Lead Generators Busted by the Government
Within the last several months the Federal Trade Commission (“FTC”) has stepped up enforcement against lead generators and related marketers and advertisers. The consequences of these enforcement actions to the persons and companies that were targeted is undeniable. Here are a handful of real examples and some notable details direct from the FTC:
Robocalling Marketers Shut Down
JPM Accelerated Services and related defendants made thousands of illegal pre-recorded robocalls to consumers offering false promises to reduce their credit card interest rates. The telemarketers charged an upfront fee from $495 to $995, but failed to follow up on the promised lowering of interest rates. (FTC.gov)
Deceptive Advertiser Banned from the Debt-Relief Business
As part of the FTC’s operations to hammer scams taking advantage of consumers in financial distress, a deceptive advertising operation has been banned from the debt-relief business. The company, which did business under the names 800 Credit Card Debt and Debt.com, falsely claimed they could save consumers thousands of dollars by reducing their credit card debt. The defendants are Debt.com Marketing, LLC; Media Choice, LLC; 800 Credit Card Debt, LLC; and Stephen Todd Cook. (FTC.gov)
Ruling Against Herbal-Products Company Upheld
The FTC upheld charges against Daniel Chapter One, an herbal-products company that made deceptive claims that its shark cartilage and other herbal formulations prevent, treat and cure cancer, and lessen the effects of chemotherapy and radiation. Four dietary supplements at the focus of this case were prohibited from being advertised as beneficial in these ways. Daniel Chapter One and James Feijo were required to send letters of notification to purchasers. (FTC.gov)
Payday-Loan-Lead Generators Settle with the FTC
Two payday-loan-lead generators – We Give Loans Inc., and Aliyah Associates, LLC, d/b/a American Advance – agreed to settle FTC charges that their online ads stated payday loan costs and repayment periods without revealing annual percentage rate (APR) information, which is required by federal law. (FTC.gov)
Deceptive Online Marketing of ‘Free’ Internet Auction Kits is Barred
Commerce Planet, an online marketer that boasted “free” Internet auction kits and automatically charged unsuspecting consumers $59.95 a month for enrollment in an “online supplier” program for Internet auctions, agreed to settle FTC charges for what could amount to more than $1 million. (FTC.gov)
The bottom line is that the FTC is targeting lead generators. Companies advertising and marketing – even on behalf of third parties – will need to know the rules to avoid the risk of an enforcement action.
