May 2023

The Federal Trade Commission has launched a refund claims process for consumers who bought products from Fashion Nova, an online fashion retailer that blocked negative reviews from being posted on its website, according to an FTC action announced in January 2022.

The FTC announced in January 2022 that Fashion Nova agreed to pay $4.2 million to settle charges that the company misled consumers by representing that the reviews on its website reflected the views of all customers who submitted reviews, when in fact it suppressed reviews with ratings lower than four stars out of five. The FTC is using the money paid by Fashion Nova to provide payments to customers affected by Fashion Nova’s conduct.

Fashion Nova customers can apply for a payment from this settlement if they meet all the following criteria:

• they bought products from FashionNova.com before November 21, 2019;
• their purchase decisions were influenced by customer reviews and ratings;
• they were not satisfied with the products; and
• they have not already received a refund for the products.

The claims period will be open until August 15, 2023. Consumers can apply online at www.ftc.gov/FashionNova. Consumers who have questions about the process can call the claims administrator at 855-678-0018 or email info@FashionNovaClaims.com. The FTC will review and validate claims. Payment amounts will depend on several factors, including how many people file claims.

The Federal Trade Commission will hold a public workshop on September 7, 2023 seeking input on proposed changes to the Funeral Rule.

The Commission issued an Advance Notice of Proposed Rule Making on November 2, 2022.  The workshop will explore many of the issues raised in the notice, including whether and how funeral providers should be required to display or distribute their price information online or  through electronic means.

The workshop may cover topics such as:

• online or electronic disclosures of price information;
• new forms of disposition of human remains;
• the general price list mandated by the rule;
• the disclosures required by the rule, including the embalming disclosure;
• whether third-party crematory fees and other third-party fees should be disclosed in the general price list; and
• whether funeral providers should be required or permitted to give out general price lists in languages other than English in certain circumstances.

A detailed agenda will be published at a later date, in advance of the scheduled workshop.

The public can submit a comment on these topics until October 10, 2023. Instructions for filing comments will appear in a notice that will be published in the Federal Register soon. Those interested in participating as a panelist at the workshop can email the FTC at funeralrule@ftc.gov by June 19, 2023. If a proposed panelist or commenter is affiliated with an entity that has provided funding for research, analysis, or commentary on relevant topics, please identify such funding and its source in your comment or in your request for consideration as a speaker.

The Commission voted 3-0 to submit the notice regarding the workshop to the Federal Register.

The workshop, which is free and open to the public, will take place at the Constitution Center, 400 7^th Street SW, Washington, D.C., 20024, and will be webcast live on the FTC’s website. The agenda, directions to the Constitution Center building, and a list of speakers will be available in the future on the event webpage.

The Federal Trade Commission is sending payments totaling more than $3.3 million to customers of Passport Auto, a Washington D.C.-area auto dealer. In October 2022, the FTC charged Passport with adding hundreds, or even thousands, of dollars in illegal junk fees to car prices and for discriminating against Black and Latino consumers by charging them higher fees and financing costs.

The FTC is sending checks to more than 18,000 consumers. Recipients should cash their checks within 90 days, as indicated on the check. Consumers who have questions about their payment should contact the refund administrator, Epiq, at 877-701-3692, or visit the FTC website to view frequently asked questions about the refund process. The Commission never requires people to pay money or provide account information to get a refund.

The FTC’s suit against Passport Auto, its president, Everett Hellmuth, and its vice president, Jay Klein, charged that the defendants’ junk fees caused consumers to pay more than the advertised price or lose any discounts they had negotiated.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2022, Commission actions led to more than $392 million in refunds to consumers across the country.

The Federal Trade Commission was selected as president of the International Consumer Protection and Enforcement Network (ICPEN) for 2024-25 during a meeting this week in Sydney, Australia.

The FTC’s presidency will follow the presidency of Poland’s Office of Competition and Consumer Protection.

The meeting focused on exchanging experiences and identifying effective practices in combating cross-border fraud and promoting consumer protection around the world.

ICPEN is an international network of consumer protection authorities from more than 70 countries that aims to protect consumers’ economic interests around the world by sharing information and encouraging global cooperation among law enforcement agencies.

The Federal Trade Commission sued to stop a Voice over Internet Protocol (VoIP) provider, XCast Labs, Inc., that continued to funnel hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings. The Department of Justice filed the complaint in the Central District of California on the FTC’s behalf.

“XCast Labs played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “VoIP providers like XCast Labs that bury their heads in the sand when their customers use their services to break the law can expect to hear from the FTC.”      

XCast Labs, headquartered in Los Angeles, California, is a nationwide provider of VoIP technology, providing services that allow its customers to send and receive phone calls, including robocalls (calls that play a prerecorded message), over the Internet. Telemarketers who blast illegal robocalls typically use VoIP service providers like XCast Labs to transmit their calls.

According to the complaint, in January 2020, the FTC sent letters to a number of VoIP providers, including XCast Labs, warning them that assisting and facilitating illegal telemarketing or robocalling was against the law. The complaint also alleges that XCast Labs received dozens of “traceback” inquiries from US Telecom’s Industry Traceback Group regarding suspected illegal calls that originated on XCast Labs’ network, as well as inquiries from law enforcement agencies about transmission of suspected illegal traffic on the XCast Labs network. Even after receiving these direct warnings, the FTC alleges that XCast Labs transmitted illegal robocalls to consumers.

In addition, the FTC discovered that many of these suspect robocalls were part of organized campaigns designed to generate telemarketing leads by, for example, impersonating federal officials from the Social Security Administration. Lead generators sell the information they gather to telemarketers, who then use consumers’ information to pester them with even more unwanted, illegal calls.

The Commission vote authorizing the staff to refer the complaint to the Department of Justice for filing was 4-0, and was taken before Commissioner Christine S. Wilson left the FTC. The DOJ filed the complaint in the U.S. District Court for the Central District of California. Thomas Biesty and Frances Kern of the Bureau of Consumer Protection were the primary FTC staff on this matter.

NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The case will be decided by the court.

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, May 18, 2023. The open meeting will commence at 11am ET and will begin with time for members of the public to address the Commission.

The following items will be on the tentative agenda for the May 18 Commission meeting:

Business Before the Commission

Policy Statement on Biometric Information and Section 5 of the FTC Act: The Commission will vote to issue a Policy Statement on biometric information and Section 5 of the FTC Act. The Policy Statement will list examples of some of the practices the Commission will scrutinize in determining whether companies collecting and/or using or marketing biometric information technologies are complying with Section 5 of the FTC Act.

Notice of Proposed Rulemaking to Amend the Health Breach Notification Rule: The Commission will vote to issue a Notice of Proposed Rulemaking to amend the Health Breach Notification Rule, which requires vendors of personal health records and related entities to notify consumers of the breach of their unsecured identifiable health information. The proposed amendments would help clarify technologies and entities covered by the Rule, facilitate greater electronic breach notices to consumers, and expand the required content of the notices, among other changes.

At the start of the meeting, Chair Khan will offer brief remarks and will then invite members of the public to share feedback on the Commission’s work generally and bring relevant matters to the Commission’s attention. Members of the public must sign up for an opportunity to address the Commission virtually at the May 18 event.

Each commenter will be given two minutes to share their comments. Those who cannot participate during the event may submit written comments or a link to a prerecorded video through a webform. Speaker registration and comment submission will be available through Tuesday, May 16, 2023 at 8 pm ET.

The FTC’s public meeting agendas will be posted on the Commission’s website at least seven days prior to the Commission’s next monthly meeting. A link to the event will be available on the day of the event, shortly before the meeting starts via FTC.gov. The event will be recorded, and the webcast and any related comments will be available on the Commission’s website after the meeting. The Commission retains discretion to make public comments available following the event on ftc.gov.

The Federal Trade Commission released the tentative agenda for its May 23 workshop in Washington, DC, which will examine the Commission’s guidance on “recyclable” advertising claims as part of its ongoing review of the Guides for Use of Environmental Marketing Claims (Green Guides). The workshop, Talking Trash: Recyclable Claims and the Green Guides, is free and open to the public, and pre-registration is not required.

In-person registration will begin at 7:45 am, followed by a welcome and opening remarks by James Kohm, Associate Director of the Enforcement Division within the FTC’s Bureau of Consumer Protection.

The half-day event will feature three panel discussions featuring a range of stakeholders. The panel discussions will focus on:

• The Current State of the Recycling Market and Claims: This session will include discussion of current conditions in the consumer recycling space, operation of recycling programs, markets for recyclable products, and advertising claims.

• Consumer Perception of Recycling Claims: This session will explore available evidence of how consumers understand “Recyclable” advertising claims.

• The Future of the Green Guides: This session will build on the previous sessions to analyze whether changes or updates are needed to ensure the Green Guides continue to provide accurate guidance to marketers on how to avoid making deceptive “Recyclable” claims.

The event will be webcast on the FTC’s website, www.ftc.gov. Registration is not required to watch the webcast. In conjunction with this event, the Commission is seeking additional public comment. The public will have until June 13, 2023 to submit comments to accommodate those who wish to provide input on the topics discussed at the event. Information on how to submit comments can be found on Regulations.gov.

The Federal Trade Commission has stopped a pair of student loan debt relief schemes that it says bilked students out of approximately $12 million by using deceptive claims about repayment programs and loan forgiveness that did not exist. The agency also says the companies falsely claimed to be or be affiliated with the Department of Education and told students that the illegal payments the companies collected would count towards their loans.

The FTC notes that one of the companies and its owners also violated the COVID-19 Consumer Protection Act by misrepresenting that their program was part of the CARES Act or a similar COVID-19 relief program.

“As Americans struggle with massive student loan debt and uncertainty around the prospect of forgiveness, scammers are looking to cash in,” said Samuel Levine, Director of FTC’s Bureau of Consumer Protection. “These lawsuits to shut down student loan debt relief schemes continue the agency’s crackdown on junk fees, unwanted calls, and financial exploitation.”

According to the FTC’s complaints, since at least 2019, SL Finance LLC and its owners Michael Castillo and Christian Castillo, and BCO Consulting Services Inc. and SLA Consulting Services Inc. and their owners Gianni Olilang, Brandon Clores, Kishan Bhakta, and Allan Radam have lured consumers looking to pay down their student loans, many of whom are low-income borrowers saddled with tens of thousands of dollars of student debt, into paying hundreds to thousands of dollars in illegal upfront fees. According to the complaints, the defendants tricked consumers into believing they were enrolled in a legitimate loan repayment program, that their loans would be forgiven in whole or in part, and that most or all of consumers’ payments to the companies would be applied to their loan balances. In reality, the defendants were pocketing students’ payments, according to the FTC’s complaint.

The agency also charges that the defendants falsely claimed to be or be affiliated with the Department of Education, and that they would take over servicing for students’ loans. Both complaints note that the misrepresentations by defendants about their purported debt relief services violated Section 5 of the FTC Act and the Telemarketing Sales Rule (TSR). Both complaints also note that the companies have violated the TSR by collecting advance fees for debt relief services and violated the Gramm-Leach-Bliley Act by using deceptive tactics to obtain consumers’ financial information. Lastly, SL Finance LLC and its owners violated the TSR by calling consumers who had signed up for the Do Not Call Registry and by failing to pay required Do Not Call Registry fees.

After the FTC filed complaints seeking to end the deceptive practices, a federal court temporarily halted the two schemes and froze the assets of SL Finance LLC and its owners  and BCO Consulting and SLA Consulting and their owners.

The Commission votes authorizing the staff to file the complaints were 3-0. The U.S. District Court for the Central District of California entered temporary restraining orders in the two cases on May 2, 2023 and May 3, 2023.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The lead staff attorneys on this matter are Katherine Aizpuru and Samuel Jacobson of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission released the tentative agenda for its May 18 workshop in Washington, DC, which will examine proposed changes to its Ophthalmic Practice Rules, also known as the Eyeglass Rule. The workshop, A Clear Look at the Eyeglass Rule, is free and open to the public, and pre-registration is not required.

In-person registration will begin at 7:45 am, followed by a welcome and opening remarks by Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

The half-day event will feature three panel discussions focused on:

• Prescription Release: The FTC recently sent cease-and-desist letters to prescribers of eyeglasses and contact lenses based on consumer complaints that patients were not automatically given, or denied, or charged for their prescriptions. This panel will consider the need for the Eyeglass Rule’s prescription release requirement in today’s marketplace.

• Examining the Confirmation Requirement and Lessons Learned from the Contact Lens Rule: Panelists will discuss how the confirmation of contact lens prescription release is working in practice: What methods are prescribers using to fulfill their obligations to obtain a signed confirmation and keep a record of it for three years; are there any options for easing the burden of this requirement; and what compliance issues have arisen?  The event will also feature a presentation from a practicing optometrist discussing how the confirmation requirement for contact lenses is being implemented.

• Other Proposed Rule Changes: The FTC is considering three other amendments to the rule — allowing prescribers, with a patient’s verifiable affirmative consent, to provide the patient with a digital copy of a prescription in lieu of a paper copy; clarifying that a patient’s proof of insurance coverage is considered payment for the purpose of determining when a prescription must be provided; and changing the term “eye examination” to “refractive eye examination” throughout the rule.

The event will be webcast on the FTC’s website, www.ftc.gov. Registration is not required to watch the webcast. Information on the panelists and other speakers can be found on the event page. The public will have until June 20, 2023, to submit public comments on the topics that will be discussed at the event.