The Results Group, L.L.C., and its co-owners are banned from telemarketing, and will give up thousands of dollars in cash, the proceeds from the sale of luxury sports cars, and the value of life insurance policies and a Las Vegas real estate deal, to settle Federal Trade Commission charges that they deceptively sold home-based Internet business opportunities to consumers throughout the United States. The Phoenix-based boiler room operation will return about $435,000 to consumers. The FTC and Arizona Attorney General’s office cooperated extensively on this investigation; the Attorney General also is bringing a parallel case against the same schemers.
In its complaint, the FTC charged that the defendants misrepresented that consumers who purchased their business system were likely to earn a substantial income with little risk, and that they would receive substantial assistance from a staff of business experts. They claimed that some of their purchasers were making over $50,000 per month in commissions. In fact, most consumers never earned any income.
The operation charged between $99 and $599 to build and host Web sites “affiliated” with the Web sites of Fortune 500 retail companies such as Amazon.com and Overstock.com. Supposedly, consumers would make money when those retailers paid commissions for sales made through the consumers’ Web sites. The defendants claimed that tens of thousands of Web users would be driven by advertisements to click on the Web sites.
After consumers purchased the business system, company employees, calling themselves “business coaches,” would call and pressure consumers to spend more money on advertising. They claimed the advertising was necessary to make the business successful; for many consumers, this was the first time they realized the business was not a “turn-key” operation as promised, and that many of the promises made to them were false or misleading.
The settlement with The Results Group, L.L.C., Edward R. Longoria, and Amber R. Halverson bans all three defendants from telemarketing. The order contains a $19,500,500 judgment against them, which will be suspended, based on their sworn financial documents and payment of $435,000 in consumer redress. If it is found that the defendants misrepresented their financial status, or fail to make the payments they agreed to in the order, then the full amount will be due.
In addition, the settlement prohibits the defendants from misrepresenting: that purchasers are likely to earn substantial income with any business venture; that they will receive substantial assistance in the operation of their business venture; the total cost to purchase, receive, or use and the quantity of any goods or services that are for sale; any restrictions, limitations, or conditions to purchase, receive, or use goods or services; the terms of a refund, cancellation, exchange, or repurchase policy; or the income, profits, or sales volume likely to be achieved.
The Commission vote to authorize staff to file the Stipulation for Entry of Final Judgment and Order of Permanent Injunction was 5-0. The Stipulation and the Proposed Final Order were filed in the U.S. District Court for the District of Arizona.
NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
$160,000 From Web Services Businesses A company and its owner will return $160,000 to consumers and are banned for life from promoting or selling franchises or business opportunities. The Federal Trade Commission charged that they used bogus earnings claims to lure franchisees into buying their Web services businesses, and failed to tell customers that the owner was under a previous FTC order for deceptively promoting rare coins.
Identity Theft The testimony notes that “since 2001, the Commission has brought fourteen cases challenging businesses that failed to reasonably protect sensitive consumer information that they maintained. . . . Together, the cases stand for the proposition that companies should maintain reasonable and appropriate measures to protect sensitive consumer information.”
Anti-spyware Operators Settle With FTC The FTC charged that the defendants’ free remote scan was phony, and the defendants’ representations that they had detected spyware on the consumer’s computer were deceptive. In addition, the defendants claimed that the software they sold for $29.95 would remove all spyware programs and files. The FTC’s complaint alleged that the “anti-spyware” software did not remove all or substantially all spyware, and the defendants’ deceptive claims violate the FTC Act, which bars deceptive claims.
Spyware and Adware The Federal Trade Commission has asked a U.S. District Court judge to halt an operation that secretly installed spyware and adware that could not be uninstalled by the consumers whose computers it infected. The defendants used the lure of free software they claimed would make peer-to-peer file sharing anonymous. The agency alleges the stealthy downloads violate federal law and asked the court to order a permanent halt to them.
Sponsored links are a money maker for search engines, but a Penn State study using a search engine's transaction log indicates consumers click on sponsored listings fewer than two times out of every 10 searches, a rate which suggests consumers still prefer organic or non-sponsored links.
The analysis is one of the first-ever academic studies of sponsored-link click through using actual search engine data, said Jim Jansen, an assistant professor in the College of Information Sciences and Technology (IST) and lead author.
RealNetworks, Inc. (NASDAQ: RNWK), MTV Networks, and Verizon Wireless are teaming to create a single, integrated digital music experience that consumers can access via their PC, portable music device or mobile phone. Promising to be ultra-rich in music culture, programming and discovery. Verizon Wireless' V CAST Music will become the mobile platform for the integrated Rhapsody service.
Five men have been indicted on charges of participating in an identity theft ring targeting wealthy Americans. The defendants – four of whom were arrested today and are in custody in Michigan, Texas, Florida and Kentucky -- have been charged with stealing $1.5 million and attempting to steal another $10.7 million from their victims’ financial accounts. Another defendant was arrested in May and is in custody in New York.
Is your first craving in the morning for your computer mouse? Do you obsessively check email in the middle of the night?
If so, you may be among the ten percent of all Internet surfers afflicted with “Internet addiction disorder,” a pathological condition that can lead to anxiety and severe depression. To better diagnose and treat Internet addiction, Dr. Pinhas Dannon, a psychiatrist from Tel Aviv University’s Sackler Faculty of Medicine, recommends that it be grouped with other extreme addictive disorders such as gambling, sex addiction, and kleptomania.
The National Cyber Security Alliance (NCSA) has called upon state leaders across the United States to work with their states' education leaders to ensure cyber security, safety and ethics lessons are integrated in every classroom.
The “No Child Left Behind Act” requires students to be technology literate upon completion of the 8 th grade. Accordingly, the National School Boards Association reports that 96 percent of school districts say that at least some of their teachers assign homework requiring Internet use. However, there is still no formal education on how to stay safe, secure and ethical online.