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FTC Alleges Amazon Unlawfully Billed Parents for Millions of Dollars in Children’s Unauthorized In-App Charges

July 10, 2014 Comments off

FTC Alleges Amazon Unlawfully Billed Parents for Millions of Dollars in Children’s Unauthorized In-App Charges
Source: Federal Trade Commission

Amazon.com, Inc. has billed parents and other account holders for millions of dollars in unauthorized in-app charges incurred by children, according to a Federal Trade Commission complaint filed today in federal court.

The FTC’s lawsuit seeks a court order requiring refunds to consumers for the unauthorized charges and permanently banning the company from billing parents and other account holders for in-app charges without their consent. According to the complaint, Amazon keeps 30 percent of all in-app charges.

Amazon offers many children’s apps in its appstore for download to mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.

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FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills

July 1, 2014 Comments off

FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills
Source: Federal Trade Commission

In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers.

The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC’s complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.

In a process known as “third-party billing,” a phone company places charges on a consumer’s bill for services offered by another company, often receiving a substantial percentage of the amount charged. When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.”

The FTC’s complaint alleges that in some cases, T-Mobile was charging consumers for services that had refund rates of up to 40 percent in a single month. The FTC has alleged that because such a large number of people were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorized by its customers. As the complaint notes, the refund rate likely significantly understates the percentage of consumers who were crammed. The complaint also states that internal company documents show that T-Mobile had received a high number of consumer complaints at least as early as 2012.

FTC Recommends Congress Require the Data Broker Industry to be More Transparent and Give Consumers Greater Control Over Their Personal Information

May 28, 2014 Comments off

FTC Recommends Congress Require the Data Broker Industry to be More Transparent and Give Consumers Greater Control Over Their Personal Information
Source: Federal Trade Commission

In a report issued today on the data broker industry, the Federal Trade Commission finds that data brokers operate with a fundamental lack of transparency. The Commission recommends that Congress consider enacting legislation to make data broker practices more visible to consumers and to give consumers greater control over the immense amounts of personal information about them collected and shared by data brokers.

The report, “Data Brokers: A Call for Transparency and Accountability” is the result of a study of nine data brokers, representing a cross-section of the industry, undertaken by the FTC to shed light on the data broker industry. Data brokers obtain and share vast amounts of consumer information, typically behind the scenes, without consumer knowledge. Data brokers sell this information for marketing campaigns and fraud prevention, among other purposes. Although consumers benefit from data broker practices which, for example, help enable consumers to find and enjoy the products and services they prefer, data broker practices also raise privacy concerns.

See also: A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes (U.S. Senate Committee on Commerce, Science and Transportation)

Snapchat Settles FTC Charges That Promises of Disappearing Messages Were False

May 8, 2014 Comments off

Snapchat Settles FTC Charges That Promises of Disappearing Messages Were False
Source: Federal Trade Commission

Snapchat, the developer of a popular mobile messaging app, has agreed to settle Federal Trade Commission charges that it deceived consumers with promises about the disappearing nature of messages sent through the service. The FTC case also alleged that the company deceived consumers over the amount of personal data it collected and the security measures taken to protect that data from misuse and unauthorized disclosure. In fact, the case alleges, Snapchat’s failure to secure its Find Friends feature resulted in a security breach that enabled attackers to compile a database of 4.6 million Snapchat usernames and phone numbers.

According to the FTC’s complaint, Snapchat made multiple misrepresentations to consumers about its product that stood in stark contrast to how the app actually worked.

FTC Announces Top National Consumer Complaints for 2013

March 14, 2014 Comments off

FTC Announces Top National Consumer Complaints for 2013
Source: Federal Trade Commission

Identity theft continues to top the Federal Trade Commission’s national ranking of consumer complaints, and American consumers reported losing over $1.6 billion to fraud overall in 2013, according to the FTC’s annual report on consumer complaints released today.

The Commission received more than two million complaints overall, as reported in the agency’s Consumer Sentinel Network Data Book 2013, of which 290,056, or 14 percent, were identity theft related. Thirty percent of these incidents were tax- or wage-related, which continues to be the largest category within identity theft complaints.

The highest reported age group for identity theft is 20-29, with 20 percent of complaints. Rich says that educating consumers on this topic is a top priority for the agency. Some of the FTC resources include Signs of Identity Theft, Immediate Steps to Repair Identity Theft, and How to Keep Your Personal Information Secure.

Of the more than 1.1 million fraud complaints (classified separately from identity theft) the Commission received, 61 percent of consumers reported an amount of money they had paid, which collectively added up to more than $1.6 billion.

As Holiday Shopping Season Gets Underway, FTC Reminds Internet Retailers to Ensure Consumers Have Access to Warranty Information

December 11, 2013 Comments off

As Holiday Shopping Season Gets Underway, FTC Reminds Internet Retailers to Ensure Consumers Have Access to Warranty Information
Source: Federal Trade Commission

Federal Trade Commission staff is asking top Internet retailers to review their websites to ensure that they provide complete and accurate information about product warranties before consumers make their online purchases, as required by the FTC’s Pre-Sale Availability Rule.

The Rule requires retailers to make warranties available at the time of purchase for all warranted consumer products that cost more than $15. However, a recent staff survey found several instances of Internet sellers offering warranted consumer electronics and appliances for sale without disclosing complete warranty information.

FTC Issues FY 2013 National Do Not Call Registry Data Book

December 11, 2013 Comments off

FTC Issues FY 2013 National Do Not Call Registry Data Book
Source: Federal Trade Commission

The Federal Trade Commission today issued the National Do Not Call Registry Data Book for Fiscal Year 2013. The FTC’s National Do Not Call Registry lets consumers choose not to receive telemarketing calls. In its fifth year of publication, the Data Book contains a wealth of information about the Registry for FY 2013 (from October 1, 2012 to September 30, 2013), including:

  • The number of active registrations and consumer complaints since the Registry began in 2003;
  • FY 2013 complaint figures by month and type;
  • FY 2013 registration and complaint figures for all 50 states and the District of Columbia by population;
  • Rankings of the number of Do Not Call registrations by state population;
  • The number of entities accessing the Registry by fiscal year; and
  • An appendix on registration and complaint figures by state and area code.

According to the Data Book, at the end of FY 2013, the Do Not Call Registry contained 223,429,112 actively registered phone numbers, up from 217,568,284 at the end of FY 2012. In addition, the number of consumer complaints about unwanted telemarketing calls received decreased from 3,840,569 during FY 2012 to 3,748,655 during FY 2013.

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