverage existing partnerships with federal agencies and independent regulatory authorities such as the Department of Homeland Security and the Federal Communications Commission.
BBB, FTC, and Visa Partner to Educate Consumers about Online Scams
[ Comments Off ] Posted on 12.25.09 under Government News, Security & Privacy
Twenty-nine percent of online U.S. consumers victimized by deceptive marketing
Washington, DC – December 17, 2009 – Today Better Business Bureau joined the Federal Trade Commission and Visa Inc. (NYSE: V) in a press conference to alert consumers to online deceptive marketing practices associated with free trials with a negative option feature. According to a Visa survey, 29 percent of American consumers have fallen victim to deceptive marketing when unscrupulous e-commerce merchants require them to cancel or opt-out of a recurring charge for future products or services.
With free trials with a negative option feature, a company takes a consumer’s failure to cancel as permission to begin charging. While many merchants use this billing process appropriately, others pre-check consent boxes, bury the details of the offers in the terms and conditions and make cancellations or returns difficult, catching consumers in a cycle of recurring charges for products and services they do not want.
“Most e-commerce merchants care about their customers and conduct business fairly, but even a few bad actors can cause consumer distrust,” said William M. Sheedy, Group President, The Americas, Visa Inc. “We want to let consumers know more about the protections they have against these types of practices and how to pursue a reversal of charges if they’ve been charged improperly.”
Visa monitors its payment network to identify merchants with excessive levels of cardholder disputes which may indicate the use of deceptive marketing practices. In fact, merchants who use deceptive marketing practices have up to 20 times as many consumer disputes as the average e-commerce merchant. Visa requires the merchant and its bank to take corrective action to reduce excessive consumer disputes, or risk termination of Visa acceptance privileges.
According to Better Business Bureau, consumers should research the business before they buy. “Online trial offers for acai berry supplements, colon cleanser and detox products, teeth whiteners, free government grants and debt consolidation services may sound risk-free, but BBB has received thousands of complaints from people who learned the hard way that a free trial can cost a lot of money in the end,” said Steve Salter, Vice President of BBBOnline. “Before handing over debit or credit card numbers to any business online, shoppers should always check the company’s Reliability Report® first with BBB.”
Visa, the FTC and BBB offers tips to online shoppers on how to spot deceptive free trial offers and deceptive negative option features, and how to deal with unauthorized charges:
* Take time to read and understand all terms and conditions, so a free trial doesn’t turn into a costly purchase you didn’t intend to make.
* Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you’re not interested in.
* Review card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.
* Try to resolve the situation with the merchant. If you’re unsuccessful, contact the card issuer immediately to dispute the charge.
David Vladeck, Director of the Bureau of Consumer Protection said, “Online shoppers: If you see charges on your statement or debits that you didn’t authorize, fight it. Start by contacting the merchant. If you are unable to contact the merchant or they can’t or won’t help, call your card issuer and then file a complaint with the FTC. You can do that online at ftc.gov or by phone at 1-877-FTC-HELP.”
The FTC has outlined five principles regarding the appropriate use of negative options, which call for:
* Disclosing material terms in an understandable manner, without making them unnecessarily long or inconsistent;
* Making the disclosures clear and conspicuous by placing them where consumers are likely to look on Web pages, by labeling disclosures (and links to them) to indicate their importance and relevance, and by using easy-to-read fonts and colors;
* Disclosing the offer’s material terms before the consumer incurs a financial obligation;
* Getting consumers’ affirmative consent to the offer by, for example, having them click “I Agree” And without relying on pre-checked boxes;
* Not impeding the effective operation of promised cancellation procedures and honoring cancellation requests that comply with such procedures.
Consumers who think they’ve been victims of deceptive marketing and who haven’t been able to resolve the issue directly with the merchant should call their card issuer to dispute the charge. They also may report their experiences to the FTC at www.ftc.gov/complaint or their local BBB at www.bbb.org. More information is available at www.visa.com/negativeoption.
Pop-up Advertisements Offering Anti-virus Software Pose Threat to Internet Users
[ Comments Off ] Posted on 12.23.09 under Government News, Security & Privacy
An ongoing threat exists for computer users who, while browsing the Internet, began receiving pop-up security warnings that state their computers are infected with numerous viruses.
These pop-ups known as scareware, fake, or rogue anti-virus software look authentic and may even display what appears to be real-time anti-virus scanning of the user’s hard drive. The scareware will show a list of reputable software icons; however, the user cannot click a link to go to the actual site to review or see recommendations.
The scareware is intimidating to most users and extremely aggressive in its attempt to lure the user into purchasing the rogue software that will allegedly remove the viruses from their computer. It is possible that these threats are received as a result of clicking on advertisements contained on a website. Cyber criminals use botnets to push the software and use advertisements on websites to deliver it. This is known as malicious advertising or malvertising.
Once the pop-up appears it cannot be easily closed by clicking “close” or the “X” button. If the user clicks on the pop-up to purchase the software, a form is provided that collects payment information and the user is charged for the bogus product. In some instances, whether the user clicks on the pop-up or not, the scareware can install malicious code onto the computer. By running your computer with an account
that has rights to install software, this issue is more likely to occur.
Downloading the software could result in viruses, Trojans and/or keyloggers being installed on the user’s computer. The repercussions of downloading the malicious software could prove further financial loss to the victim due to computer repair, as well as, cost to the user and/or financial institutions due to identity theft.
The assertive tactics of the scareware has caused significant losses to users. The FBI is aware of an estimated loss to victims in excess of $150 million.
Be cautious — cyber criminals use easy to remember names and associate them with known applications. Beware of pop-ups that are offering a variation of recognized security software. It is recommended that the user research the exact name of the software being offered.
Take precautions to ensure operating systems are updated and security software is current.
If a user receives these anti-virus pop-ups, it is recommended to close the browser or shut the system down. It is suggested that the user run a full, anti-virus scan whenever the computer is turned back on.
If you have experienced the anti-virus pop-ups or a similar scam, please notify the IC3 by filing a complaint at www.IC3.gov.
FTC Lodges Contempt Charge Against BlueHippo
[ Comments Off ] Posted on 11.28.09 under Government News
Company Pocketed More Than $15 Million From Consumers Last Year, But Almost None Received a Computer
The Federal Trade Commission has asked a federal court to issue a contempt order against BlueHippo, a company that collected more than $15 million from consumers based on claims that it would finance their purchases of new computers, but delivered neither the financing nor the financed computers, in violation of a 2008 court order. The FTC alleged that less than one percent of consumers who signed up with BlueHippo received the financed computers they applied for, and undisclosed conditions to redeem “store credits” were rigged to discourage consumers from using them.
In a contempt motion lodged with the court today, the FTC charged that BlueHippo has flouted a settlement reached with the agency last year, continuing to deceive thousands of financially strapped consumers with phony promises that it would help them purchase a computer even if they have credit problems. The FTC also is asking the court to order BlueHippo to compensate injured consumers and bar BlueHippo from similar conduct in the future.
“Years of broken promises by BlueHippo have left consumers seeing red,” said FTC Chairman Jon Leibowitz. “We’re putting companies like this on notice: If you mistreat consumers and thumb your nose at the courts, we will hold you accountable.”
The FTC reached a settlement with Baltimore-based BlueHippo in April 2008 that required the company to pay $3.5 million for consumer redress and barred the defendants from further deceiving customers. According to the FTC’s 2008 complaint, BlueHippo Funding, LLC and affiliate BlueHippo Capital, LLC offered to extend credit to consumers to finance purchases of personal computers and other consumer electronics with down payments of $99 to $124, and a year of weekly or bi-weekly payments ranging from $36 to $88. BlueHippo promised to deliver the product once the consumer made 13 weekly payments. But most consumers did not receive the computers they ordered in the time promised, even after they had made 13 weeks of payments, the Commission alleged. The Commission charged that BlueHippo’s marketing tactics were deceptive, and violated the FTC Act and other federal credit statutes.
Even after this settlement order was entered by the court, BlueHippo continued to deceive consumers, according to the FTC. The company aggressively marketed itself as a computer finance company and spent the rest of 2008 signing up customers and taking their money, but failing to provide them with financed computers. The FTC’s contempt motion alleges that between April and December of 2008, more than 35,000 customers contracted for BlueHippo’s computer financing deal. But the company provided, at most, a single financed computer, failing to provide financed computers even for 2,477 customers who managed to meet the companies’ conditions. Complaints about the company poured into the Better Business Bureau. On top of all that, BlueHippo failed to submit a report to the FTC showing how it was complying with the settlement, as required by the order.
Finally, in April, 2009, after the FTC notified the court that BlueHippo was violating the settlement, the company began ordering thousands of computers. Even so, the FTC alleges that BlueHippo failed to order computers for 1,015 of the 2,477 consumers who had qualified for financing by making 13 consecutive payments and completing the required paperwork. For the 1,462 consumers who finally received a computer, BlueHippo did not even order – let alone ship – the computers within the three- to four-week time frame the company had advertised. On average, it took about six months between the time these consumers qualified for their computers and the time BlueHippo ordered the machines, according to the FTC’s contempt motion.
The FTC’s contempt motion also charged that BlueHippo failed to disclose key aspects of its refund policy. In particular, the company promised that while consumers who canceled their order after seven days could not obtain cash refunds, they could get “store credit,” which could be used to buy desktop computers, laptops, monitors, software, and televisions. But it failed to tell consumers that they would have to send a money order to cover undisclosed shipping and handling fees, as well as taxes, even if they had more than enough store credit to cover these costs – and that they could only order one item at a time.
The contempt motion against defendants BlueHippo Funding, LLC; BlueHippo Capital, LLC; and Joseph Rensin was filed in the U.S. District Court for the Southern District of New York.
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 1,700 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.