Tag: FTC

Image source: FDA Health Fraud For Consumers http://1.usa.gov/1Rebco7

Women targeted in consumer fraud

March is Women’s History Month. When we focus on the consumer marketplace, we often find that women make a considerable amount, if not the majority of decisions regarding purchases and finances for themselves and families. Women make up more than 50 percent of our U.S. population[i] and the individuals engaged in deceptive business practices and consumer fraud use scams targeting women. In several reported cases, unscrupulous individuals and companies appealed to women’s emotions in trying to sell those products, hoping their guard would be down. Women should be particularly aware of consumer fraud and should learn to spot it when salespeople make claims that seem to good to be true. When the consumer fraud operation violates consumer rights laws, individual women and members of class action lawsuits can sue and win in court, helping shut down scammers who prey on women.

The Federal Trade Commission (FTC) recently published an article highlighting their noteworthy efforts in stopping scammers targeting women.

The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. There FTC is engaged in the administration and enforcement of more than 70 laws relating to competition and consumer protection.[ii] With so many actors in the consumer marketplace, it is no wonder many deceptive business operators get creative with their scams. The following examples highlight frauds and scams aimed at women.

Revenge porn

Section 5 of the FTC prohibits “unfair or deceptive acts or practices in or affecting commerce,[iii]” and unfair acts or practices are those which cause or are likely to cause substantial injury to consumers, cannot be reasonably avoided by consumers, and are not outweighed by their purported benefits to consumers or competition. Deceptive acts or practices include a representation, omission or practice likely to mislead a customer, and a consumer who interprets that material misrepresentation and reasonably relies upon it is as true or reasonable under the circumstances.

The FTC used Section 5 to shut down the revenge porn website operated by Craig Brittain, who solicited sexually explicit pictures of women for his website. In many cases, Brittain paid some individuals to find pornographic images of women along with their names, addresses and Facebook pages.[iv] Women who found out private pictures of themselves on Brittain’s revenge porn website, could pay hundreds of dollars to have their profiles stricken from the site. Following the FTC takedown and order to destroy all the images, many individuals concerned about this type of scam, are working on additional legislation specifically addressing this type of consumer fraud involving elicit images.

Bogus health and weight loss

Women are constant targets of health and weight loss products. The claims that new discoveries in science and health may be used to sell hope for a quick fix for all that ails an individual. Lunada Biomedical advertised their “revolutionary formula” in the drug, Amberen, promising to relieve menopause symptoms, including weight gain and hot flashes.[v] The FTC claims there is no evidence supporting the claims made by Lunada Biomedical, who is currently under investigation and the case is ongoing.

Meanwhile, most women know that spilling coffee on their skin does not cause weight loss, but there were two companies called Norm Thompson and Wacoal America who advertised caffeine-infused underwear/shapewear designed to reduce weight by taking inches off hips and thighs, and reducing cellulite.[vi] Women watching these advertisements may be aware about laws against false advertising, and assume the products perform as they are advertised. Unfortunately, unscrupulous business operators do not follow the law. Of course the claims made by these companies were unsubstantiated and claims that undergarments could include caffeine and other substances to be absorbed by the skin to reduce weight and cellulite were absolutely unfounded, with no adequate support for the claims made. By administrative agreement, both companies are barred from making weight loss claims and they are refunding women customers duped by bogus claims.

Income scams

The FTC obtained a temporary court order shutting down Oro Marketing, a company who made phone calls to Spanish-speaking Latinos, advertising high-end goods they were selling in packages to customers who could re-sell the items for a profit.[vii] Oro Marketing sold packages of goods for $400 to $500, and when these packages of high-end goods were received, the purchasers quickly learned the contents were of little or no value, were not the quality promised, and had little to no value in a re-sale market. The FTC settled its case with Oro Marketing in which a permanent ban prevents Oro Marketing or it’s principal from doing business in the telemarketing industry. The FTC used this case to produce a Spanish-language graphic novel, Estafa de Ingresos, to highlight the risk of income scams.

Women consumers and compensation for fighting against consumer fraud

Individual consumers who spot consumer fraud and unfair or deceptive practices, and work with consumer rights lawyers to file complaints, can and do receive statutory damages, direct damages and they payment of their attorney’s fees, depending on the consumer laws violated. The responsible course of action is reporting consumer fraud when you think you encounter it, to help prevent others from being taken and swindled by frauds who prey on women.

The Zamparo Law Group helps women fight back against the individuals and organizations who target women in consumer fraud. We fight and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] United States Census Bureau, Quick Facts, Age and Sex.

[ii] U.S. Federal Trade Commission, Enforcement, Statutes Enforced or Administered by the Commission.

[iii] Federal Reserve website, Federal Trade Commission Act, Section 5: Unfair or Deceptive Acts or Practices.

[iv] FTC Consumer Information, Is anybody horrified?, by Melinda Claybaugh, Jan 29, 2015.

[v] FTC Consumer Information, Attention Women Over 40: Claims may slim your wallet, not your waist, by Coleen Tressler, May 12, 2015.

[vi] FTC Consumer Information, No support for shapewear’s slimming claims, by Coleen Tressler, Sept. 29, 2014

[vii] FTC Consumer Information, Shutting down an income scam, by Laura Solis, Jan 13, 2015.

Advertising Material