June 2022

The Federal Trade Commission has finalized an administrative consent order against two Texas-based companies and their owner who are permanently banned from advertising or selling dietary supplements, and from making claims that their products treat, cure, or reduce the risk of disease. Today’s action stems from an administrative complaint the FTC filed in November 2020 against Health Research Laboratories, LLC, Whole Body Supplements, LLC, and their owner and officer Kramer Duhon.

The complaint alleged the Health Research Laboratories respondents made unsubstantiated claims that their supplements — The Ultimate Heart Formula (UHF), BG18, and Black Garlic Botanicals — prevent or treat cardiovascular and other diseases, and that their supplement Neupathic cures, mitigates, or treats diabetic neuropathy.

The Commission vote approving final consent order was 5-0. The FTC responded to one public commenter.

The Federal Trade Commission is sending 176,028 checks, totaling more than $5.4 million, to consumers who were charged for “free trial” offers for cosmetics and weight loss supplements, including products called Amabella Allure, Adelina, Parisian Glow, and Tone Fire Garcinia.

Consumers who receive checks should cash them within 90 days, as indicated on the check. Recipients who have questions about their refund, or who didn’t receive a check and believe they may be eligible, should call the refund administrator, Rust Consulting, at 1-833-711-0291. The Commission never requires people to pay money or provide account information to get a refund.

The FTC sued AH Media Group in September 2019, alleging that since at least April 2016, the company marketed supposedly “free trial” products with claims that the products promote younger-looking skin or weight loss. While the company claimed consumers would pay only a small shipping and handling fee for the trial, they buried the true cost behind “terms” links in small font and faded background text. After two weeks, the defendants charged unsuspecting consumers around $90 for the trial product and also enrolled them in unwanted subscription plans with additional monthly charges.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of Commission refunds. In 2020, Commission actions led to more than $483 million in refunds to consumers across the country, but the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.

The Federal Trade Commission today sued Walmart for allowing its money transfer services to be used by fraudsters, who fleeced consumers out of hundreds of millions of dollars. In its lawsuit, the FTC alleges that for years, the company turned a blind eye while scammers took advantage of its failure to properly secure the money transfer services offered at Walmart stores. The company did not properly train its employees, failed to warn customers, and used procedures that allowed fraudsters to cash out at its stores, according to the FTC’s complaint. The FTC is asking the court to order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations.

“While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Consumers have lost hundreds of millions, and the Commission is holding Walmart accountable for letting fraudsters fleece its customers.”  

In addition to its retail business, Walmart offers financial services to consumers in its stores, including money transfers, credit cards, reloadable debit cards, check cashing, bill payments and more. Walmart acts as an agent for multiple money transfer services, including MoneyGram, Ria and Western Union, offering some services under its own brand, like “Walmart2Walmart” and “Walmart2World.” According to the complaint, tens of millions of money transfers are sent or received at Walmart stores each year, where they are processed by Walmart employees.

Money transfers are services that people use to send money to a recipient in another location. They are frequently used by fraudsters across a wide variety of scams because they are nearly impossible to retrieve after the money has been picked up. The FTC has brought multiple cases against money transfer services in recent years, including against MoneyGram and Western Union, alleging they failed to protect consumers who used their services.

Walmart’s practice of turning a blind eye to fraud had grave consequences for consumers, according to the complaint. The complaint cites numerous instances in which law enforcement investigations found that scammers relied on Walmart money transfers as a primary way to receive payments, including in telemarketing schemes like IRS impersonation schemes, relative-in-need “grandparent” scams, sweepstakes scams, and others. Based on information from fraud databases maintained by MoneyGram, Western Union, and Ria, from 2013 to 2018 more than $197 million in payments that were the subject of fraud complaints were sent or received at Walmart, with more than $1.3 billion in related payments also possibly connected to the fraud.

The FTC’s investigation of Walmart’s money transfer practices showed, according to the complaint, that Walmart knew about the role money transfer services play in scams and frauds. Despite that, the company’s money transfer services harmed consumers in numerous ways, including:

• Allowing the payout of suspicious transfers: For years, according to the complaint, it was Walmart’s stated policy for its employees to issue payouts even in the case of a suspicious money transfer, making it easy for scammers to retrieve fraud proceeds at a Walmart location. The complaint cites a Walmart reference guide for employees that stated: “If you suspect fraud, complete the transaction.”  Walmart did not begin training employees to deny fraudulent payouts until at least May 2017, but even then it provided this training only to employees at a limited number of locations.

• Having no anti-fraud policy or an ineffective, poorly enforced policy: According to the complaint, despite offering money transfer services for many years, Walmart did not have a written anti-fraud or consumer protection program until November 2014. After that time, the complaint cites numerous instances in which Walmart failed to have an effective program or violated its own policies, as well as the policies of its partners, like MoneyGram, that were ostensibly in place to protect consumers from fraud.

• Allowing cash pickups for large payments: The complaint notes that Walmart, unlike most other outlets where money transfers can be received, pays even large payments in cash. In addition, the complaint notes that scammers were often able to retrieve their payments from Walmart by using fake IDs. This made it an attractive option for fraudsters looking to conceal their identities.

• Not providing materials to prevent consumers from sending fraudulent payments: According to the complaint, Walmart failed to display or provide required materials to consumers at many of its locations that could have warned them about potential frauds and stopped them from sending money to scammers. More recently, the company stopped using a paper “send form” that included important information for consumers to help them realize they may be making a bogus payment, replacing it with a printout that contains only small print warnings.

• Failing to effectively train or retrain staff: The complaint alleges that Walmart’s training materials for the tens of thousands of employees who worked with money transfers was often contradictory or unclear. In many cases, employees who were authorized to handle money transfers as “backups” received no anti-fraud training at all or only limited training related to transfers. The complaint notes that in some instances Walmart staff were complacent or complicit in scams, accepting cash tips from scammers in exchange for processing fraudulent payments or being directly involved in the scams themselves.

• Allowing money transfers to be used for telemarketing purchases: The FTC’s Telemarketing Sales Rule has since 2016 prohibited money transfers from being used to pay for telemarketing purchases because of the high risk of fraud. But the complaint alleges that, for years, Walmart failed to take steps to comply with that provision.

The Commission vote to file the civil penalty complaint was 3-2, with Commissioners Noah Joshua Phillips and Christine S. Wilson dissenting. The FTC filed the complaint in the U.S. District Court for the Northern District of Illinois.

The Federal Trade Commission and the State of Florida are taking action against Grant Bae and its owner, Traeshonna P. Graham, a COVID-19 scammer preying on minority-owned small businesses seeking pandemic relief. The complaint alleges that the fictitious grant-writing service scammed each business out of thousands of dollars with false promises of easy access to “guaranteed” grant funding and COVID-19 economic benefits that did not materialize. In response to a complaint filed by the FTC and the State of Florida, a federal court has temporarily shut down the company and frozen the defendants’ assets.

The complaint alleges that Florida-based Grant Bae violated multiple laws, including the COVID-19 Consumer Protection Act, the FTC Act, and the Florida Deceptive Unfair Trade Practices Act by in targeting minority-owned small businesses with claims that they could access millions of dollars in grant funding if they paid for the company’s services.

“These scammers targeted minority-owned businesses and misused public funds meant to support honest businesses during the pandemic,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Working with our state partners and with new authority granted by Congress, we will continue to shut down frauds that prey on people during the pandemic.” 

According to the complaint, C Lee Enterprises LLC and Graham, who refers to herself as “The Grant Bae,” have marketed grant writing and consulting services to minority-owned small businesses through the Grant Bae brand. The false claims about the company’s services and Graham’s own background have been pitched on Facebook, Instagram, and in the Clubhouse audio app where Graham joined social media influencers. The complaint alleges that a handful of influencers and their close associates were the only people who actually received money from Grant Bae.

The FTC’s investigation found that, since at least October of 2020, Graham has deceived consumers about nearly every aspect of Grant Bae and her own qualifications as part of an effort to convince minority-owned businesses she could secure grant funding for them. The complaint alleges that these deceptions, which cost small businesses thousands of dollars, included:

• Falsely promising significant returns. Grant Bae’s marketing has included multiple misleading guarantees of the amounts that businesses would receive from using their services. Grant Bae has claimed that all minority-owned businesses qualified for grant funding of at least $25,000. It also has falsely guaranteed returns based on the package purchased, including claiming that a business buying the $6,999 “Elite” package would receive at least $250,000 in grant funding, and that all customers would receive at least four grants in the first year.

• Misleading customers about grant status. The defendants have provided customers deceptive messages through their online portal that grants have been “awarded” or were “pending.” According to the complaint, the money was never actually sent to customers, and customers often realized this too late to request chargebacks for the upfront money they paid to Grant Bae.

• Deceiving customers about access to grants. Grant Bae has claimed in marketing that it had access to $268 million in grant funding to “disperse throughout all our great clients,” even though no such funds existed. It also has claimed to have secured grant funds from major non-profit foundations and government agencies to distribute to clients.

• Lying about prior success. The defendants’ marketing falsely leads businesses to believe that Grant Bae is a successful enterprise and had provided tens of millions of dollars in grants. Graham also falsely holds herself out as having eight years of experience developing the “gift” of grant writing, but her last known employment was in 2018 at a Krystal fast food restaurant, where she pled guilty to two felony counts of theft for stealing from the restaurant’s cash deposits.

• Failing to provide promised refunds. The complaint alleges that while Grant Bae offers a “money-back guarantee” to the businesses who bought their service, the company often goes silent and blocks contact with customers when they complain about losing money. In one online video, Graham said, “I will block anyone and everyone who feels that they are investing their money in a scam.”

The complaint also alleges that Graham relied on funds she acquired through the federal Paycheck Protection Program COVID-19 stimulus program to start Grant Bae. A month after its founding, the company was approved for a Paycheck Protection Program (PPP) loan, and. Later that summer, Graham herself was approved for another PPP loan as an “independent contractor.” At times, the complaint alleges, Grant Bae said it would apply for COVID-19 Economic Injury Disaster Loans on behalf of customers.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Middle District of Florida.

The Federal Trade Commission finalized an order against CafePress over allegations that it failed to secure consumers’ sensitive personal data including Social Security numbers and covered up a major data breach. The Commission’s order requires the company to bolster its data security and requires its former owner to pay a half million dollars to compensate small businesses.

In a complaint, first announced in March 2022, filed against Residual Pumpkin Entity, LLC, the former owner of CafePress, and PlanetArt, LLC, which bought CafePress in 2020, the FTC alleged that the online customized merchandise platform failed to implement reasonable security measures to protect the sensitive information of buyers and sellers stored on its network and failed to adequately respond to several security breaches. The FTC alleged CafePress:

• Stored Social Security numbers and password reset answers in clear, readable text;
• Retained the data longer than was necessary;
• Failed to apply readily available protections against well-known threats and adequately respond to security incidents; and
• Covered up a major data breach resulting from its shoddy security practices.

Under the order finalized by the Commission, Residual Pumpkin and PlanetArt must implement comprehensive information security programs that require them, among other things, to:

• Replace inadequate authentication measures with multifactor authentication methods;

• Minimize the amount of data they collect and retain:
• Encrypt Social Security numbers; and
• Have a third party assess their information security programs and provide the Commission with a redacted copy of that assessment suitable for public disclosure.

In addition, Residual Pumpkin must pay $500,000, which will be used to provide redress to victims of the data breaches. PlanetArt will be required to notify consumers whose personal information was accessed as a result of the data breaches and provide specific information about how consumers can protect themselves.

After receiving three comments, the Commission voted 5-0 to finalize the orders with Residual Pumpkin and PlanetArt and send responses to the commenters.

The Federal Trade Commission has proposed a rule to ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience. As auto prices surge, the Commission is seeking to eliminate the tricks and traps that make it hard or impossible to comparison shop or leave consumers saddled with thousands of dollars in unwanted junk charges. The proposed rule would protect consumers and honest dealers by making the car-buying process more clear and competitive. It would also allow the Commission to recover money when consumers are misled or charged without their consent.

“As auto prices surge, the Commission is taking comprehensive action to prohibit junk fees, bait-and-switch advertising, and other practices that hit consumers’ pocketbooks,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Our proposed rule would save consumers time and money and help ensure a level playing field for honest dealers.”

In the last ten years alone, the FTC has brought more than 50 law enforcement actions related to automobiles and helped lead two nationwide law enforcement sweeps that included 181 state-level enforcement actions in these areas. In spite of these actions, complaints from consumers related to automobiles remain in the top ten complaint types received by the FTC, with more than 100,000 complaints from consumers annually over the past three years.

Today, the FTC is taking a first step toward establishing a set of guidelines that would provide consumers with key protections against dealers who unlawfully charge junk fees without their consent or engage in bait-and-switch advertising. In the Notice of Proposed Rulemaking announced today, the Commission is seeking comment on proposed measures that would:

• Ban bait-and-switch claims: The proposal would prohibit dealers from making a number of deceptive advertising claims to lure in prospective car buyers. This deal deception can include the cost of a vehicle or the terms of financing, the cost of any add-on products or services, whether financing terms are for a lease, the availability of any discounts or rebates, the actual availability of the vehicles being advertised, and whether a financing deal has been finalized, among other areas. Once in the door or on the hook, consumers face the fallout of false promises that don’t pan out.

• Ban fraudulent junk fees:  The proposal would prohibit dealers from charging consumers junk fees for fraudulent add-on products and services that provide no benefit to the consumer (including “nitrogen filled” tires that contain no more nitrogen than normal air).

• Ban surprise junk fees: The proposal would prohibit dealers from charging consumers for an add-on without their clear, written consent and would require dealers to inform consumers about the price of the car without any of optional add-ons.

• Require full upfront disclosure of costs and conditions: The proposal would require dealers to make key disclosures to consumers, including providing a true “offering price” for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees. It would also require dealers to make disclosures about optional add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms.

The notice includes questions for public comment to inform the Commission’s decision-making on the proposal. These include questions about provisions in the proposed rule and whether other provisions should or should not be included in the rule, as well as questions related to the costs and benefits to consumers and auto dealers of the proposed rule. In addition, the notice includes a preliminary regulatory analysis estimating that the net economic benefit of the rule would be more than $29 billion over ten years. After the Commission reviews the comments received, it will decide whether to proceed with issuance of a final rule.

The Commission vote to approve the Federal Register notice announcing the notice was 4-1. Chair Lina M. Khan, Commissioner Noah Joshua Phillips, Commissioner Rebecca Kelly Slaughter, and Commissioner Alvaro M. Bedoya issued a joint statement. Commissioner Wilson issued a dissenting statement. The notice will be published in the Federal Register soon. Instructions for filing comments appear in the notice. Comments must be received 60 days from the publication date of the Notice.

The Federal Trade Commission is taking action against motorcycle manufacturer Harley-Davidson Motor Company Group, LLC and Westinghouse outdoor generator maker MWE Investments, LLC for illegally restricting customers’ right to repair their purchased products. The FTC’s complaints charge that the companies’ warranties included terms that conveyed that the warranty is void if customers use independent dealers for parts or repairs. The FTC is ordering Harley-Davidson and Westinghouse to fix warranties by removing illegal terms and recognizing the right to repair, come clean with customers, and ensure that dealers compete fairly with independent third-parties.

“Consumers deserve choices when it comes to repairing their products, and independent dealers deserve a chance to compete,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “These orders require Harley and Westinghouse to fix their warranties, come clean with consumers, and ensure fair competition with independent providers. Other companies that squelch consumers’ right to repair should take notice.”

Wisconsin-based Harley-Davidson sells motorcycles worldwide, and Ohio-based MWE Investments sells Westinghouse-brand outdoor power generators and related equipment. Each company offers limited warranties to consumers who buy their products that provide for no-cost repair or replacement, should the products have defects or other issues.

The FTC has made it a priority to protect consumers’ right to repair their products. The Magnuson Moss Warranty Act is one of the FTC’s tools to address repair restrictions. It prohibits a company from conditioning a consumer product warranty on the consumer’s using any article or service which is identified by brand name unless it is provided for free. Following the FTC’s right to repair report Nixing the Fix, the Commission issued a Policy Statement on Repair Restrictions Imposed by Manufacturers pledging to ramp up investigations into illegal repair restrictions.

According to the FTC’s complaints, both companies were imposing illegal warranty terms that voided customers’ warranties if they used anyone other than the companies and their authorized dealers to get parts or repairs for their products. The FTC also alleged that Harley-Davidson failed to fully disclose all of the terms of its warranty in a single document, requiring consumers to contact an authorized dealership for full details. The FTC alleges that these terms harm consumers and competition in multiple ways, including:

• Restricting consumers’ choices: Consumers who buy a product covered by a warranty do so to protect their own interests, not the manufacturer’s. The companies’ warranties improperly implied that as a condition of maintaining warranty coverage, consumers had to use the company’s part or services for any repairs.

• Costing consumers more money: By telling consumers their warranties will be voided  if they choose third-party parts or repair services, the companies force consumers to use potentially more expensive options provided by the manufacturer. This violates the Warranty Act, which prohibits these clauses unless a manufacturer provides the required parts or services for free under the warranty or is granted an exception from the FTC.

• Undercutting independent dealers: The Warranty Act’s tying prohibition protects not just consumers, but also independent repairers and the manufacturers of aftermarket parts. By conditioning their warranties on the use of authorized service providers and branded parts, the companies infringed the right of independent repairers and manufacturers to compete on a level playing field. 

• Reducing resiliency: Consumers rely on the companies’ products for emergency power and transportation. Robust competition from aftermarket part manufacturers is critical to ensuring that consumers get the replacement parts they need when they need them and are not at the mercy of branded part supply chains. More resilient and repairable products also lead to less waste in the form of products that could otherwise be fixed. 

Enforcement Actions

Under the FTC Act and the Warranty Act, the FTC has the authority to take action against companies violating consumer protection laws, including those engaging in unfair or deceptive acts or practices. The FTC’s orders in these cases:

• Prohibit further violations: The companies will be prohibited from further violations of the Warranty Act, and in Harley-Davidson’s case, the Disclosure Rule. They will also be prohibited from telling consumers that their warranties will be void if they use third-party services or parts, or that they should only use branded parts or authorized service providers. If the companies violate these terms, the FTC will be able to seek civil penalties of up to $46,517 per violation in federal court.

• Recognize consumers’ right to repair: Both companies will be required to add specific language to their warranties saying, “Taking your product to be serviced by a repair shop that is not affiliated with or an authorized dealer of [Company] will not void this warranty. Also, using third-party parts will not void this warranty.”

• Come clean with consumers: Both companies must send and post notices informing customers that their warranties will remain in effect even if they buy aftermarket parts or patronize independent repairers.

• Alert dealers to compete fairly: Both companies are being required to direct authorized dealers to remove deceptive display materials, train and monitor employees, and not promote branded parts and dealers over third parties.

The Commission vote to issue the administrative complaints and to accept the consent agreement was 5-0. Chair Lina M. Khan and Commissioner Rebecca Kelly Slaughter issued a statement. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, beginning today and continuing through July 22, 2022, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice. Once processed, comments will be posted on Regulations.gov.

The Federal Trade Commission has finalized an order against Resident Home LLC and owner Ran Reske for allegedly making false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials. Resident Home LLC and Reske will pay $753,000.

In the company’s promotional material, Resident Home LLC and Reske claimed that their DreamCloud mattresses were “proudly made with 100 percent USA-made premium quality materials.” But, according to the complaint, these claims were false or misleading, and violated the FTC Act. The FTC says all DreamCloud mattresses are finished overseas and, in some cases, are wholly imported or use significant imported materials.

Under the terms of the final order, in addition to paying $753,000, Resident Home LLC and Reske are prohibited from making several claims that deceive consumers and harm law-abiding businesses whose sales were siphoned because of this behavior. The order specifically covers unqualified U.S.-origin claims (claims made with no limitations) for any product, unless they can show that:

• the product’s final assembly, final processing, and all significant processing takes place in the United States; and
• all or virtually all ingredients or components of the product are made and sourced in the United States.

The order also governs any qualified Made in USA claims (claims that include explanatory information). For qualified claims, Resident Home LLC and Reske must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing.

The FTC’s Enforcement Policy Statement on U.S. Origin Claims offers guidance on making Made in USA claims. The Made in USA Labeling Rule went into effect on August 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission voted 3-2 to approve the complaint and settlement order, with Commissioners Noah Joshua Phillips and Christine S. Wilson voting no. The majority issued a statement, and Commissioners Phillips and Wilson issued a joint dissenting statement.  

In response to legal action by the Federal Trade Commission, the U.S. District Court for the Middle District of Florida ordered SPM Thermo-Shield, Inc. to permanently halt deceptive energy-efficiency claims it has been making about wall coating products that it sells for houses and other buildings. The court issued a permanent injunction prohibiting SPM Thermo-Shield and its officers from misrepresenting the coatings’ insulating or energy-saving capabilities.

“We know consumers are concerned about rising energy costs,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “In this environment, it’s more critical than ever that sellers be honest about energy efficiency claims—and we are poised to hold them accountable when they are not.”

In July 2020, the FTC sued four companies, including Florida-based SPM Thermo-Shield, that sell paint products used to coat buildings and homes, alleging they deceived consumers about their products’ insulation and energy-savings capabilities. The FTC charged the companies with falsely overstating the R-value ratings of the coatings, and making deceptive statements about heat flow and insulating power.

A product’s R-value is a measure of its resistance to heat flow: the higher the R-value, the greater the insulating power. Using R-value and other product information, consumers can make purchasing decisions that improve the energy efficiency of their homes. The R-value depends on the type of insulation, its thickness, and its density. The R-value of most insulations also depends on temperature, aging, and moisture accumulation.

The complaint against SPM Thermo-Shield and its officers, Peter and George Spiska, alleged they falsely claimed their Thermo-Shield Roof Coat, Thermo-Shield Exterior Wall Coat, and Thermo-Shield Interior Wall Coat have R-values of R-22 or R-21 and provide significant energy savings for consumers.

Enforcement Action

In issuing the opinion and order the court found that although SPM Thermo-Shield and its officers admitted that the R-value claims the FTC challenged were false, and stated that they had removed them from their marketing materials, the claims did, in fact, reappear after the lawsuit was filed. It permanently prohibits the defendants from:

• Misrepresenting the R-value of any architectural coating product;
• Making unsubstantiated claims that any architectural coating product is equivalent to, or substantially similar to, the R-value of any other product or system or provide the equivalent of adding insulation with a specific R-value; and
• Claiming that any architectural coating product will provide energy savings without disclosing that such savings vary according to several factors, such as location, climate, building type, and level of construction.

The order also prohibits them from providing the “means and instrumentalities” that would allow anyone else to make such misleading R-value or energy-savings claims.

The opinion and order and permanent injunction were filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division. They have now been signed and entered by the Court.

The Federal Trade Commission is sending 22,817 checks totaling more than $2 million to borrowers who lost money to a student loan debt-relief scam that operated under the names Student Debt Doctor.

Consumers who receive checks should cash them within 90 days, as indicated on the check. Recipients who have questions about their refund should call the refund administrator, Analytics, at 844-916-3240. The Commission never requires people to pay money or provide account information to get a refund.

In late 2017, the FTC sued Student Debt Doctor and its owner, Gary B. White Jr. alleging that the company tricked consumers into believing they could receive immediate relief from monthly loan payments and complete loan forgiveness in return for a large, upfront fee. The defendants also told students that their loans were in forbearance when they were not, causing consumers to neglect required payments and to suffer diminished credit scores. In reality, the FTC alleged that the vast majority of consumers lost their hard-earned money but received little or no relief—and some borrowers ended up owing more.

In December 2018, the FTC announced a stipulated final order that bans White and his company from the debt-relief industry and from making misrepresentations related to financial products or services.

The U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The money being returned to consumers today comes from settlements that were entered before the Supreme Court’s decision. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of Commission refunds. In 2020, Commission actions led to more than $483 million in refunds to consumers across the country.