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FTC Finalizes Order with Ed Tech Provider Chegg for Lax Security that Exposed Student Data


The Federal Trade Commission has finalized its order with education technology provider Chegg Inc. for its careless data security practices that exposed sensitive information about millions of Chegg’s customers and employees, including Social Security numbers, email addresses, and passwords.

In a complaint first announced in October 2022, the FTC said that Chegg failed to protect the personal information it collected from users and employees. For example, the company stored users’ personal data on its cloud storage databases in plain text and, until at least 2018, employed outdated and weak encryption to protect user passwords. As a result of its poor data security, Chegg experienced four data breaches that exposed the personal information of about 40 million users and employees, including users’ email addresses and sensitive scholarship data such as their dates of birth, sexual orientation and disabilities, as well as financial and medical information about Chegg employees.

The FTC’s order requires Chegg to implement a comprehensive information security program, limit the data the company can collect and retain, offer users multifactor authentication to secure their accounts, and allow users to request access to and deletion of their data.

After receiving only one substantive comment, the Commission voted 4-0 to finalize the order with Chegg and send a letter to the commenter.



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FTC Returns More Than $973,000 to Consumers Charged by NutraClick LLC for Unwanted Monthly Subscriptions for Supplements and Beauty Products


The Federal Trade Commission is sending payments totaling more than $973,000 to 17,064 people who lost money after NutraClick LLC automatically enrolled them in unwanted membership programs for supplements and beauty products and misled consumers about when they had to cancel trial memberships to avoid monthly charges.

The FTC will begin sending payments today by check. Consumers who get a check should cash it within 90 days. Recipients who have questions about their payment can call the refund administrator, Analytics, at 844-735-1139, or browse answers to frequently asked questions about FTC refunds. The Commission never requires people to pay money or provide account information to get a payment.

In 2016, NutraClick agreed to settle the FTC’s complaint alleging that it lured consumers with “free” samples of supplements and beauty products and then violated the law by charging them a recurring monthly fee without their consent. The settlement required NutraClick to clearly and conspicuously disclose the terms of its recurring membership programs going forward.

In September 2020, the FTC filed another complaint against the company, alleging it violated federal law and the 2016 settlement order by misleading consumers about when they had to cancel their free trial memberships to avoid monthly charges. The defendants agreed to pay $1.04 million for consumer refunds and are banned from such negative option marketing.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2021, Commission actions led to more than $472 million in refunds to consumers across the country, but these refunds were the result of cases resolved before the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court. Because of that ruling, the Commission no longer has its strongest tool to return money to consumers, and it will become harder to provide refunds to consumers harmed by deceptive and unfair conduct. The Commission has urged Congress to restore its ability to get money back for consumers.



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FTC Marks Identity Theft Awareness Week for 2023 on January 30-February 3


The Federal Trade Commission will mark its annual Identity Theft Awareness Week with a series of free events January 30-February 3 focused on how identity theft affects people of every community and ways to reduce your risk.

Identity theft happens when someone uses your personal or financial information—such as your Social Security number or financial account information—without your permission.

This year’s events include webinars, podcasts and other activities. Participants will hear from experts from the FTC and its Identity Theft Awareness Week partners, including AARP, Consumer Action, the Identity Theft Resource Center (ITRC), the IRS, the Maryland Library for the Blind and Print Disabled, the Small Business Administration, and the Department of Veterans Affairs.

The week’s activities will formally kick off on January 30 with a webinar by the ITRC and FTC offering an overview of the financial, emotional, and physical impacts of identity theft, and a discussion of how identity theft happens and how to lower your risk. The week will end February 3 with a podcast discussion with college students about financial aid scams, job scams, and other tactics identity thieves use to steal personal information.

Find the full list of events at ftc.gov/IDTheftweek. Consumers who have experienced identity theft can report it to the FTC and get a personalized recovery plan at IdentityTheft.gov.



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FTC Finalizes Order Requiring Credit Karma to Pay $3 Million and Halt Deceptive ‘Pre-Approved’ Claims


Following a public comment period, the Federal Trade Commission finalized a consent order settling charges that credit services company Credit Karma for deploying dark patterns to misrepresent that consumers were “pre-approved” for credit card offers.

The FTC’s complaint, first announced in September 2022, said that the company used claims that consumers were “pre-approved” and had “90% odds” to entice them to apply for offers that, in many instances, they ultimately did not qualify for.

The FTC’s consent order requires the company to pay $3 million that will be sent to consumers who wasted time applying for these credit cards and to stop making these types of deceptive claims.

The Commission vote to approve the final order and letters to commenters was 4-0.



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FTC Order Requires HomeAdvisor to Pay Up To $7.2 Million and Stop Deceptively Marketing its Leads for Home Improvement Projects


The Federal Trade Commission today issued an order requiring Denver-based HomeAdvisor, Inc. – a company affiliated with Angi, formerly known as “Angie’s List” – to pay up to $7.2 million for using a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesses operating in the “gig” economy.

The administrative order also bars HomeAdvisor from the deceptive conduct detailed in the Commission’s complaint against the company, which the complaint alleged occurred over many years, and sets up two redress funds to provide money to defrauded service providers. The administrative order will be subject to public comment after which the Commission will decide whether to make the order final.

“Today’s order requires HomeAdvisor to refund home service providers millions of dollars and stop misleading them about the quality of its leads,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Even as the nature of work and the economy change, the FTC will continue to combat dishonest commercial practices aimed at consumers, workers, and small businesses.”

Today’s action is the first announced since the Commission issued its Policy Statement on Enforcement Related to Gig Work, which committed the agency to rooting out unfair, deceptive, or anticompetitive practices in the gig economy. It builds on other efforts to protect gig workers and small businesses, including the Commission’s Notice of Penalty Offenses on Money-Making Opportunities, and ANPR on Earnings Claims.

HomeAdvisor, which also does business as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers, such as general contractors and lawn care businesses, to join the company’s network. Once service providers join the network, HomeAdvisor sells them leads, which the service providers use to contact potential customers for home repair and maintenance projects.

Service providers who join HomeAdvisor’s network generally pay an annual membership fee of $287.99, in addition to a separate fee for each lead they receive. As part of their HomeAdvisor membership package, many service providers have also paid an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, which includes software that helps with scheduling appointments and processing payments.

The FTC’s March 2022 administrative complaint against HomeAdvisor charged that since at least mid-2014 it has made false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers who are in search of potential customers. For example, the complaint alleged that, while HomeAdvisor has represented that service providers only will receive leads matching the types of services they provide and their preferred geographic area, many of them do not.

The complaint also alleged that HomeAdvisor often tells service providers that its leads result in jobs at rates much higher than it can substantiate. Finally, the complaint alleged that HomeAdvisor’s sales agents misrepresented that the optional one-month mHelpDesk subscription was free.

In addition to requiring that HomeAdvisor pay up to $7.2 million for redress, the proposed order prohibits the company from making any false or misleading claims regarding its leads, including that they concern individuals who are ready to hire a service provider or who submitted a request for home services directly to HomeAdvisor. It also bars HomeAdvisor from misrepresenting its products as free when they are not, or making unsubstantiated claims about the rate at which its leads convert into paying jobs.

The redress program included in the order would administer two separate funds. The first would make payments of up to $30 to service providers affected by HomeAdvisor’s misrepresentations about its lead quality. The second would make payments of up to $59.99 to service providers who were told that the first month of their mHelpDesk subscription was free.

The Commission vote to accept the proposed consent agreement was 4-0. 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, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments will appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $50,120.

The lead staff attorney on the HomeAdvisor matter was Sophia H. Calderón of the FTC’s Northwest Region.



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FTC Order Requires LasikPlus to Pay for its Bait-and-Switch Eye Surgery Ads


The Federal Trade Commission today issued an order requiring Ohio-based LCA-Vision, doing business as LasikPlus and Joffe MediCenter, to pay $1.25 million for using deceptive bait-and-switch advertising to trick consumers into believing they could have their vision corrected for less than $300. In reality only 6.5 percent of consumers lured in for consultations were eligible for the advertised promotional price for both eyes.

According to the FTC, despite the advertising claims, for consumers with less than near-normal vision (good enough to drive without glasses), the company typically quoted a price between $1,800 and $2,295 per eye. In some ads LCA, the largest nationwide LASIK surgery chain, also neglected to tell consumers up-front that the promotional price was per-eye only.

“LasikPlus lured customers in with a low-price offer that almost no one actually got, and today’s order requires the company to fix its advertising and compensate consumers for their wasted time,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Especially as costs rise, the Commission will not tolerate companies that trick people into thinking they’ll save money on products or services.”

Example of Lasik Plus Advertisement

LCA-Vision operates vision centers in many states, performing procedures including LASIK surgery that can correct vision. While LASIK typically costs consumers about $2,000 per eye, between 2015 and 2020 LCA’s LasikPlus centers ran ads on television, radio, in print, in shopping flyers, and digitally offering the procedure for a promotional price of as low as $250.  During much of the same time its Joffe MediCenters ran ads offering to provide LASIK surgery to consumers for $295. But both the LasikPlus and Joffe MediCenter ads failed to adequately disclose the stringent requirements consumers had to meet to get the discounted promotional price.

According to the FTC’s administrative complaint:

  • LCA aggressively marketed prices of $250 for LASIK surgery, yet only 6.5 percent of patients who received consultations qualified for that price in both eyes, and only 1.3 percent actually ended up getting LASIK for this promotional price;
  • Consumers did not learn the actual price of the LASIK surgery until they had spent considerable time and effort undergoing lengthy full-dilation eye exams and in-person consultations;
  • LCA’s websites failed to consistently disclose eligibility restrictions, or did so only in fine print at the bottom of the page; and
  • LCA’s call center operators also often refused to reveal the eligibility requirements to consumers.

In addition to paying $1.25 million to redress consumers, LCA will be barred from the deceptive conduct alleged in the complaint and required to make certain clear and conspicuous disclosures when advertising LASIK at a price or discount for which most consumers would not qualify. These disclosures include whether the price is per eye, the price most consumers pay per eye, and any requirements or qualifications needed to get the offered price or discount.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 3-1, with Commissioner Christine S. Wilson voting no and issuing a separate dissenting 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, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $50,120.



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Wireless Customers Who Were Subject to Data Throttling by AT&T Can Apply for a Payment from the FTC


The Federal Trade Commission opened a claims process for former AT&T customers who have yet to claim a refund stemming from the FTC’s lawsuit against the company for misleading consumers about its unlimited data plans.

Former AT&T customers may be eligible to claim a refund from the $7 million remaining in a fund created to settle allegations that the wireless provider charged for “unlimited” data plans while reducing their data speeds, a practice known as throttling.

The FTC in 2019 required AT&T to provide $60 million for refunds for failing to disclose to millions of smartphone customers with unlimited data plans that once they reached a certain amount of data use in a given billing cycle, AT&T would reduce or throttle their data speeds. Some customers experienced data speeds so slow that many common phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use.

The money paid by AT&T was deposited into a fund that the company used to provide partial refunds to current and former customers who had unlimited plans that were throttled by AT&T. The company gave a bill credit to current AT&T customers and sent refund checks to former customers.

AT&T has not been able to reach everyone who was eligible for a refund. The FTC is using the remaining $7 million from the fund to provide partial refunds to consumers who meet all these requirements:

  • they are a former AT&T customer;
  • they had an unlimited data plan at some point between October 1, 2011 and June 30, 2015;
  • they experienced data throttling; and
  • they have not received a bill credit or payment from AT&T related to this matter.

Consumers who meet these requirements can submit a claim online at www.ftc.gov/ATT. Consumers can contact the claims administrator by calling 1-877-654-1982 or emailing info@ATTDataThrottling.com if they have questions or if they would like to request a claim form. Consumers have until May 18, 2023, to submit a claim.



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FTC Order Requires Pyrex Glass Manufacturer to Pay for Falsely Claiming Chinese Products Were Made in USA


The Federal Trade Commission has taken action against Instant Brands, manufacturer of Pyrex-brand kitchen and home products, for falsely claiming that all its popular glass measuring cups were made in the United States during a time some measuring cups were imported from China. The FTC’s proposed order against Instant Brands would stop the company from making deceptive claims about products being “Made in USA” and require them to pay a monetary judgment.

“Consumers rely on marketers to make truthful ‘Made in USA’ claims,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.  “If marketers move their manufacturing outside the United States, even temporarily, they must update their advertising to make it accurate.”

According to the FTC’s complaint, Instant Brands faced increased demand for its glass measuring cups in the early days of the COVID-19 pandemic, when consumer interest in home baking spiked. Pyrex has long used the U.S. origin of its products as a selling point. By early 2021, the company was not able to meet the demand for certain measuring cup sets sold on Amazon with cups produced in the United States. From March 2021 to May 2022, Instant Brands produced some Pyrex cups in China.

When the production shifted to China, the company continued to market the Chinese-made products on Amazon as “Made in USA,” despite the cups themselves being marked “Made in China.” While the Chinese cups were being sold the company also continued its marketing that implied all Pyrex cups were of U.S. origin, with claims about the company’s “made in the USA heritage,” and that its products were “American as Apple Pie.”

All told, more than 110,000 units of the Chinese-made measuring cup sets were sold to U.S. consumers as being “Made in USA.”

The FTC’s order against Instant Brands, which the company has agreed to, includes a number of requirements about the claims they make:

  • Restriction on unqualified claims: The company will be prohibited from making unqualified U.S.-origin claims for any product, unless it can show that the product’s final assembly or processing—and all significant processing—takes place in the U.S., and that all or virtually all ingredients or components of the product are made and sourced in the U.S.
  • Requirement for qualified claims: The company is required to include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
  • Requirement for assembly claims: The company must also to ensure, when claiming a product is assembled in the U.S., that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.

The order also requires Instant Brands to pay a $129,416 judgment.

The FTC is committed to ensuring that “Made in USA” claims are truthful. The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides guidance on making non-deceptive “Made in USA” claims. In addition, the FTC recently finalized its Made in USA Labeling Rule, which went into effect on Aug. 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice on regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $50,120.



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FTC Extends Public Comment Period on Potential Business Opportunity Rule Changes to January 31, 2023


The Federal Trade Commission has voted to extend the public comment period for its advanced notice of proposed rulemaking on changes to the Business Opportunity Rule to January 31, 2023. A number of commenters requested that the FTC extend the current deadline due to the holiday season. Information on how to submit comments can be found in the Federal Register notice.

In November 2022, the FTC issued an Advanced Notice of Proposed Rulemaking exploring changes to the Business Opportunity Rule, seeking comment from the public on the rule’s effectiveness and a potential expansion to the rule to cover other types of money-making opportunities, such as coaching or mentoring programs, e-commerce opportunities, or investment opportunities.

The Commission vote approving the public comment period extension was 4-0.



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FTC Suit Requires Investment Advice Company WealthPress to Pay $1.7 Million for Deceiving Consumers


As a result of a Federal Trade Commission lawsuit, investment advice company WealthPress has agreed to a proposed court order that would require it to refund more than $1.2 million to consumers and pay a $500,000 civil penalty for deceiving consumers with outlandish and false claims about their services.

The case marks the first time that the FTC has collected civil penalties against a company that received the Notice of Penalty Offenses regarding money-making opportunities sent last October, and the first civil penalties for violations of the Restore Online Shoppers’ Confidence Act. (ROSCA)

“We’ve brought several cases this year against companies making false earnings claims, and we won’t hesitate to bring more,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “WealthPress is now paying the price for deceiving its customers and ignoring our Notice of Penalty Offenses on money-making claims.”

The FTC’s complaint against WealthPress and its owners, Roger Scott and Conor Lynch, alleges that the company used deceptive claims to sell consumers investment advising services—often claiming that the services’ recommendations were based on a specific “system” or “strategy” created by a purported expert. The company charged consumers hundreds or even thousands of dollars for access to these services.

WealthPress sold consumers on their services with false claims about the likelihood consumers would make money by following the recommended trades, when in many cases consumers lost substantial sums of money. One claim noted in the FTC’s complaint, from a promotional video:

  • “I’ll show you how you can potentially make $24,840 dollars—or more—every single week. With quick simple … trades that require zero market knowledge or trading experience.”

Other video ads included Scott implying that profits from the service’s recommendations enabled him to buy a home in Beverly Hills next door to Julia Roberts and Eddie Van Halen, and charter private planes to take him on vacation. Another supposed “expert” claimed his system allowed him “to do whatever I want, whenever I want,” that it has “granted me ultimate freedom,” and he’ll never have to work again.

The complaint alleges that the company’s videos made it seem as though the supposed “experts” whose trading strategies were being sold to consumers had made numerous successful trades. In fact, the trades were often not real, hadn’t been made by the “expert,” and were never sent to consumers.

In addition, the complaint alleges that the company’s disclaimers were often so far removed from the claims the company was making as to be useless to a consumer. Indeed, so many consumers requested refunds or credit card chargebacks that WealthPress was put on a list of problematic merchants by Mastercard.

The FTC’s complaint alleges that by making these and numerous other deceptive claims to consumers, they were in violation of the Notice of Penalty Offenses, which specifically noted claims like these as having been found unlawful by the FTC in prior cases, as well as the Restore Online Shoppers Confidence Act and the FTC Act.

The defendants in the case have agreed to a proposed court order that would require them to:

  • Surrender money: WealthPress, Scott and Lynch would turn over more than $1.2 million to the FTC for use in providing refunds to consumers harmed by their actions. In addition, WealthPress would pay a $500,000 civil penalty.
  • Back up any earnings claims: The defendants would be prohibited from making any claim about earnings without the evidence to back those claims up in writing.
  • Inform consumers about the case: The defendants would be required to give notice to consumers about the case, the court order, and what they should know before buying an investment-related service.

The Commission vote to authorize the staff to file the complaint and the proposed consent decree was 4-0. Commissioner Christine S. Wilson issued a statement. The FTC filed the complaint and proposed consent decree in U.S. District Court for the Middle District of Florida.

NOTE: The Commission authorizes the filing of 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. Consent decrees have the force of law when approved and signed by the District Court judge.



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