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.

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.

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.

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.

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, January 19, 2023. The open meeting will commence at 1pm 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 January 19 Commission meeting:

Business Before the Commission

Staff Presentation on Age-Related Fraud Reporting Trends: Staff in the Division of Consumer Response and Operations will present on the striking age-related differences seen in fraud reports from the public. The presentation will address differences in the reporting rates and reported individual loss amounts of younger and older adults, as well as differences in their likelihood of reporting various types of fraud.

Recognizing the Extraordinary Contributions of FTC Staff: The Chair will highlight a selection of individual award recipients honored during the FTC’s recent annual awards ceremony.

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 January 19 meeting.

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 January 17 at 8 p.m. 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 January 19, 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 has finalized an order with online alcohol marketplace Drizly and its CEO over security failures by the company that the FTC said led to a data breach exposing the personal information of about 2.5 million consumers.

According to an FTC complaint first announced in October 2022, Drizly and its CEO James Cory Rellas were alerted to security vulnerabilities two years prior to the 2020 breach yet failed to take steps to protect consumers’ data from hackers despite publicly claiming to have appropriate security protections in place. The FTC said Drizly failed to implement basic security measures, stored critical database information on an unsecured platform, and neglected to monitor security threats.

The FTC’s order, among other things, requires Drizly to destroy any personal data it collected that is not necessary for it to provide products or services to consumers and must refrain from collecting or storing personal information unless it is necessary for specific purposes outlined in a retention schedule. It must also publicly detail on its website the information it collects and why such data collection is necessary. In addition, Drizly is required to implement a comprehensive information security program and establish security safeguards to protect against the types of security incidents outlined in the complaint.

In addition to the requirements imposed on Drizly, Rellas must implement an information security program at future companies if he moves to a business collecting consumer information from more than 25,000 individuals, and where he is a majority owner, CEO, or senior officer with information security responsibilities.

After receiving no substantive comments, the Commission voted 4-0 to finalize the complaint and order against Drizly.

The Federal Trade Commission is sending payments totaling more than $2.9 million to 20,402 people who paid thousands of dollars for Warrior Trading’s investment programs. The company made misleading and unrealistic claims to sell a day trading “system” that failed to pay off for most customers.

The FTC will begin sending payments today by check and PayPal. Consumers who get a check should cash it within 90 days. Consumers who get a PayPal payment should accept it within 30 days. Recipients who have questions about their payment should call the refund administrator, JND Legal Administration, at 844-633-0694. The Commission never requires people to pay money or provide account information to get a payment.

The FTC sued Warrior Trading and its CEO and founder, Ross Cameron, in April 2022, alleging that the company made deceptive earnings claims throughout its sales pitch. Warrior Trading claimed to sell a day trading strategy that would show consumers “how to make a profit in the markets.” In its advertisements, Warrior Trading showcased the trading results of Ross Cameron, claiming that his strategies were both “profitable” and “scalable.” According to the FTC’s complaint, the vast majority of customers actually lost money trading—in some cases thousands of dollars—on top of the thousands they paid Warrior Trading.

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 has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the FTC enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The act directs agencies to implement annual inflation adjustments based on a prescribed formula. The new maximum civil penalty amounts will take effect upon publication in the Federal Register.

The maximum civil penalty amount has increased from $46,517 to $50,120 for violations of Sections 5(l), 5(m)(1)(A), and 5(m)(1)(B) of the FTC Act, Section 7A(g)(l) of the Clayton Act, and Section 525(b) of the Energy Policy and Conservation Act. It has increased from $612 to $659 for violations of Section 10 of the FTC Act.

The maximum civil penalty amount has increased from $1,323,791 to $1,426,319 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register notice.

The Commission vote to publish the Federal Register notice amending Commission Rule 1.98 was 4-0.

The Federal Trade Commission is ordering an end to illegal business tactics that Mastercard has been using to force merchants to route debit card payments through its payment network, and is requiring Mastercard to stop blocking the use of competing debit payment networks.

Under a proposed FTC order, Mastercard will have to start providing competing networks with customer account information they need to process debit payments, reversing a practice the company allegedly had been using to keep them out of the ecommerce debit payment business and, according to the FTC, that violated provisions of the 2010 Dodd-Frank Act known as the Durbin Amendment and its implementing rule, Regulation II.

“This is a victory for consumers and the merchants who rely on debit card payments to operate their businesses,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Congress directed the FTC to enforce this part of the Dodd-Frank Act and prevent precisely this kind of illegal behavior. We take this responsibility seriously, as demonstrated by our action today.”

Debit Card Payment Networks

With more than 80 percent of American adults carrying at least one debit card and over $4 trillion in debit card purchases made every year, debit cards occupy a significant place in the current payment landscape. The popularity of debit cards has been growing especially quickly for purchases consumers make using their personal devices equipped with ewallet applications such as Apple Pay, Google Pay, and Samsung Wallet.

Payment card networks play a critical role in those debit card transactions. When a customer presents their debit card to make a purchase, the network transmits the payment information to the card’s corresponding bank for approval, and then transfers the payment approval or denial back to the merchant. Payment card networks compete for the business of banks that issue cards and for the business of merchants that accept card payments.

Mastercard, along with Visa, is one of the two leading payment card networks in the United States. The processing fees charged by networks total billions of dollars every year, affecting every purchase made with a debit card, according to the FTC. Most of these fees are paid by the merchants to the card-issuing banks and the payment card networks.

To spur more competition among payment card networks, Congress enacted a provision of the 2010 Dodd-Frank Act known as the Durbin Amendment, which required banks to enable at least two unaffiliated networks on every debit card, thereby giving merchants a choice of which network to use for a given debit transaction. The Durbin Amendment—along with its implementing rule, Regulation II—also bars payment card networks from inhibiting merchants from using other networks.

Mastercard’s Illegal Tactics

With the post-Durbin rise of debit ecommerce and ewallet debit transactions, Mastercard was flouting the law by setting policies to block merchants from routing ecommerce transactions using Mastercard-branded debit cards saved in ewallets to alternative payment card networks, including networks that may charge lower fees than Mastercard, the FTC alleged.

Specifically, Mastercard used its control over a process called “tokenization” to block the use of competing payment card networks, the agency alleged. Transactions commonly are “tokenized” by replacing the cardholder’s primary account number with a different number to protect the account number during some stages of a debit transaction.

Tokens are stored in ewallets such as Apple Pay, Google Pay, and Samsung Wallet and serve as a substitute credential to provide additional protection for a cardholder’s account number.

When a debit cardholder makes a debit purchase using an ewallet, the merchant receives a token from the cardholder’s device and sends it to the merchant’s bank, which in turn sends the token to a payment card network for processing. For the transaction to proceed, however, the network must be able to convert the token to its associated account number.

Mastercard’s policy requires use of a token when a cardholder loads a Mastercard-branded debit card into an ewallet, while banks issuing Mastercard-branded debit cards nearly universally use Mastercard to generate the tokens and store the corresponding primary account numbers in its Mastercard “token vault,” the FTC alleged. Since competing networks do not have access to Mastercard’s token vault, merchants are dependent on Mastercard’s converting the token to process ewallet transactions using Mastercard-branded debit cards.

According to the FTC, Mastercard refuses to provide conversion services to competing networks for remote ewallet debit transactions (i.e., online and in-app transactions, as opposed to in-person transactions made by the customer in a store), thereby making it impossible for merchants to route their ewallet transactions on a network other than Mastercard.

Under the FTC consent order, when a competing network receives a token to process a debit card payment, Mastercard is required to provide them with the customer’s personal account number that corresponds to the token. The order also bans Mastercard from taking any action to prevent competitors from providing their own payment token service or offer tokens on Mastercard-branded debit cards and requires Mastercard to comply with provisions of Regulation II.

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. 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 $46,517.

The Federal Trade Commission has voted to extend the public comment period for its advanced notice of proposed rulemaking on changes to the Funeral Rule to January 17, 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 October 2022, the FTC announced that after a rule review, it would retain the Funeral Rule and issued an Advance Notice of Proposed Rulemaking concerning potential amendments to the rule, including whether and how funeral providers should be required to display or distribute their price information online and through electronic means.

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