Zango, Inc. Settles FTC Charges

Will Give Up $3 Million in Ill-Gotten Gains for Unfair and Deceptive Adware Downloads

Zango, Inc., formerly known as 180solutions, Inc., one of the world’s largest distributors of adware, and two principals have agreed to settle Federal Trade Commission charges that they used unfair and deceptive methods to download adware and obstruct consumers from removing it, in violation of federal law. The settlement bars future downloads of Zango’s adware without consumers’ consent, requires Zango to provide a way for consumers to remove the adware, and requires them to give up $3 million in ill-gotten gains.

"Consumers' computers belong to them, and they shouldn't have to accept any content they don’t want," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. "If consumers choose to receive pop-up ads, so be it. But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use." Read more

FTC Stops Illegal Mortgage Services Phone Calls

Two companies and their principals have agreed to settle Federal Trade Commission charges that they violated the FTC’s Telemarketing Sales Rule (TSR) by calling telephone numbers listed on the National Do Not Call Registry and failing to pay the required fee for access to numbers listed on the Registry.

At the FTC’s request, the U. S. Department of Justice filed a complaint in federal court, alleging that on or after October 17, 2003, USA Home Loans Inc., a mortgage services company, and telemarketer USA First Investment Group Inc., violated the TSR while marketing mortgage products and services, including originating and refinancing home loans. According to the FTC’s complaint, USA Home Loans made calls to consumers, and, on its behalf, USA First Investment Group made calls to pre-qualify consumers for USA Home Loans offerings. Read more

Telephone Record Seller Settles FTC Charges

Settlement Bars Defendants From Pretexting and Selling Consumers’ Phone Records; Defendants Will Give Up Ill-Gotten Gains

An Internet business that advertised and sold consumers’ phone records and records of credit card accounts to third parties has agreed to settle Federal Trade Commission charges that it violated federal law. The settlement bars the defendants from obtaining or selling consumers’ confidential phone and credit account records unless authorized by law or court order’ and requires that they give up the money they made selling phone records in the past. Read more

FTC Puts a Permanent Halt to Illegal Spamming Operations

The Federal Trade Commission has brought a permanent halt to four illegal spamming operations – including one that offered the opportunity to “date lonely wives” and two that hijacked the computers of unwitting third parties and used them to pelt consumers with graphic sexually explicit e-mail. The FTC charged the operators with sending spam that violated provisions of the CAN-SPAM Act, and has halted the illegal spamming.

The CAN-SPAM Act requires that a spam e-mail contain accurate header and subject lines, identify itself as an ad, and include the sender’s postal address. It also requires that the spam give recipients an opt-out method, so consumers can elect not to receive messages from the spammer in the future. To ensure that consumers are not exposed content they do not wish to view, the Adult Labeling Rule requires that senders use the phrase “SEXUALLY EXPLICIT: ”in the subject line of sexually explicit e-mail messages and ensure that the initially viewable area of the message does not contain graphic sexual images. The consent agreements announced today settle charges that the spammers violated the CAN-SPAM Act, the Adult Labeling Rule, or both. Read more

Magazine Seller Will Pay More Than $7 Million

Banned from Telemarketing for Five Years

A federal judge has ordered a magazine subscription seller to pay a civil penalty of more than $5.4 million and give up more than $1.6 million of his ill-gotten gains for violating a 1996 Federal Trade Commission consent order and the FTC’s Telemarketing Sales Rule (TSR). This is the largest civil penalty the Federal Trade Commission has ever obtained for a violation of a consent order in a consumer protection matter.

“The FTC expects full compliance with its orders, period,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “This case demonstrates that the Commission will prosecute those who flout its orders and deceive consumers.” Read more

Xanga.com to Pay $1 Million for Violating Childrens Online Privacy Protection Rule

Civil Penalty Against Social Networking Site Is Largest Ever for a COPPA Violation

Social networking Web site operators Xanga.com, Inc. and its principals, Marc Ginsburg and John Hiler, will pay a $1 million civil penalty for allegedly violating the Children’s Online Privacy Protection Act (COPPA) and its implementing Rule, under the terms of a settlement with the Federal Trade Commission announced today.

According to the FTC, Xanga.com collected, used, and disclosed personal information from children under the age of 13 without first notifying parents and obtaining their consent. The penalty is the largest ever assessed by the FTC for a COPPA violation, and is more than twice the next largest penalty. Read more

FTC Closes Door on Spyware Operation

An operation that placed spyware on consumers’ computers in violation of federal laws will give up more than $2 million to settle Federal Trade Commission charges.

Under a stipulated final judgment and order, the defendants are permanently prohibited from interfering with a consumer’s computer use, including but not limited to distributing software code that tracks consumers’ Internet activity or collects other personal information, changes their preferred homepage or other browser settings, inserts new advertising toolbars or other frames onto their browsers, installs dialer programs, inserts advertising hyperlinks into third-party Web pages, or installs other advertising software code, file, or content on consumers’ computers. Read more

FTC Advises Consumers Not to Use Wire Transfers for Online Purchases

The Federal Trade Commission is warning consumers that paying for an online purchase with a wire transfer is risky. When making purchases from Internet auctions, the FTC says credit cards and online payment services are safer. The FTC’s new alert, “Going, Going, Gone: Using Wire Transfers for Internet Auction Purchases Can Be Risky” provides information about making purchases safely.

While wire transfers can be useful for sending funds to someone a consumer knows and trusts, they are not a good method of transferring money to strangers. When a consumer wires money to buy an item from a Internet auction site, either through a money transmitter or directly to someone’s bank account, and something goes wrong, the consumer is likely to lose their payment and have no recourse. While credit cards and online payment services are the safest, other payment options include debit cards, personal checks, cashier’s checks, money orders, or escrow services. Read more

Telemarketer Pays the Price for Using Unscrubbed Lead Lists

A Southern California-based mortgage broker will pay $50,000 under a court order filed today on behalf of the Federal Trade Commission for allegedly calling tens of thousands of consumers who are on the National Do Not Call (DNC) Registry for telemarketers and for failing to pay the annual fee required to access the DNC Registry. In addition, the company and its officers are permanently barred from violating the DNC provisions of the Telemarketing Sales Rule (TSR) and from making illegal telemarketing calls in the future. Read more

Discount Health Card Seller and Its Telemarketer to Pay Combined 350k Penalty for Do Not Call Violations

A seller of discount health and prescription drug cards and its telemarketer will pay civil penalties of $300,000 and $50,000, respectively, to settle Federal Trade Commission charges that they have been violating the Do Not Call (DNC) provisions of the Commission’s Telemarketing Sales Rule (TSR), and will be prohibited from similar conduct in the future, the agency announced today. At the Commission’s request, the U.S. Department of Justice (DOJ) filed the complaint and proposed stipulated consent orders in Federal District Court in New York City. This is the Commission’s first case to highlight the application of DNC provisions to corporate affiliates. Read more

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