Business Blog
A required action after refraction: FTC staff sends cease and desist letters about Eyeglass Rule compliance
By
Lesley Fair
FTC staff has a prescription for certain eyewear prescribers: It’s time to focus on complying with the FTC’s Eyeglass Rule. Cease and desist letters went to 37 prescribers about whom the FTC received complaints of alleged violations of the Rule. The concerns? Did the office fail to automatically provide a patient with their eyeglass prescription immediately upon completion of their eyeglass exam? And did the office require the patient to pay a fee or buy glasses as a condition of releasing the prescription? Both of those practices violate the Eyeglass Rule.
The goal of the Eyeglass Rule is to give people who wear glasses – according to reports, as many of 2/3 of all Americans – the tools they need to comparison shop. Among other things, the Rule requires that prescribers provide the patient a copy of the eyeglass prescription immediately after the eye examination, even if the patient doesn’t ask for it. It’s also illegal for prescribers to charge any fee in addition to the exam fee as a condition of providing a copy of the prescription.
The Rule prohibits prescribers from requiring that patients buy “ophthalmic goods” – eyeglasses and components of eyeglasses – as a condition of providing a copy of the prescription. What’s more, prescribers can’t require patients to sign a waiver or release as a condition of releasing the prescription.
The cease and desist letters remind recipients that violations of the Eyeglass Rule may result in legal action, including civil penalties of up to $50,120 per violation. Staff expects to hear from the recipients within five business days with a description of how they intend to address the reported violations.
Just as eyecare professionals remind patients of the benefits of periodic check-ups, prescribers should consider a check-up of their own. Complying with the Eyeglass Rule is a good place to start. The FTC has three other key takeaways for prescribers:
- Provide the prescription after any eye exam that includes a refraction.
- Provide the prescription before offering to sell the patient glasses.
- If you delegate to a staff member the task of handing the prescription to the patient, make sure your employee is trained in complying with the Rule.
And if you’re one of the millions of Americans who wears glasses, read Buying Prescription Glasses or Contact Lenses: Your Rights before your next eye exam.
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For Release
FTC Acts to Block Payment Processor’s Credit Card Laundering for Tech Support Scammers
Court orders would also require close vetting of high-risk clients
Tags:
- Consumer Protection
- Bureau of Consumer Protection
- deceptive/misleading conduct
- credit cards
- Technology
- Finance
- Advertising and Marketing
- Online Advertising and Marketing
- Credit and Finance
- Payments and Billing
The Federal Trade Commission has acted to stop Nexway, a multinational payment processing company, along with its CEO and chief strategy officer, from serving as a facilitator for the tech support scammers through credit card laundering. The defendants in the case have agreed to court orders that prohibit them from any further payment laundering and require them to closely monitor other high-risk clients for illegal activity. The complaint and orders were filed by the U.S. Department of Justice on behalf of the FTC.
The FTC’s complaint against Nexway (and several of its subsidiaries and an associated company known as Asknet), its CEO Victor Iezuitov, and its chief strategy officer Casey Potenzone charges that the defendants were at the center of several offshore tech support scams, processing tens of millions of dollars in charges and giving the scammers access to the U.S. credit card network.
“Companies like Nexway that knowingly launder charges for scammers are breaking the law and helping scammers cheat money from consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will not hesitate to use its law enforcement powers to stop them.”
“The Department of Justice will not hesitate to pursue and hold accountable payment processors who facilitate tech support scams that defraud consumers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department is committed to protecting consumers from companies that engage in or support deceptive practices.”
According to the complaint, Nexway acted as the payment processor for multiple tech support scams going back to at least 2016, noting that the company’s “premium tech support” clientele accounted for a quarter of all of its business between 2016 and 2020.
The complaint details Nexway’s relationships with tech support scammers, in which Nexway acquired credit card merchant accounts and then used those accounts to collect money from consumers on behalf of the scammers. The complaint charges that Nexway, Iezuitov, and Potenzone were aware that their tech support clients were scammers and directly received numerous complaints about the companies.
The court orders include a number of restrictions and requirements on Nexway and Iezuitov, asknet, and Potenzone:
- Prohibition on credit card laundering: The orders will prohibit the defendants from laundering sales through their merchant accounts.
- Requirement to monitor high-risk clients: The orders require the defendants to screen and monitor any clients they serve who meet criteria that make them an elevated risk of violating the law, and also require them to take action if their clients charge consumers without authorization or violate the Telemarketing Sales Rule (TSR).
- Prohibition on payment processing or assisting tech support scammers: The orders will prohibit the defendants from engaging in payment processing for tech support companies that use pop ups, telemarketing or false or unsubstantiated advertising.
- Monetary judgments: The orders require Nexway and its subsidiaries to pay $350,000; Asknet and its subsidiaries to pay $150,000; Iezuitov to pay $100,000; and Potenzone to pay $50,000.
The orders contain a total monetary judgment of $16.5 million, which is partially suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.
The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the proposed consent decree was 4-0. The vote on this matter closed on February 16, 2023, prior to former Commissioner Christine S. Wilson’s departure from the Commission. The DOJ filed the complaint and proposed consent decrees on behalf of the Commission in U.S. District Court for the District of Columbia.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when approved and signed by the District Court judge.
The FTC staff attorneys on this matter were Russell Deitch and J. Ronald Brooke, Jr. of the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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Consumer Alert
Ads for fake AI and other software spread malicious software
By
Alvaro Puig
Consumer Education Specialist
There’s a lot of hype around artificial intelligence (AI) these days. And cybercriminals are taking advantage of people’s interest in AI to spread harmful malware through online ads.
The criminals run bogus ads for AI tools and other software on social media sites and on search engines. These savvy cybercriminals can evade detection by systems designed to ferret out malicious advertising. They can also evade anti-virus software.
If you click on a malicious ad, you end up on a cloned site that downloads malware onto your device. But some ads take you to the real software and download the malware through a “backdoor,” which makes it hard to know you got hacked. Then, the criminals could steal your information and sell it to other hackers on the dark web, or get access to your online accounts and scam others.
So, how do you avoid clicking on malicious ads that install malware?
Don’t click on ads to download software. If you see an ad for software that piques your interest, don’t click on it. Instead, go to the website by typing in the address.
If you don’t know the website address, search for it. But remember that scammers also place ads on search engines. They’ll appear at the top of your search results page and might have a label that says “Ad” or “Sponsored”. Scroll past those to get to your search results.
Malicious ads might evade anti-virus software, but it’s still a good idea to make sure your computer’s security software, operating system, and Internet browser, and your phone, are up to date. And turn on automatic updates to keep up with the latest protections.
If you run into problems, follow these steps to remove malware or recover a hacked account.
Search Terms
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For Release
FTC, Florida Attorney General Sue Chargebacks911 for Thwarting Consumers Who Were Trying to Reverse Disputed Credit Card Charges
Complaint charges that “chargeback mitigation” company used misleading screenshots, bogus transactions on behalf of scammers
Tags:
- Consumer Protection
- Regional Offices
- Bureau of Consumer Protection
- Western Region San Francisco
- deceptive/misleading conduct
- Finance
- Credit and Finance
- Payments and Billing
The Federal Trade Commission and the State of Florida have filed suit against Chargebacks911 for unfairly thwarting consumers who were trying to dispute credit card charges through the chargeback process.
In a complaint filed in federal court, the FTC and Florida charged that, since at least 2016, the “chargeback mitigation” company and its owners, Gary Cardone and Monica Eaton Cardone, have used multiple unfair techniques to prevent consumers from successfully winning chargeback disputes.
“Chargebacks911 helped scammers stay in business and defeat chargeback attempts by consumers hit with fraudulent charges,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take aggressive action against those who undermine consumers’ ability to exercise their rights.”
The chargeback process is a key protection for consumers who wish to contest unwanted, fraudulent, or incorrect credit card charges When a consumer sees a charge they did not authorize, or for which the promised goods of services didn’t arrive, they can dispute the charge with their credit card company. The company then contacts the merchant’s credit card company for information and determines whether to reverse the charge.
According to the complaint, Chargebacks911 has regularly sent screenshots on behalf of their clients to credit card companies that supposedly show that consumers had agreed to the disputed charges—often recurring monthly subscription charges. The complaint notes that, in many instances, these screenshots have not actually been from the website where consumers made the disputed purchases and that the company ignored clear warning signs the website screenshots were misleading.
Image
A screenshot sent by Chargebacks911 and a screenshot of the site actually used by the consumer; both images from the complaint.
The complaint also charges that Chargebacks911 used a system called Value Added Promotions (VAP), which allowed the company’s clients to run numerous small-dollar transactions via prepaid debit cards. By doing so, clients could raise their total number of transactions, lowering the percentage of their charges that were disputed by consumers. The percentage of chargebacks a company faces plays a role in the level of scrutiny a company receives from credit card companies; a higher percentage will likely lead to more scrutiny.
In the complaint, the FTC and Florida note that Chargebacks911 served numerous companies that the FTC has sued for deceiving consumers, including Apex Capital, F9 Advertising, and AH Media. The complaint notes that Chargebacks911 disputed tens of thousands of chargebacks on behalf of each of those companies.
There were many instances, according to the complaint, where Chargebacks911 submitted screenshots of websites on behalf of Apex Capital and AH Media where the name of the product on the sites in the screenshots did not even match the brand name of the product for the disputed purchase. According to the complaint, Chargebacks911 regularly overlooked other suspicious behaviors from their clients, including when clients used a large number of different merchant accounts to process charges.
The FTC and Florida allege that Chargebacks911, Gary Cardone, and Monica Eaton Cardone are violating both the FTC Act and the Florida Unfair and Deceptive Trade Practices Act, and are asking the court to stop the defendants’ illegal activities and order monetary relief, including compensation for consumers and civil penalties.
The Commission vote authorizing the staff to file the complaint was 3-0-1, with then-Commissioner Christine S. Wilson recorded as not voting. The vote on this matter closed on March 29, 2023, prior to Commissioner Wilson’s departure from the Commission. The complaint was filed in the U.S. District Court for the Middle District of Florida.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
The FTC staff attorneys on this matter are Evan Rose and Bobbi Tonelli of the FTC’s Western Region San Francisco.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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For Release
FTC Ramps Up Fight to Close the Door on Illegal Robocalls Originating from Overseas Scammers and Imposters
Project Point of No Entry delivers strong message to “gateway” voice service providers to stop bad traffic from entering the United States or face the consequences
Tags:
As the menace of unwanted illegal robocalls continues, U.S. consumers are bombarded by millions of these calls each month, both to their landlines and cell phones. Data show that a significant proportion, if not the majority, of illegal robocalls originate from overseas.
To stop these illegal overseas calls, the Federal Trade Commission has implemented Project Point of No Entry (PoNE), targeting “point of entry” or “gateway” Voice over Internet Protocol (VoIP) service providers and warning they must work to keep illegal robocalls out of the country.
“Project Point of No Entry is yet another way the FTC is sending VoIP service providers the clear message that the Commission will not stand by as illegal robocalls blast American phones,” said Samuel Levine, Director of the Bureau of Consumer Protection. “We will use all of our tools to stop companies that knowingly permit illegal calls to flood into the country.”
Project Point of No Entry
Through Project PoNE, the FTC is disrupting foreign-based scammers and imposters responsible for blasting U.S. consumers with annoying and unwanted calls. Through Project PoNE, the Commission: 1) identifies point of entry VoIP service providers that are routing or transmitting illegal call traffic, 2) demands they stop doing so and warns their conduct may violate the Telemarketing Sales Rule, and then 3) monitors them to pursue recalcitrant providers, including by opening law enforcement investigations and filing lawsuits when appropriate.
The FTC can seek civil penalties and court injunctions to stop TSR violations. It can also seek money to refund to consumers who were defrauded via illegal telemarketing calls. The FTC coordinates directly with the agency’s federal and state partners, which support the program and pursue their own actions to fight illegal telemarketing robocalls.
Quantifiable Results
Results to date have shown that Project PoNE is having a significant impact in the fight to stop illegal calls.
Through the FTC’s enforcement efforts and its collaboration with partners, such as the Industry Traceback Group (ITG), the Federal Communications Commission (FCC), and state attorneys general, Project PoNE has uncovered the activity of 24 target point of entry service providers responsible for routing and transmitting illegal robocalls between 2021 and 2023, in connection with approximately 307 telemarketing campaigns, including government and business imposters, COVID-19 relief payment scams, and student loan debt relief and forgiveness schemes, among others. According to ITG, a single campaign often represents hundreds of thousands or millions of calls.
The FTC demanded that each of the target providers stop allowing illegal robocalls into the United States, warning of potential law enforcement action for illegal conduct. ITG traceback data show that after being contacted by Project PoNE staff, 22 of the 24 targets significantly curbed or altogether stopped the flow of illegal robocalls entering the country over their networks.
Designated by the FCC as the official traceback consortium, ITG uses its traceback process to seek out the source of suspicious traffic and shares information with law enforcement when appropriate. Each traceback represents a snapshot of any given campaign.
Before being contacted by the FTC, the targets had a combined total of 1,043 tracebacks. After being contacted and warned about their possibly illegal conduct, that number dropped to 196, illustrating Project PoNE’s effectiveness at stopping illegal robocalls before they could enter the country. Of the 196, 147 are linked to two uncooperative providers, one of which is subject to an FCC law enforcement action.
The FTC is making available to the public recordings of the robocalls that the targets have allowed into the country at Project Point of No Entry Letters . Making these recordings available will help consumers identify and avoid the various scams delivered by illegal robocalls. The FTC’s East Central Region is spearheading Project PoNE.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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Consumer Alert
Are you really the lucky winner? Spot the prize scams
By
Gema de las Heras
Consumer Education Specialist
Image
Say you hear or read the words: “You’ve won!” What will you do with your winnings? Who wouldn’t be excited to win a prize, sweepstakes, or lottery? But…did you actually win? And how do you know?
Sweepstakes, prize, and lottery frauds are among the top scams people report to the FTC. These scams usually start with a call or message that says you’re a winner. (A lie.) They say to get the so-called prize you have to send money or click somewhere to give your information. Don’t. The most recent FTC data shows people reported losing $301 million to this type of fraud. That’s an average loss of $907 per person.
But there are also legitimate contests and prizes that follow the law and give real prizes. So how do you know the difference?
One question to consider is: did you enter the sweepstakes or play the lottery? If not, you absolutely didn’t win. And here are other ways to spot and avoid prize scams:
- Don’t pay to get a prize. Real prizes are free. Anyone who asks you to pay a fee for “taxes,” “shipping and handling charges,” or “processing fees” to get your prize, is a scammer. Stop and walk away.
- Don’t give your financial information. There is absolutely no reason to ever give your bank account or credit card number to claim a prize. If anyone asks for it, it’s a scam.
- Don’t give your personal information. Scammers hope you’ll click on links that will take your personal information or download malware on your device. Delete the message without clicking on the links and don’t respond.
Check out #FTCTopFrauds and ftc.gov/data to learn more. Already paid a scammer? Learn how to get your money back and tell the FTC at ReportFraud.ftc.gov.
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