FTC Commissioners voted to deny a motion by the agency’s Bureau of Consumer Protection seeking a summary decision against Intuit Inc. for engaging in allegedly deceptive advertising of its TurboTax tax preparation service.

In an Opinion and Order issued today, the Commission expressed concerns about the advertising campaign but determined that a decision on the merits of the case against Intuit “would be best made after fuller factual development at trial” which will proceed before FTC Administrative Law Judge D. Michael Chappell.

In the complaint against Intuit, the Bureau of Consumer Protection asserts that the company’s ads repeatedly claimed that consumers could file their taxes for free using TurboTax even though TurboTax is free for only some consumers, based on the tax forms they need.

The Commission vote to issue the Opinion and Order was 4-0.

On December 14, 2022, the Federal Trade Commission announced it is seeking public comments on potential updates and changes to the Green Guides for the Use of Environmental Claims. The Commission’s Green Guides help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act. The Commission seeks to update the guides based on increasing consumer interest in buying environmentally friendly products. The public comment period originally was set to expire on February 21, 2023.

At the request of several interested parties, the Commission has extended the public comment period for 60 days, until April 24, 2023. Information about how to submit comments can be found in the Federal Register notice announcing the extension.

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

The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide decreased from 203.7 billion in 2020 to 190.2 billion in 2021, according to the Federal Trade Commission’s most recent Cigarette Report. The report also states that in 2021, menthol flavored cigarettes comprised 37 percent of the market among major manufacturers, more than double the 16 percent market share they held in 1963.

The amount spent on cigarette advertising and promotion increased from $7.84 billion in 2020 to $8.06 billion in 2021. Price discounts paid to cigarette retailers ($6.01 billion) and wholesalers ($917 million) were the two largest expenditure categories in 2021. Combined spending on price discounts accounted for 86 percent of industry spending.

According to the Smokeless Tobacco Report, smokeless tobacco sales decreased from 126.8 million pounds in 2020 to 122 million pounds in 2021. The revenue from those sales rose from $4.82 billion in 2020 to $4.96 billion in 2021. Menthol flavored smokeless tobacco products comprised more than half of all sales and fruit flavored smokeless tobacco products comprised 2.7 percent.

Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. increased from $567.3 million in 2020 to $575.5 million in 2021. As with cigarettes, price discounts made up the two largest spending categories, with $308.2 million paid to retailers and $81.3 million paid to wholesalers in 2021. Combined spending on price discounts represented 67.7 percent of all industry spending.

Smokeless tobacco manufacturers also reported selling $804.8 million of nicotine lozenges or nicotine pouches in 2021, not containing tobacco, up from $422.7 million in 2020.

The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987. The Commission vote to issue the reports was 4-0.

The primary staffer on the reports is Michael Ostheimer in the FTC’s Bureau of Consumer Protection.

The Criminal Liaison Unit of the Federal Trade Commission’s Bureau of Consumer Protection (BCP CLU) has issued its 2022 Criminal Liaison Unit Report, describing the history of the BCP CLU, its program operations, and major accomplishments over the past five years. In an effort to ensure criminal prosecution of appropriate consumer fraud cases, the BCP CLU refers cases to partner agencies with criminal jurisdiction, including U.S. Attorney’s Offices across the county, Divisions of the Department of Justice (DOJ) and others.

“For the worst individual and corporate wrongdoers, civil remedies may not be sufficient to protect the public from further harm,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Government works best when agencies work together toward a common goal, and we are proud that our partnership with criminal enforcers leads to justice for bad actors and a safer marketplace for us all.” 

The FTC, which is not authorized to bring criminal law enforcement actions, established the BCP CLU in 2002 to bring the “worst of the worst” offenders to the attention of prosecutors. As it grew, the BCP CLU worked to establish relationships with prosecutors and educate them about the Commission’s consumer fraud and deception cases. Success in initial cases proved that criminal consumer protection cases were not only viable, but could result in substantial prison sentences.

Over the past five years, the report notes, BCP CLU referrals have led to criminal charges against 107 new defendants, 145 total convictions, and 181 defendants sentenced for consumer fraud. The total sentence time for all defendants was 746 years, with the average sentence being 51 months (approximately 4.3 years) of incarceration.

The BCP CLU Report: 2018-2022

As the BCP CLU has grown over the past 20 years, the program has worked to address prosecutors’ concerns by communicating regularly to understand their priorities and to strategically refer cases most likely to be attractive to them, according to the report. The result has been an established reputation for presenting prosecutors with solid cases that will make the most of their limited time.

The BCP CLU also has established annual awards, which recognize the FTC’s best partners for their criminal prosecution efforts on behalf of U.S. consumers. In 2021, because of the importance of this work as well as BCP CLU’s success to date, the Commission issued a Statement Regarding Criminal Referral and Partnership Process, where the agency recommitted itself to a robust program of criminal referrals across both its competition and consumer protection missions.

The 2022 BCP CLU Report includes information on:

• Significant early BCP CLU cases and their results;
• An overview of BCP CLU program operations;
• A description of BCP CLU cooperative efforts with other law enforcers;
• A list of BCP CLU Award recipients;
• A summary of BCP CLU accomplishments between 2018 and 2022; and
• A look forward to the future of the program, including current priorities.

More information about the BCP CLU can be found here on the FTC’s website.

Sarah Waldrop, the BCP CLU Chief, was the lead staffer on this report.

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.

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.

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.

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.

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.

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.”

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.