Blog – Law Office of Robert Scarino

COPPA Protects Children’s Privacy Rights

Fri, 19 Oct 2018 15:47:00 GMT

In 1998, Congress enacted the Children’s Online Privacy Protection Act (COPPA) to protect the privacy and safety of children under the age of 13. Among other things, COPPA protects children’s privacy rights by prohibiting websites, apps and online services from collecting and disclosing their personal information without first obtaining parental consent .

How does COPPA protect children’s privacy rights?

COPPA, along with certain rules and regulations promulgated by the Federal Trade Commission (FTC), require the operators of commercial websites, app developers and third party online services to meet certain requirements if they have actual knowledge that their site, app or service collects, uses or discloses personal information obtained from children. These requirements include:

Do parents have recourse against companies that violate their children’s privacy rights?

Unfortunately, parents can’t sue companies for simply failing to comply with COPPA’s requirements (although the FTC and can frequently does). But conduct that violates COPPA may also be an unfair or deceptive act or practice that violates our consumer protection law, Mass. General Laws Chapter 93A .

Any parent who successfully sues a website operator, an app developer or third party service for violating Chapter 93A may be entitled to money damages and reimbursement for their legal fees. Judges also have the power to double or triple damages for knowing and willful violations of Chapter 93A.

Are COPPA violations common?

Very. A lot of websites, apps and online services that collect and mine personal information from children make a habit of pushing the envelope when it comes to complying with COPPA’s requirements. A recent study found that thousands of apps designed specifically for children were collecting their personal information without first providing notice and obtaining parental consent.

This study prompted Massachusetts Senator Ed Markey and Connecticut Senator Richard Blumenthal to write a letter to the FTC last month to “express their concern about the growing number of children’s applications that have been alleged to improperly track children and collect their personal information.” A copy of the letter can be found here .

The FTC’s response was not known when this post was written.

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Do Not Track – A Failed Experiment

Wed, 17 Oct 2018 19:34:00 GMT

Do Not Track is a privacy setting in Chrome, Firefox and other web browsers. When we choose the Do Not Track option (it’s turned off by default), our browser sends a request to the websites we visit that asks the site not collect or track our browsing data .

While that sounds like a terrific idea to anyone who doesn’t want to see creepy, targeted ads based on their web browsing history, it’s unfortunately not that simple. Simply stated, Do Not Track doesn’t work. Worse, it may give some us a false sense of security. Reporter Kashmir Hill, writing in Gizmodo compares DNT to a ” spray-on sunscreen” that makes us feel safe but does nothing to actually protect us. If you have activated DNT in your browser, keep in mind that it won’t stop websites from tracking you across the web and using the data to target you with personalized ads.

Why doesn’t Do Not Track do what it was designed to do?

The answer is surprisingly simple. DNT doesn’t stop data collection and tracking because only a handful of websites comply with our requests not to be tracked.That includes social media platforms like Facebook and Twitter, as well as search engines like Google and Yahoo. And think about this for a moment. Google’s Chrome browser allows users to enable the Do Not Track option through their privacy settings. But Google itself won’t comply with a Chrome user’s stated preference not to be tracked.

This isn’t the way it was supposed to be. Do Not Track was intended to be an internet version of the national Do Not Call Registry , which is designed to stop unwanted telemarketing calls. Although Do-Not-Call has been reasonably successful in accomplishing its intended purpose (although it unfortunately can’t stop robocalls from scammers), that’s not the case for Do Not Track. Jonathan Mayer, a computer scientist who teaches at Princeton University, describes it as “a failed experiment”. And Mayer should know. He and Arivind Narayanan, another computer scientist at Princeton, played an active and influential role in in getting Do Not Track up and running.

Why won’t websites comply with Do Not Track requests?

Again, the answer is simple – they have no incentive to do so. A telemarketer who calls a consumer who registered their phone number on the Do Not Call Registry can be be liable to that consumer for statutory damages of $500 for each unlawful call (or actual losses if greater) . They can also be sued by the Federal Trade Commission and state attorneys general.

But there are no laws or regulations hat require websites to honor Do Not Track requests. The browsing data websites can collect by tracking visitors across the web is valuable and provides an important revenue stream for many sites. We, as consumers, have no leverage. There are no market forces at play. Since virtually every website refuses to comply with Do Not Track requests, . we can’t take our business somewhere else. There’s no place else to go.

The most infuriating thing may be the reasons why many websites say they won’t honor Do Not Track requests. Many claim they won’t comply because there’s no accepted industry standard for how they should respond. If you think that explanation makes absolutely no sense, you’re not alone. Anyone who selects the Do Not Track option in their browser is sending a clear and unmistakable message to every website they visit – don’t track me. The fact that there’s no accepted industry standard doesn’t change the message.

As Kashmir Hill explains in her article “[i]t’s one thing to tell someone you want to be left alone, and another to get them to care.” It’s may be unrealistic and naive for us to expect websites and for-profit businesses to care about our privacy. But laws that make them financial liable to us will make them care about their own bottom line. The end result is the same.

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Independent Repairs Do Not Void Express Warranties

Fri, 12 Oct 2018 16:04:00 GMT

It’s inevitable. We buy a product that breaks or stops working right and needs to be repaired. If the product is inexpensive, it’s probably cheaper to throw it out and buy a new one. But that’s not the case when it comes to expensive items like cars, appliances and electronic devices. Fortunately, most expensive products come with written or express warranties that describe what repairs are covered, for how long and under what conditions.

An express warranty is a promise or statement made by a manufacturer about a product and its commitment to fix and repair the product when it’s defective or it malfunctions. Express warranties are governed by a federal law – the Magnuson-Moss Warrant Act . The Act does not require manufacturers to give express warranties on the products they sell. But if a manufacturer does offer an express warranty, it must comply with the law’s requirements.

One important provision of the Magnuson-Moss Act prohibits manufacturers from voiding express warranties if a consumer tries to repair the product themselves or has the repair work done by an independent repair shop. Another provision generally prohibits manufacturers from claiming they will void express warranties unless consumers use certain specified replacement parts or certain service providers (an exception applies if the replacement parts are free or the manufacturer obtains a waiver from the Federal Trade Commission). Statements made by manufacturers that don’t comply with the Act may be deceptive and therefore violate our consumer protection law.

The Magnuson-Moss Warranty Act has been around since 1975 and it should not be hard for companies to comply with its requirements. The FTC publishes guidance to help businesses avoid violating the law’s provisions. The FTC also issues warning letters to companies from time to time when it finds suspected violations. For example, this past April the FTC sent warning letters to Hyundai, Microsoft, Sony and Nintendo.

Despite the FTC’s guidance and oversight, the consumer advocacy group, US PIRG, found that an astonishingly high number of companies are nevertheless violating the Magnuson-Moss Warranty Act. PIRG conducted a survey 50 companies and found that 45 “had clauses in warranties which claimed that independent repair would void coverage, or their warranties were unclear and their customer service representatives stated that independent repair would void the warranty.” Do the math – PIRG found that 90% (90%!) of the surveyed companies were engaging in illegal activity.

The companies surveyed by PIRG weren’t exactly fly-by-night operations. The violators included well-known companies like Bisell, Breville, Dyson, Keurig, LG Electronics, Panasonic, Shark/Ninja, Sharp, Stanley Black and Decker, and Whirlpool.

The PIRG surveys shows that manufacturers routinely engage in illegal activity by claiming they will void warranties when they have no right to do so. If you’ve had problems with a manufacturer that refuses to honor an express warranty, please contact me. I can review your situation and see whether you have any recourse. There’s no charge for an initial consultation.

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Problems With Experian Credit Freeze PINs

Sat, 06 Oct 2018 13:29:00 GMT

The consumer advocacy organization, United States Public Interest Research Group (U.S. PIRG), has issued a press release advising consumers who placed credit freezes with Experian to change their PIN as soon as possible. The recommendation is based on the discovery of a security flaw in Experian’s online PIN retrieval page.

If you placed a credit freeze with Experian, the only way to change your PIN is to use your existing PIN to permanently remove the freeze, and then place a new freeze. You’ll then receive a new PIN from Experian.

You can remove your existing freeze by filling out this form on Experian’s website. Once that’s done, you can place a new freeze by filling out a different form .

U.S. PIRG also advises consumers to check their Experian credit reports to see whether a fraudulent account was opened. All Americans are entitled to one free credit report every 12 months from each of the three nationwide consumer reporting agencies, Experian, Equifax and TransUnion. The best way to do check your credit report is to apply online .

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FAQs on Credit Freezes

Thu, 04 Oct 2018 15:23:00 GMT

A recently-enacted federal law requires consumer reporting agencies to allow consumers freeze and unfreeze their credit reports without having to pay a fee. It also requires fraud alerts to last for a year.

Credit freezes, also called security freezes, prevent third parties from getting your credit file from consumer reporting agencies. Creditors generally won’t grant new credit unless and until they can check the applicant’s credit report. Freezing your credit should prevent – or at least make it more difficult – for identity thieves to open new credit cards or loans in your name

Not surprisingly, the new law has raised questions about its scope and requirements, prompting many consumers to contact the Federal Trade Commission looking for answers. In response, the FTC has a blog post entitled, “New Credit Law FAQs”, that provides answers to the most commonly-asked questions. You can access it here .

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Child Identity Theft is a Growing Problem

Mon, 01 Oct 2018 17:55:00 GMT

Identity theft is on the rise. While many people are aware they themselves are at risk, few parents realize that child identity theft is also a growing problem.

According to a report by Experian, the average identity theft victim is 12 years years old . The numbers are staggering. In 2017 alone, more than one million children became victims of child identity theft , costing their parents over $540 million in direct costs. One in four children will become identity theft victims before they become adults.

Children face the same consequences as adult identity theft victims. Thieves use their Social Security numbers and other personal information to apply for credit cards and loans, utility accounts and apartment leases in the child’s name. When those accounts are not paid, creditors and debt collectors come after the child, just as they would chase an adult to collect a delinquent account. Thieves may also use a child’s personal information to apply for government benefits or file fraudulent tax returns, creating more headaches for parents who have to deal with the consequences.

Why do identity thieves target children?

Simple – it takes a long time to detect. It will probably take months or even years for parents to discover that their child’s identity was stolen, longer than it would if they were the victim. Parents are not likely to detect the fraud until they get a bill in the mail or receive a telephone call from a creditor or debt collector. In the time before the fraud is detected, an identity thief can rack up thousands of dollars in charges in the child’s name.

Worse, the damage and problems done can take years to fix. According to Experian , it takes an average of three years to resolve the problems caused by child identity theft, and about one-quarter of victims are still dealing with the problems 10 years later.

How can parents detect child identity theft?

The best way is to check whether your children’s identity has been stolen is to to periodically get their credit report from each of the three nationwide consumer reporting agencies (Equifax, Experian and TransUnion). Under federal law, all Americans (including children) have the right to get one free credit report each hear from each of the three consumer reporting agencies (CRAs). You can do that online at this link . Just be careful not to get upsold on credit monitoring and other programs. Massachusetts residents are also allowed to bet another free credit report each year under our state law.

If your children have financial accounts, it’s also a good idea to monitor those accounts on a regular basis.

What’s the best way to prevent child identity theft?

In a word – credit freezes. You can prevent most types of child identity theft by placing a credit freeze with the three CRAs for each of your children. That should stop a thief from using your child’s personal information to apply for credit cards and loans in the child’s name. Under a recently-enacted federal law, freezing and unfreezing your and your children’s credit is free.

You should also be careful not to give your child’s Social Security number or other personal information to third parties except when it’s necessary to do so. And make sure to teach your children to do the same.

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Credit Freezes Are Now Free

Tue, 25 Sep 2018 16:03:00 GMT

Credit freezes are a good way to prevent identity theft . If an identity thief applies for a loan or credit card in your name, the bank or credit card company where they apply won’t be able to get your credit report if you have a freeze in place. There are very few lenders that will issue a loan or credit card unless and until they can review an applicant’s credit report .

A new federal law that allows consumers to freeze and unfreeze their credit file went into effect last Friday, September 21st. Under the previous law, consumer reporting agencies (CRAs) were allowed to charge consumers a fee for freezing and unfreezing their credit file. The new law eliminates those fees.

The new law also allows consumers to freeze and unfreeze credit files for their children or other dependents who are under age 16, as well as for adult family members who are incapacitated.

In addition to preventing identify theft, credit freezes provide consumers with a less obvious, indirect benefit. CRAs collect data on us without our consent and there are few restrictions on how they can use it. In other words, we’re not their customers. We’re their product. CRAs make money from selling our credit reports. But they can’t do so when there is a credit freeze in place.

For credit freezes to be effective, they have to be placed with each of the three nationwide consumer reporting agencies. If you place a freeze with only one agency, you run the risk that a lender will get your credit report from another agency where you haven’t placed a freeze.

You can request a freeze online, telephone or by mail. Below is the information you’ll need to do so.

Equifax

Website link: Equifax Freeze Page
Phone: (800) 685-1111
Mail: Equifax Security Freeze, P.O. Box 105788, Atlanta, Georgia 30348-5788

Experian

Website link: Experian
Phone: (888) 397-3742
Mail: Experian Security Freeze, P.O. Box 9554, Allen, TX 75013

TransUnion

Website link: TransUnion
By Phone: (888) 909-8872
By Mail: TransUnion LLC
P.O. Box 2000 Chester, PA 19016

If you want to place a credit freeze for your children or for someone other than yourself, you’ll have to submit certain documentation to the CRAs, such as a birth certificate, Social Security card or power of attorney. That can only be done by mail.

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Free Credit Freezes Begin September 21st

Tue, 18 Sep 2018 14:21:00 GMT

Identity theft is on the rise. According to Consumers Union , more than 8 million Americans are victimized by identity theft each year.

Credit freezes protect us from identity theft by restricting access to our credit reports . When you apply for a loan or credit card, the bank or credit card company you apply to will check your credit history to see how much other debt you owe and whether you have been paying your debts on time. The way they check is by pulling your credit report from one or more consumer reporting agencies (CRAs).

Placing a credit freeze with the CRAs makes it much harder for an identity thief to open a fraudulent account in your name. Bank and credit card companies won’t issue a loan or credit card if they can’t access the applicant’s credit report (at least in most circumstances).

Under existing law, you have to pay a fee to to each of the three nationwide CRAs (Equifax, Experian and TransUnion) if you wanted to place a freeze on your credit report. You were also required to pay an additional fee if you wanted to “unfreeze” your credit report at a later date. The cost for Massachusetts residents to both freeze and unfreeze their credit reports was $5.00 under the present law (there was no charge for identity theft victims).

But starting this Friday, September 21st, all US consumers will be able to freeze and unfreeze their credit reports for free under a new federal law that amends the Fair Credit Reporting Act.

The new law requires Equifax, Experian and TransUnion to each set up a webpage where consumers can request credit freezes. I strongly urge anyone reading this post to take advantage of the new law. It’s also a good idea to request credit freezes for your kids if they are minors.

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Problems With Prepaid Debit Cards

Mon, 17 Sep 2018 17:57:00 GMT

Prepaid debit cards can be a convenient way for people who have no credit history or poor credit to buy merchandise and pay for services . Consumers can apply for a prepaid card without having to go through a credit check and without having to open a bank account. Once the card is issued, the cardholder can deposit their paycheck, government benefits and tax refunds to their account, and then use the card the same way a credit card can be used. In fact, many prepaid debit cards operate on the Visa and MasterCard networks.

Prepaid debit cards can offer a number of advantages to consumers are “unbanked” or who have financial problems or poor credit. But there can also be disadvantages – like high fees and lack of access to deposited funds.

A 2016 FTC case illustrates how one company that offers prepaid debit cards deceptively advertised and marketed its cards to consumers.

According to the FTC , NetSpend marketed its prepaid debit cards to consumers who had financial problems and, as a result, could not open bank accounts or qualify for credit through banks and traditional lenders. Unfortunately for its customers, NetSpend made several misrepresentations in its advertising and marketing materials. It falsely told consumers that their approval was guaranteed; that they could use their cards immediately; and that they would be eligible for provisional credit when there was a dispute over the use of their card.

But according to the FTC’s complaint , approval was not guaranteed and could be contingent upon ” consumers meeting unexpected requirements.” And despite NetSpend’s claims, many consumers could not “use their cards immediately or access funds on their cards” for “prolonged periods of time—sometimes as much as weeks, or at all.” In other words, consumers were denied access to their own money. The FTC’s complaint alleges that these misrepresentations constitute deceptive acts or practices that violate the FTC Act.

In March 2017, NetSpend agreed to a consent order and permanent injunction that required the company to stop using certain deceptive marketing materials. The company also agreed to notify and provide refunds to eligible customers and to remit certain fees to the FTC. The FTC announced today that it’s mailing 430,000 checks totaling more than $10 million to eligible NetSpend customers.

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How Schools Violate FERPA

Fri, 14 Sep 2018 15:58:00 GMT

Passed in 1974, the Family Educational Rights and Privacy Act (FERPA) is a federal law that protects the privacy of student educational records . Any school that receives federal funds from the Department of Education (DOE) is subject to the law and must comply with its requirements and prohibitions.

FERPA applies to students who are both under and over age 18. When a student is under age 18, the rights extended by the law belong to the student’s parents. The rights then transfer to students when they reach age of 18.

The rights of parents and students under FERPA include such things as inspecting, reviewing and seeking to correct the student’s educational records. But the law also has affords important privacy protections. It prohibits schools from releasing protected student information to third parties without permission, except in certain limited circumstances.

Unfortunately, schools, teachers and administrators violate FERPA’s privacy protections without realizing they are doing so A recent article from EdSurge describes how these unintentional violations can occur.

You can read more about FERPA and another law that protects the privacy of children and students on my website here:

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Inaccurate Tenant Screening Reports

Wed, 12 Sep 2018 14:12:00 GMT

A class action complaint filed Monday in a Pennsylvania federal court illustrates how inaccurate tenant screening reports can harm consumers who apply to rent apartments. It’s also a reminder that we should periodically c heck our credit reports and dispute any errors they contain.

The lead plaintiff in the case applied to rent an apartment at a complex in Philadelphia. As part of the application review process, the landlord obtained a tenant screening report from TransUnion Resident Screening Solutions, Inc. (TURSS). TURSS is a wholly-owned subsidiary of TransUnion, LLC, which, along with Equifax and Experian, is one of the three nationwide consumer reporting agencies.

According to the plaintiff, the landlord denied her application because the tenant screening report it obtained from TURSS contained inaccurate information relating to prior eviction cases against the plaintiff. The plaintiff is now suing TURSS and its parent company, TransUnion.

Consumer reporting agencies like TransUnion create credit reports on consumers by aggregating information obtained from several sources, including public records. Specialty consumer reporting agencies like TURSS compile and maintain files on certain types of information; specifically, consumer tenant histories, medical records and payments, employment histories, insurance claims and check-writing histories. It’s common for landlords to obtain tenant screening reports when reviewing rental applications.

According to the complaint, TURSS buys information on prior eviction cases from private vendors, instead of getting the information directly from court records. Landlords are understandably concerned that prospective tenants don’t have a history of not paying rent. That’s why they get tenant screening reports. On the other hand, tenants should be concerned that the information in those reports is accurate.

Here, the plaintiff claims that the information TURSS sells to landlords is often inaccurate or incomplete because because it’s not up-to-date. Eviction complaints filed against tenants are sometimes dismissed, withdrawn or result in judgments in favor of the tenant. But according to the plaintiff, TURSS makes no attempt to update the information it buys even though the records needed to do so are publicly available online. Therefore, the tenant screening reports prepared by TURSS are often inaccurate and misleading because they don’t describe how eviction cases were ultimately resolved.

The complaint alleges that TURSS violated the Fair Credit Reporting Act (FCRA) by failing to “follow reasonable procedures to assure maximum accuracy of eviction information
contained in tenant screening reports” concerning plaintiff and the other class members.

The plaintiff also claims she requested a copy of her credit report from TransUnion after her rental application was denied. But when she received the report, it did not include the same eviction information that was included in the report obtained by the landlord from TURSS. If true, this would be a separate violation of the FCRA.

To be clear, the facts described in the complaint are only allegations at this point. If the case isn’t settled, the plaintiff will need to prove those allegations to prevail.

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FTC Bans Phantom Debt Collection Companies

Tue, 11 Sep 2018 16:00:00 GMT

Phantom debt collection is a scam that comes in several variations. But each variation has a common element – pressuring people into paying debts they don’t owe or that the debt collector has no legal right to collect .

Using threats and intimidation to collect a debt is a violation of the Fair Debt Collection Practices Act (FDCPA) and the Massachusetts Consumer Protection Law (General Laws Chapter 93A). Any debt collector who violates the FDCPA or Chapter 93A and who is successfully sued can be ordered to pay money damages to the person who files the lawsuit. There is little doubt that trying to collect a debt that isn’t owed or which the debt collector has no right to collect is an unfair or deceptive practice under both federal and state law.

The Federal Trade Commission (FTC) recently obtained court orders permanently banning 13 Georgia-based companies and their principals from the debt collection business. The case is a good example of the kind of illegal practices used by debt buyers who try to collect phantom debts. According to the FTC , the defendants falsely told people they had committed a crime by not paying a phantom debt; that they would to jail if the debt wasn’t paid; and that they would also be sued and have their wages garnished. The threats worked and many people paid debts they didn’t owe. In some cases, the debt was never owed or had already been paid. In other cases, the defendants did not own the debt and therefore had no legal right to collect it.

Below are the names of the corporate defendants named in the FTC’s complaint:

Phantom debt collection is a growing problem. If you paid a debt to any of these companies, you might be entitled to receive compensation from the FTC. Contact the FTC or my office if you have any questions.

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Student Loans and Servicing Nightmares

Fri, 31 Aug 2018 17:17:00 GMT

You’re not alone if you’ve had problems with the companies that service your student loans. While it’s probably no consolation, consider the nightmare one borrower had to endure when her student loan servicer made a series of inexplicable and inexcusable mistakes. Those mistakes and the problems they caused are described in excruciating detail in a recent Mother Jones article .

The story centers on Leigh McIlvaine, who borrowed almost $70,000 to get her master’s degree in urban and regional planning. After graduating, she found a job at a non-profit in Washington, DC. But with monthly loan payments of about $850, McIlvaine had barely enough of her $46,000 salary left over to pay rent and living expenses. Still, she was happy to have a job doing what she wanted to do. That was the reason she invested in her education.

After making payments for a few years, things began to look up for McIlvaine when she learned about the Public Service Loan Forgiveness Program (PSLF). The program was signed into law in 2007 with bipartisan support. The purpose of the PSLF is to give relief to borrowers with federal student loans who work in public service jobs where salaries are traditionally lower than in the private sector . Qualifying borrowers with public service jobs can get the remaining balance of their student loans forgiven after they make on-time payments for 10 years (120 months). They can also get their monthly loan payments lowered to an amount based on their income and family size (called an income-based repayment program).

McIlvaine was eligible for the PSLF because she worked for a non-profit company. So she enrolled, paid her loans on time, and sent the required tax forms in each year to confirm her eligibility. Things went smoothly for a few years. But in 2012, the Dept. of Education (DOE) hired FedLoan Servicing to service the student loans for those borrowers who were participating in the PSLF (FedLoan is the d/b/a for the Pennsylvania Higher Education Assistance Agency). That’s when McIlvaine’s nightmares began.

Here are some of the mistakes made by FedLoan, as described by Mother Jones:

FedLoan’s mistakes had real world consequences for McIlvaine. Her student loans should be eligible for forgiveness in 2020. But because she didn’t receive credit for payments when FedLoan wrongfully put her loans in forbearance, she’ll have to make payments for at least an additional year.

The Massachusetts Attorney General filed a complaint against Fed Loan in August 2017. You can read the complaint here .

These types of problems are common with companies that service student loans. Servicing is a high volume, low profit business. Loan servicing companies often cut corners by automating processes. The result is poor customer service.

If you are having problems with the company servicing your student loans, you may have legal remedies. Please contact me. I can review your situation and let you what options are available.

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Student Loan Ombudsman Resigns in Protest

Mon, 27 Aug 2018 21:01:00 GMT

The Consumer Financial Protection Bureau (CFPB) is the federal agency in charge of overseeing student loans and the companies that make them. You probably know that the CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010. The law was enacted as a response to the 2008 financial crisis.

Dodd-Frank also created a Student Loan Ombudsman within the CFPB. The Ombudsman is the official inside the CFPB who is effectively in charge of protecting student loan borrowers from predatory lending practices.

Seth Frotman has served as the CFPB’s the Student Loan Ombudsman for the past 3 years. At least he did until today. Frotman has tendered a letter of resignation to the CFPB’s Acting Director, Mick Mulvaney. It includes a description of his reasons for resigning. Frotman has essentially accused Mulvaney of undermining the Bureau’s duty to protect student loan borrowers.

NPR obtained Frotman’s letter and posted a copy on its website . In the accompanying article , NPR describes Frotman’s letter as “scathing.” It’s hard not to agree with that description. Some notable excerpts:

Frotman’s resignation is obviously bad news for anyone who has student loans.

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Guidance on Taking a Reverse Mortgage

Fri, 24 Aug 2018 16:31:00 GMT

The Consumer Financial Protection Bureau has some good information on its website for homeowners who might be interested in taking out a reverse mortgage loan. But they’re not the right choice for everyone. If a reverse mortgage is something you’re considering, you need to proceed with caution. There are potential pitfalls you need to be aware of and understand. General information is helpful, but everyone’s situation unique.

Consulting with a knowledgeable attorney before taking out a reverse mortgage can help you make the right decision and choose the options that best meet your needs. For example, if you’re married, you need to decide whether to apply jointly with your spouse. You might also have cheaper options, such as refinancing your existing mortgage loan for more than you currently owe or taking out a home equity loan. If you to take out a reverse mortgage, you will have to choose whether to receive funds through a lump sum payment, a line of credit or a monthly payout.

But let’s start with the basics.

What is a reverse mortgage loan?

A reverse mortgage (also called a Home Equity Conversion Mortgage) is a special type of mortgage loan for homeowners who are at least 62 years old. It allows eligible homeowners to borrow money against the equity in their home (your equity is the difference between the amount you owe on an existing mortgage loan, if any, and the value of your home) and pledge the property as security. But unlike a traditional mortgage, a reverse mortgage does not require monthly payments. In fact, you don’t have to repay the loan until you sell the home or decide to move out. The loan also has to repaid when you die, unless you’re survived by an eligible spouse or a co-borrower (see below).

For some older homeowners, selling their home might be the best option. Some people have large homes and want to downsize. Others may want to move to a different area.

But if you want to stay in your home, taking out a reverse mortgage loan allows you to access the equity without having to sell the property. This can be a good option if you have built up substantial equity in your home, but don’t have enough retirement income or assets to pay your living expenses.

Important issues to keep in mind

There are a lot issues to consider and a number of options to choose from. If you’re thinking about taking out reverse mortgage, please contact me. I can help you make the right decision.

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Facebook Uses Dark Patterns to Manipulate Users

Thu, 23 Aug 2018 16:10:00 GMT

A recent report from the Norwegian Consumer Council entitled “Deceived by Design” describes how Facebook uses “dark patterns” to manipulate users into sharing data. The term “dark patterns” was coined by researcher Harry Brignull who describes them as “tricks used in websites and apps that make you buy or sign up for things that you didn’t mean to.”

According to the Norwegian Council, Facebook uses a number of different dark patterns to “nudge” users into choosing (or not changing) privacy-intrusive options.

For anyone interested, darkpatterns.org has a list of the different types of dark patterns used by apps and websites to manipulate and nudge consumers.

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HUD Accuses Facebook of Housing Discrimination

Wed, 22 Aug 2018 15:05:00 GMT

The US Department of Housing and Urban Development (HUD) has accused Facebook of housing discrimination. HUD’s administrative complain t, filed last week, alleges that the social media company allowed landlords to use its advertising tools to discriminate against tenants based on their race, gender, national origin or disability. The allegations, if proven, would be violations of the Fair Housing Act, a federal law that prohibits landlords and real estate sellers from discriminating against anyone who is a member of a “protected class” .

To be clear, the complaint doesn’t charge Facebook with discrimination. Rather, it claims that the company “unlawfully discriminates by enabling advertisers to restrict which Facebook users receive housing-related ads” based their status as a member of a protected class” (emphasis mine).

The Complaint is significant because of its underlying premise: that Facebook should be held legally responsible for discrimination committed by businesses and people who advertise on Facebook (in this case, landlords). Facebook typically tries to avoid responsibility for content by shifting blame to its users and advertisers. But according to Anna María Farías , HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, “[w]hen Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it’s the same as slamming the door in someone’s face.”

It should come as no surprise that Facebook collects massive amounts of data on people who have Facebook accounts. The company combines that data with data purchased from other sources to create profiles of its users.

Businesses who want to advertise on Facebook can use its advertising tools to choose the audience who will see their ads. There’s nothing illegal about targeting ads for certain products and services to certain groups of people. But landlords and employers can use the same tools to make sure their ads are not shown to certain audiences based on their gender, age, nationality, ethnicity and other factors. In other words, they can use Facebook’s ad tools to discriminate.

HUD’s press release describes the ways Facebook can be used to discriminate against protected classes by allowing advertisers to:

If you believe you were turned down for an apartment based on your age, gender, race or disability – or discriminated against in any way – please contact me. You may have recourse.

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FTC Shuts Down Revenge Porn Site

Tue, 21 Aug 2018 16:59:00 GMT

Last week the Federal Trade Commission (FTC) obtained a permanent injunction from a Nevada federal court that permanently shuts down MyEx.com, a website devoted to revenge porn. The court also entered a default judgment against the owners of the site, EMP Media, Inc., and Shad Applegate, also known as Shad Cotelli. The defendants are required to pay more than $2 million to the FTC. They also have to permanently delete all of the intimate photos and personal information that had been uploaded to the site.

“Revenge porn” is a term used to describe the “disclosure of sexually explicit images of an individual without their consent” (other terms include “non-consensual pornography” and “non-consensual image-sharing”). Revenge porn includes photos taken or obtained without the victim’s consent. It also includes photos obtained with consent but then published or distributed without the victim’s consent.

According to the FTC’s complaint, MyEx.com marketed the site as a way for people to get revenge on their former spouses and partners. The site encouraged people to upload intimate photos and videos of their former spouses and partners, together with other personal information, such as the victim’s name, age, address, employer, phone number, social media account information, and email address.

MyEx.com’ “business plan” was hardly a secret. The site included statements in its ads like “MyEx GET REVENGE!”, “Naked Pics of Your Ex” and “Get the dirt before you get hurt or submit your ex gf and bf and get revenge!” Of course, the name itself is a dead giveaway.

Once photos were uploaded to MyEx.Com, they were publicly available and viewable by anyone, including the victim’s family, friends, co-workers and employers. Since the victim’s photos were associated with their real name, their social media account and other personally-identifiable information, the photos could also be found through a search for the victim’s name in Google or other search engines.

Many victims didn’t find out that their photos and personal information had been posted on MyEx.com until they were contacted by strangers through text messages, emails, or social media.

While MyEx.com may have been about revenge for the people who posted photos on the site, it was all about money to the defendants. Victims who contacted the site and asked for their photos to be taken down were asked to pay anywhere from $499 to $2,800. In some cases, the site requested recurring payments.

Revenge porn can cause immediate, devastating and irreversible harm to its victims. Some have lost jobs. Others have been harassed by strangers on social medial or subjected to threatening phone calls and lewd comments about their bodies and alleged promiscuity.

Almost all victims live in fear that future employers or spouses will find their photos through search engines. The fear of future harm is real and shouldn’t be underestimated. It can lead to depression and anxiety which causes economic harm in the form medical expenses, prescriptions and mental health care. Victims who try to get information removed from revenge porn sites – or who seek relief from harassment – have to hire lawyers and pay legal fees. They also have to spend substantial time working with law enforcement.

Revenge porn is unfortunately on the rise. In a recent study, 4% of the participants told researchers that another person had posted or threatened to post “sexually-explicit images of them without their consent.”

If someone has posted or has threatened to post intimate photos, videos or images of you online, you have legal remedies. Don’t hesitate to contact my office if this has happened to you. There’s no fee for an initial consultation.

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First Circuit Rules That Uber Arbitration Clause Is Not Enforceable

Fri, 17 Aug 2018 17:00:00 GMT

The First Circuit Court of Appeals has ruled that Uber cannot enforce an arbitration clause appearing in its online terms of service.

The case involves a class action originally filed against Uber by four consumers who had downloaded the Uber app to their smartphones between December 31, 2012 and January 10, 2014 . Their complaint alleged that Uber violated our consumer protection statute, Mass. General Laws Chapter 93A, by charging riders “fictitious or inflated fees”. The fees involved additional surcharges and tolls for trips to Logan Airport.

Uber convinced the federal trial court in Boston to dismiss the case on grounds that the plaintiffs had agreed to arbitrate their claims against Uber, and therefore had no right to file a complaint in court. The plaintiffs appealed that ruling. The First Circuit agreed with the plaintiffs. It overruled the lower court, holding that the plaintiffs had never agreed to arbitration.

The case is a significant victory for consumers for two reasons. First, the court noted that the Federal Arbitration Act “does not require parties to arbitrate when they have not agreed to do so.” Here, Uber did not claim that the Plaintiffs saw or read its arbitration clause. The terms were buried in Uber’s “Terms of Service & Privacy Policy.” To access these policies, the plaintiffs had to click a button at the bottom of the screen displayed on their phones. Not surprisingly, none of them did. The court ruled that the links to Uber’s policies were not “reasonably communicated” to Uber’s customers because of the way the links were displayed. Stated differently, the plaintiffs “were not reasonably notified of the terms of the [arbitration clause]. Since the plaintiffs did not agree to submit their claims to arbitration, they were free to file a court complaint against Uber.

Second, and perhaps more importantly, are the reasons why the court ruled that the plaintiffs did not receive sufficient notice of the arbitration terms. Instead of requiring the plaintiffs to click a box stating hey agreed to arbitration, Uber simply included a link to its policies at the bottom of the users’ screens. The court also gocused on the way the links were displayed on the plaintiffs’ phones. Instead of appearing in underlined text in a different color font, as links commonly do, they were displayed in a gray rectangular box in white bold text. The court also noted the presence of other terms on the same screen and the comparative size of the fonts.

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Credit Freezes Are Free Beginning Sept. 21st

Thu, 16 Aug 2018 17:37:00 GMT

Beginning September 21st, a new federal law allows consumers to place free credit freezes with each of the three nationwide consumer reporting agencies (Equifax, Experian and TransUnion).

The new law should help prevent identity theft. Credit freezes prevent third parties from getting a copy of your credit report from one of the consumer reporting agencies (CRAs). Banks and credit card companies pull your credit report when you apply for credit. If they can’t access your credit report, they won’t give you a loan or a credit card. That should prevent an identity thief from applying for credit in your name.

Credit freezes are the most effective way of preventing identity theft. The downside? You’ll need to unfreeze your credit if you apply for a loan or credit card. The same will probably apply if you apply for job or lease. But there’s also good news. The new law prevents the CRAs from charging you to lift a credit freeze. They also have to act quickly. If you apply for credit and ask for the freeze to be lifted, the CRAs must do so within one hour.

If someone steals your identity, you should file a report with the Federal Trade Commission (FTC) as soon as possible. The link for filing report is here . The FTC will use the information you provide to give you a personalized recovery plan. You should also file a report with your local police department.

If an identity thief does get credit in your name, you should contact the bank or business that issued the credit. Federal law requires businesses to provide identity theft victims with a copies of the records relating to the theft, for free and within 30 days. These records are important. Not surprisingly, identify thieves who get loans and credit cards in someone else’s name don’t pay them. You may need the records if you’re sued by the creditor that issued the loan or credit card.

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Tech Companies Manipulate Children Through Persuasive Design

Fri, 10 Aug 2018 19:15:00 GMT

In a recent letter to the American Psychological Association (APA), a group of distinguished psychologists accused the tech industry of using “persuasive design” to manipulate children into overusing their smartphones, social media and video games. Persuasive design, also called persuasive technology or behavior design, is a technique that can be used in the creation and design of digital devices and apps. Its purpose is to encourage children (and for that matter, adults) to stay on their devices for extended periods of time. The increased screen-time profits social media companies and app developers because it allows them to show more ads. Not surprisingly, few children or parents realize the children are being manipulated.

Persuasive design leads to the overuse of digital devices because that’s what it’s designed to do. While it can be used in a positive way, it also creates health risks and can lead to addiction. Existing research supports a connection between the use of this addictive technique and mental health problems (e.g., depression and suicide ) and poor academic performance in children. Persuasive design also preys on children who have developmental disorders and addictive tendencies.

An article in Medium describes the experience of a family whose daughter, Kelly, became addicted to her smartphone. Here’s how Kelly’s parents described the addiction to her psychologist, who wrote the article:

Kelly’s parents spoke first. They said that their daughter’s hospitalization was the culmination of a yearlong downward spiral spurred by her phone obsession. Kelly had been refusing to spend time with her family or focus on school. Instead, she favored living her life on social media. A previously happy girl and strong student, Kelly had grown angry, sullen, and was now bringing home report cards with sinking grades. Kelly’s parents had tried many times in prior months to
set limits on their daughter’s phone use, but she had become increasingly defiant and deceitful, even sneaking on her phone at all hours of the night.

When the psychologist asked Kelly to explain what happened, she didn’t say anything at first. She just glared at her parents. But then Kelly suddenly blurted out: “They took my f***ing phone!” When the psychologist asked Kelly why she liked her phone and social media so much, she said, “They make me happy.”

The letter to the APA accuses psychologists employed by the tech industry of using persuasive design to increase children’s “screen-time” and calls the practice “unethical”. It points out that the the APA has an obligation to protect children and their families from practices that cause harmful psychological effects. The letter asks the organization to make a statement on the issue.

For tech companies, more screen-time means more ads and more profit. But addiction to social media and digital devices is a real-life problem for children and their parents. And there’s also the angers stemming from collecting data on children who are too young to understand how it could harm then in the future.

If you have a child who is addicted to their phone, social media or video games, consider taking a stand and doing something about it. I would welcome the chance to discuss the situation with you.

You can find more information about protecting children from addictive and manipulative technology on the website for the Campaign For a Commercial-Free Childhood , which is based in Boston.

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FTC Shuts Down Business Opportunity Scam

Mon, 06 Aug 2018 17:59:00 GMT

The Federal Trade Commission has charged Sellers Playbook, Inc., a related company and two individuals with running a business opportunity scam. According to the complaint, the scam violated two consumer protection laws – the Business Opportunity Rule and the Consumer Review Fairness Act (CRFA). Conduct that violates either law is an unfair or deceptive act that also violates the FTC Act and the M assachusetts consumer protection statute .

The defendants in this case promoted their business opportunity scam under several names – Sellers Playbook, Sellers Online, and Sellers Systems . They described the scheme as a “comprehensive program” to assist purchasers in launching and growing a new online business selling products as a third-party seller on Amazon.com.” Consumers who signed up paid anywhere from $497 to $30,000, depending on the particular package or level of enrollment they chose.

Any consumer who signed up also had to sign a form contract with a “non-disparagement” clause. These terms prohibited consumers from posting or publishing negative reviews, assessments or criticism about the system – exactly what the CRFA was designed to protect against. This is the first case the FTC has brought for violations of the recently-enacted CRFA . The Act outlaws form contracts between businesses and consumers that contain terms prohibiting people from publishing or posting negative reviews about a product or service and/or attempting to impose fees or penalties on anyone who does so.

To make matters worse, the individual defendants were repeat offenders . This past March the FTC charged them being involved in a nearly identical get-rich-quick scheme that operated under a different business name (FBA Stores). In that case, a federal court in Nevada issued a preliminary injunction shutting down the operation.

The complaint against Sellers Playbook is another attempt by the FTC to to crack down on violations of the Business Opportunity Rule. These cases have a lot of similarities. They typically include some variation of the following:

If you were the victim of a business opportunity scam and didn’t get the results you were promised, please contact me. You may be able to recover the amount you paid, as well as your legal fees and expenses.

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DOE Weakens Borrower Defense Rule

Fri, 27 Jul 2018 13:21:00 GMT

Yesterday the Department of Education (DOE) issued new regulations that significantly weaken the existing borrower defense rule. The borrower defense rule, which went into effect in 2016, gave students who were victimized and defrauded by predatory for-profit colleges (including Corinthian Colleges and ITT Educational Services ) a way to get their student loans discharged under certain circumstances.

The new, rewritten rules make it harder for defrauded students to get relief from their student loans and easier for the schools to avoid paying student claims. The changes include forcing students to arbitrate their claims (i.e., denying them the right to file lawsuits in courts), prohibiting students who file for arbitration from discussing their arbitration proceedings with other students and denying them the right to join in class actions with other students.

The Century Foundation has an excellent article describing several ways the new rules harm students who took out student loans to pay for predatory for-profit colleges:

Although the new DOE rules make it harder to get student loans discharged, students who attended for-profit schools may still have claims against their school for violating our consumer protection laws. Many of these schools made false and deceptive promises about the quality of their programs and the ability of students to get jobs in their field of study .

If you attended a for-profit college or are struggling to pay your student loans, I may be able to help. Please contact me. There’s no charge for an initial consultation.

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Free Trial Offers Are Often Scams

Tue, 24 Jul 2018 21:28:00 GMT

“Free” is one of the most powerful words in advertising . Businesses know that, of course. So may of them promise free trial offers and money-back” guarantees to attract potential customers. All you have to do is pay a small “shipping and handling fee” and the product is yours.

Some of these risk-free trial offers and money-back guarantees are legitimate. But many of them are scams that violate federal and state consumer protection laws.

A recent FTC case provides a good example of free trial offers that result in consumers getting charged for products they don’t want without their consent. The defendants in that case (several related companies) advertised, marketed and sold skin care products and dietary supplements through ads they placed on other websites. The ads offered consumers a free trial of a product in return for paying the cost of shipping and handling. Consumers who clicked on the ads were directed to websites owned by the defendants. Anyone interested in the free trial offer had to enter their contact information and billing information, and then click a box that said, “Get My Risk Free Trial” or “Continue”.

The people who accepted the free trial offer thought they were trying out a product for a nominal payment of less than $5.00. But 15 days after they clicked the box and accepted the “free” trial offer, the defendants billed their credit card for the full price of the product – as much as $98.71. Even worse, the defendants enrolled these unfortunate consumers in a “continuity program”. Under the terms of this program, the defendants sent them additional shipments each month and charged them for the full price of the shipped products.

The defendants hid the actual terms of the offer by placing them in small print far below the boxes where consumers entered their contact and payment information or in separate “Terms & Conditions” that could accessed only by clicking on a link. Those terms stated that consumers had a limited time to cancel the trial (usually 15 days) or they would be charged the full price of the product and the additional monthly shipments. Many of the people who tried to cancel the shipments and get a refund were not able to do so.

The continuity program described above is known as “negative option marketing”. It’s prohibited by a federal law – the Restore Online Shopper’s Confidence Act or ROSCA, for short – unless the business making the offer complies with the law’s provisions . Specifically, ROSCA requires businesses that make negative option offers to: 1) clearly disclose all of the material terms before they charge consumers’ credit cards; 2) get their express informed consent before making a charge; and 3) provide a simple way for consumers to stop future recurring charges to their credit card.

The FTC’s complaint makes it clear that the defendants failed to comply with ROSCA and that their ads were deceptive. Fortunately, a California federal court agreed with the FTC and granted its request for a preliminary injunction. The injunction temporarily halts the operation and freezes the defendants’ assets pending further litigation

It’s easy to believe this would never happen to us. But according to the FTC, the defendants made tens of millions of dollars from consumers who no doubt felt the same way. Be careful in deciding whether to provide your billing information in connection with a free trial offer.

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Beware of Home-Based Business Systems

Mon, 16 Jul 2018 15:30:00 GMT

You’ve no doubt heard the old adage, “if it sounds too good to be true, it probably is.” That’s a good thought to keep in mind when it comes to ads for home-based business systems.

The Federal Trade Commission recently charged several defendants with deceptively claiming consumers could earn substantial income by purchasing and subscribing to their online business coaching programs . The defendants advertised and marketed the programs on websites and social media platforms , including Facebook and Instagram.

According to the FTC, the defendants falsely promised consumers they could quickly earn large sums of money by operating their own business online. For example, the ads included a promise that consumers could “make six figures online in the next ninety days or less ” and a claim that the programs and systems were “developed by 7-figure digital marketers, for digital marketers.”

The ads directed consumers to a website controlled by one of the defendants. Once on the site, consumers were asked to enter an email address to obtain more information. They were then directed to a video message in which one of the defendants repeated the promise of making six figures in 90 days or less. in the video, the defendant explained that consumers would be able to make that much money because he would give them his own “million dollar business” if they subscribed.

The defendants then sent follow-up emails to consumers who provided their email address. These emails repeated the same promises to any consumer who subscribed to the defendants’ home-based business systems. For example, one email stated: “The ASPIRE program has been tested and proven by tens-of-thousands of people. The 18 steps WORK. You just have to follow them. Step 1 lays the foundation for you to build a 6-Figure digital business in 90 days… even if you’re starting from scratch.”

Consumers who paid the subscription fee received a series of training videos, some documents and a promise they would receive business coaching from a mentor. But the videos provided little if any training. Their real purpose was to convince consumers to buy higher-tier memberships at a higher cost. And the so-called “business coach” was actually a salesperson on commission.

Not surprisingly, few consumers earned substantial income, if they earned any income at all. While the FTC’s case is still pending against some of the defendants, several have agreed to preliminary injunctions that prohibit them from deceptively marketing and selling business coaching schemes.

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FTC Charges Two Companies With Collecting Phantom Debts

Wed, 27 Jun 2018 19:47:00 GMT

The Federal Trade Commission (FTC) and the New York Attorney General have filed a complaint charging two companies and their owners with collecting phantom debts that were not owed by consumers.

The complaint describes a type of fraud that’s common in the debt collection industry. Phantom debt collection is “the practice of pressuring people to pay debts they don’t owe.” If a debt collector contacts you about a debt you don’t recognize, never assume you owe it and don’t make payments until you’re sure you do. The debt collector may have received information that incorrectly identifies you as the debtor. Or the debt may have been fabricated by a scam artist who had your bank account and Social Security numbers. Some scammers aggregate phantom debts into a portfolio and then sell the portfolio to debt buyers who then try to collect the debts.

The FTC’s complaint charges one defendant , Hylan Asset Management, LLC, with buying, selling and placing “phantom debts” for collection with several different debt collection agencies. According to the FTC, Hylan knew these debts were fake because it bought many of them from two individuals the FTC had previously banned from the business of debt collection. Despite this knowledge, Hylan continued to buy phantom debts from these two individuals and then place them for collection. In doing so, Hylan provided the debt collection agencies with the “means and instrumentalities” to collect phantom debts.

The FTC also charged one of the debt collection agencies, Worldwide Processing Group, LLC, with collecting phantom debts it received from Hylan. According to the FTC, World Processing knew or should have known these debts were not owed, but still tried to collect them from consumers. Worldwide also engaged in other unlawful debt collection practices, including threatening and harassing consumers’ friends and family members and failing to provide consumers with certain statutorily-required notices describing how they could dispute the debts.

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Facebook and Privacy: A Race to the Bottom

Wed, 20 Jun 2018 14:37:00 GMT

“No other single company has done more to erode consumer privacy than Facebook.” Those words were written by Ashkan Soltani , a former Chief Technology Officer (CTO) for the Federal Trade Commission (FTC). He should know.

Soltani is intimately familiar with Facebook’s privacy practices. In 2011, Facebook agreed to a Consent Order with the FTC in connection with its complaint against Facebook for violating user privacy. Soltani was the FTC’s CTO at that time.

Yesterday, Soltani testified at a hearing held by the U.S. Senate Committee on Commerce, Science and Transportation; more specifically, its Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security. The hearing was entitled, “Cambridge Analytica and Other Facebook Partners: Examining Data Privacy Risks.” The hearing was held to follow-up on Facebook CEO Mark Zuckerberg’s earlier testimony so the Committee would be able to “focus on the collection and use of social media data, the privacy concerns raised in the wake of the Cambridge Analytica/Facebook scandal, and potential steps to protect consumers.”

Soltani’s written testimony to the Committee makes some troubling points about online privacy in general and Facebook in particular. Among those points:

What’s the solution? Soltani’s suggests new federal regulations designed to protect online privacy. In his words, “[t]he government must take meaningful action to prevent Facebook and other Internet giants from causing lasting harm to American discourse and democracy.” To have the desired effect, privacy legislation will need to “address many of the key problems facing consumers online: lack of meaningful consent, inadequate data security practices, and a lack of any real transparency from large online companies.”

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FTC Settles Student Loan Debt Relief Scam

Mon, 18 Jun 2018 18:56:00 GMT

The Federal Trade Commission (FTC) recently reached settlements with two companies it accused of offering unlawful student loan debt relief services. These companies conducted business under several names, including StuDebt, Student Debt Relief Group, SDRG, Student Loan Relief Counselors, SLRC, and Capital Advocates Group. Contact me if you have student loans and paid money to any of these companies. You might able to recover some of what you paid.

The defendants named in the FTC’s complaint marketed their student loan debt relief scam through an aggressive telemarketing campaign that included calls to consumers who had listed their telephone numbers on the national Do Not Call Registry. The defendants used a number of techniques to mislead student loan borrowers into believing the defendants worked with the US Department of Education (DOE) and could help them enroll in programs that would lower their monthly loan payments. For example, the defendants’ telemarketers told borrowers that they “work on behalf of the government,” that they were a DOE “partner” or that “they represent [DOE} in assisting students.” To compound the fraud and further mislead consumers, the defendants used email addresses that ended in “.us.”

According to the FTC, The defendants told some consumers they were eligible or “preapproved” for a government student loan “forgiveness” program that would lower their monthly loan payments by hundreds of dollars. They also falsely promised consumers that their monthly payments would remain at the reduced amount for up to 20 years, at which time the remaining balance would be forgiven.

In exchange for these fraudulent promises, the defendants required consumers to pay advance fees that exceeded $1,000 in some cases. That’s illegal. The FTC’s Telemarketing Sales Rule prohibits telemarketers from collecting up-front fees for debt relief services.

The defendants also told borrowers they would be servicing their student loans in the future and required them to pay recurring monthly fees for that service. They led borrowers to believe these monthly fees would be applied to their student loans. In fact, the defendants kept the fees in many cases. To cover their tracks, they instructed borrowers not to communicate with their real loan servicers.

If you have federal student loans, you may be eligible for programs that can reduce your monthly payments depending on your income. There are other programs that forgive your remaining loan balance after you’ve made 120 qualifying payments while working full-time for a qualifying public service employer. You can apply for these programs yourself and the DOE does not charge you to apply. Under no circumstances should you pay fees to a company that offers debt relief services unless and until it has: 1) negotiated a settlement or modification of the terms of your loan; 2) you have made at least one payment in connection with the settlement; and 3) the fees are reasonable in proportion to the terms of the settlement.

Federal debt relief programs have strict eligibility requirements. Unfortunately, many people who have federal student loans don’t qualify. Anyone who guarantees that you qualify for a federal debt relief program, or asks you to pay advance fees for student loan debt relief, is probably running a scam.

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Some Surprising Ways Facebook Tracks Users

Thu, 14 Jun 2018 13:59:00 GMT

You would have to be living under a rock to not know Facebook collects boatloads of data on people who have Facebook accounts. But few people understand Facebook’s data collection practices and how the company tracks them while they’re on logged into Facebook or just browsing the web.

The privacy blog PogoWasRight.org has a link to a Daily Mail article listing “18 things you may not realise Facebook knows about you.” The newspaper compiled the list from reports created by the social media platform in response to CEO Mark Zuckerberg’s recent Congressional testimony concerning the Cambridge Analytica scandal. You may be surprised to learn Facebook tracks things like your mouse movements while you’re logged into Facebook, what plugins you have installed and your device’s battery level.

Below are the 18 “creepy” things Facebook admits to collecting from its users:

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Refunds for Business Coaching Scam

Tue, 12 Jun 2018 17:48:00 GMT

Did you pay money for a business coaching scam to a company doing business as the Internet Teaching and Training Specialists, LLC (ITT)? If so, you may be entitled to receive a refund check for $266.78 from the Federal Trade Commission (FTC).

ITT sold business coaching services through another company, Guidance Interactive. In December 2017, The FTC filed a complaint against ITT and the individuals who controlled the company. The complaint alleges that the company falsely promised it would allow subscribing consumers to develop a profitable online business. In fact, most of the people who paid ITT for its business coaching services lost money.

ITT reached a settlement with the FTC in January. Under the terms of the settlement, ITT is banned from selling business coaching services and business opportunities in the future. The company also agreed to pay $969,000 to the FTC as a civil penalty. The FTC is now distributing that money to consumers who were victims of the scam.

The FTC is reminding consumers who receive checks that they should cash them within 60 days.

If you want more information about the FTC’s refund programs, you can find it here, or contact my office.

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Facebook Overrides User Privacy Choices

Fri, 08 Jun 2018 16:00:00 GMT

One of Facebook’s new slogans is “People First ”. Unfortunately, that sentiment doesn’t seem to apply to users’ privacy choices.

In an earlier blog post, I wrote that when Facebook’s CEO, Mark Zuckerberg testified before Congress, he “forgot” to mention Facebook’s then-secret data-sharing partnerships with at least 60 other tech companies. Predictably, Facebook also “forgot” to mention these partnerships when it “apologized” (sort of) for breaching the trust of its users in full page ads the company placed in several newspapers shortly after Zuckerberg appeared before Congress.

Through these data-sharing agreements, Facebook gave mobile phone and other device makers (like Apple and Samsung) access to vast amounts of personal information on its own users. In doing so, Facebook also ignored its users’ privacy choices. The company not only breached their trust, but its own Data Policy, as well. As the Electronic Privacy Information Center (EPIC) explains , Facebook “overrode users privacy settings to allow companies to access sensitive information that users’ had explicitly set to private.”

Here’s one of relevant excerpts from Facebook’s current Data Policy :

We work with third-party partners who help us provide and improve our Products or who use Facebook Business Tools to grow their businesses, which makes it possible to operate our companies and provide free services to people around the world. We don’t sell any of your information to anyone, and we never will. We also impose strict restrictions on how our partners can use and disclose the data we provide. (my emphasis)

The “third-party partners” Facebook is referring to presumably include the 60+ tech companies to which it gave access to user data through data-sharing agreements. While Facebook makes a point of telling its users it doesn’t sell their data, that statement is misleading and disingenuous. The company may not sell user data. But it does give its “third-party partners” access to that data. In doing so, Facebook is ignoring user privacy choices.

Below is another excerpt from Facebook’s Data Policy that illustrates why Facebook is being disingenuous when it says it doesn’t sell user data:

When you share and communicate using our Products, you choose the audience for what you share . For example, when you post on Facebook, you select the audience for the post, such as a group, all of your friends, the public, or a customized list of people. . . . (my emphasis)

Here, Facebook is trying to reassure its users how it’s concerned about their privacy and wants to give them control over their data. How? By giving them a chance to limit who can see their posts by allowing them choose the “audience” who will have access to the information. For example, users can choose to make their posts accessible to the public (which includes people who don’t have” Facebook accounts) or limit access to just their friends.Or so Facebook claims.

Anyone who read the Data Policy would rightly assume that Facebook’s privacy settings do give them some control over their information. But that control is an illusion. Facebook’s data-sharing agreements gave its “third-party partners” access to the same information it promised users they could keep private. And it did so without their consent and without publicly disclosing the existence of those partnerships, at least until recently.

This should raise an obvious question: should you believe anything Facebook says publicly when it comes to its data and privacy practices? I would put it this way: if you rely on Facebook or its CEO’s public statements about the company’s data and privacy practices, proceed at your own risk.

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Do Smartphones Record Conversations?

Thu, 07 Jun 2018 16:13:00 GMT

Not long ago, Vice News reporter Sam Nichols and a friend were at a bar discussing how they enjoyed their previous trip to Japan and might like to go back a second time. Their smartphones were tucked safely away in their pockets, but with the mics on. According to Nichols, “something strange happened” the next day. After he and his friend logged into their Facebook accounts, they both saw ads for cheap flights to Tokyo.

Just a coincidence? Or was Facebook somehow listening in on their conversation through their smartphones?

As you probably know, the mics on your smartphone and virtual assistant are always on unless you turn them off. Of course, Siri isn’t much use if “she” can’t hear you. When the mic is on, you say “hey, Siri” and Siri responds. Virtual assistants work basically the same way. The wake word or trigger for an Amazon Echo is “Alexa. For a Google home assistant, it’s “hey, Google”.

These devices don’t begin recording and sending information to Apple, Amazon and Google until you say the wake word (well, allegedly). An iPhone won’t transmit data to Apple until after it hears you say “hey, Siri”. But as Nichols explains, the mics on smartphones pick up sounds and voices and store them on the phone itself. This happens whenever the mic is on, even if you haven’t said the wake word.

The fact that your conversations are being stored and processed on your phone probably isn’t a major privacy issue. But it should be if you’ve installed Facebook or other third party apps. If you have, Facebook may transmit what the mic picks up to its servers whenever your smartphone’s mic is on. That may be what happened when Nichols and his friend were talking.

Facebook appears to have the ability to analyze snippets of your conversations and then use the information to target you with ads. But does it? The company denies listening in on its users’ conversations, at least without their permission and only then under certain circumstances. This is how it addressed the issue on its website : Facebook does not use your phone’s microphone to inform ads or to change what you see in News Feed . . . We only access your microphone if you have given our app permission and if you are actively using a specific feature that requires audio .

With that in mind, what Nichols did next may shed light on what Facebook does or doesn’t do – he conducted his own an experiment. Nichols came up with some phrases he thought Facebook might use as triggers to target him with ads, then spoke them into his smartphone, twice a day for five days. He then watched the sponsored posts on Facebook (really, ads) to see whether they changed. In fact, they did. Nichols began seeing different sponsored posts that corresponded to the phrases he used in his experiments. He describes the experience as “ eye-opening and terrifying” .

Facebook’s denials aside, this isn’t an isolated incident. A BBC News article describes similar things happening to other people. The stories include a couple who began seeing wedding ads the day after they got engaged, but before they had told anyone; a woman who mentioned she liked coffee and might go to Starbucks and then saw a Starbucks ad the next time she checked Facebook; and a guy who saw two mattress ads in five minutes after discussing mattresses with a friend.

To be clear, Facebook denies that it listens in on its users’ conversations through the mics on their smartphones. Nichols’ experience could be just a coincidence. The same goes for the stories described in the BBC article. Facebook delivers lots of ads to its users. It wouldn’t be surprising if those ads occasionally concerned stuff people talked about when their smartphone mic was turned on.

Facebook already knows a lot about you from your Facebook posts, likes and shares. The company also buys information data brokers. There’s no reason to let it know what you talk about in private with your friends, family and co-workers. Keep your smartphone mic turned off except when you need to have it on.

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Be Careful When Making Charitable Donations Online

Wed, 06 Jun 2018 21:04:00 GMT

The Federal Trade Commission is warning consumers to be careful when making charitable donations through “online giving portals” .

Online giving portals allow you to quickly and easily contribute to a number of different charities that you want to support through one website. While that’s certainly convenient, there’s also a downside: your donations probably aren’t going directly to the charities you’re supporting. And even when they do, they may take awhile to get there. Instead, your money is going to the organization that’s operating the portal. These organizations are essentially middlemen. They process your donations and send you a tax receipt. But they also deduct a service fee from your contribution before sending what’s left to the charity.

The FTC’s website lists several things consumers should look for when making charitable contributions through online giving portals. If you want to donate through a portal that doesn’t provide the details described on the FTC’s website, makes the details hard to find, or doesn’t describe them clearly, you’re better off donating directly to each charity.

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Identity Theft and Fraudulent Cell Phone Accounts

Tue, 05 Jun 2018 15:53:00 GMT

Consumer Reports has an excellent article on how a new form of identity theft – cell phone fraud – is growing rapidly. The number of fraud victims increased 63% from 2016 to 2017 alone. All signs suggest that the number will continue to increase in the near future.

What is cell phone fraud and how does it work?

Criminals use personal information which obtained in a data breach or bought on the dark web – including names, dates of birth, email addresses, Social Security numbers and bank and credit card numbers – to apply for a cell phone account in the name of the consumer whose identity was stolen. In some cases, they transfer the victims’ cell phone number (called “porting”) to a new, fake account. A thief who opens a fake account has total control of that account and can use it to access the victim’s bank and financial accounts.

Why is cell phone fraud a problem ?

Cell phone fraud can be a bigger problem than other types of identity theft because it’s harder to prevent and detect. In general, it’s easier for criminals to open fake cell phone accounts than fraudulent credit card accounts. Banks run credit checks with the major nationwide consumer reporting agencies (Equifax, Experian and TransUnion) when a consumer applies for a new credit card. If the consumer has placed a credit freeze with the three CRAs, the bank won’t issue a new credit card until the consumer lifts the freeze. Credit freezes are very effective in preventing identity thieves from opening new credit card accounts or taking out loans in the names of people who have had their personal information stolen (which is pretty much all of us).

But when a thief applies for a cell phone account in a victim’s name, the cell phone carrier may not run a credit check. Or if it does, it may run a check through a specialized consumer reporting agency instead of one of the nationwide CRAs. Unless the consumer has also placed a freeze with the specialized agency – and few of us do – the carrier will open a new account for the thief if the victim has reasonably good credit.

Consumers who have been victimized by cell phone fraud won’t likely know about it right away. Some won’t know until they’re contacted by the police. Others will find out only when the fake account goes into default and they’re contacted by the carrier or a debt collector. Those victims whose cell phone numbers were ported to the fake account will stop receiving texts and calls or have their service interrupted. But the thieves may have emptied their bank accounts or run up charges on their credit cards by that time.

What can you do to protect yourself from cell phone fraud?

If your personal information has been stolen in a data breach, you should place a credit freeze with each of the three nationwide CRAs if you haven’t already done so. Unfortunately, that probably won’t stop cell phone fraud. To protect yourself, you should also place a credit freeze with the National Consumer Telecommunications and Utilities Exchange (NCTUE) , the credit reporting agency that many cell phone carriers, cable television and internet providers and utility companies use when consumers apply for new accounts.

You should also see if you can get a PIN from your cell phone company. A PIN will prevent a thief from porting your cell phone number to a new account.

Keep a close eye on your bank and credit credit card statements. Check them frequently and carefully for fraudulent withdrawals and charges.

Lastly, if you suddenly stop receiving calls or text messages, contact your cell phone company immediately. It could mean that a hacker or identity thief ported your number to a fake account with a different carrier.

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FTC Reaches Settlement With Collectors of Phantom Debt

Mon, 04 Jun 2018 20:26:00 GMT

The Federal Trade Commission just announced a settlement with a debt collection operation based in North Carolina for trying to collect phantom debts that were not actually owed. In addition to getting judgments against the defendants for millions of dollars, the settlement bans them from future debt collection activities and from buying debts from other parties.

The FTC’s August 2017 complain t charged the defendants with a variety of deceptive practices, including the following:

This case is a good example of the types of illegal debt collection activities that some sleazy debt collection companies engage in.

If you receive a call from someone claiming you owe a debt, don’t assume you do or that the person calling you has the right to collect it. And never give out any personal information over the phone during an initial call, like your bank account or credit card number.

Debt collectors are required by law to send you a written notice with certain information concerning an allege debt within 5 days of their initial communication with you. You also have a right to notify the collector in writing that you dispute the debt. If you do dispute a debt in writing, the collector has to stop trying to collect it until it contacts the creditor and validates that you owe the debt.

Keep in mind that you may have valid defenses to any attempt to collect a debt, even its owed. If a debt collector engages in the kind of conduct described above, you may also have the right to assert a counterclaim if you’re sued.

Don’t hesitate to contact me if you find yourself in any of these situations.

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Facebook Gave its Third-Party Partners Access to User Data

Mon, 04 Jun 2018 17:26:00 GMT

A recent article New York Times article puts Facebook’s privacy practices back in the spotlight. The article contains new revelations about data-sharing agreements between Facebook and other tech companies. These agreements gave those companies access to data about Facebook users and their friends – a fact Mark Zuckerberg conveniently forgot to mention when he recently testified before Congress.

Many privacy policies state that the company shares user data with third parties. With large companies, that often includes their “affiliates” and trusted “partners”. But the policies disclose the identity of the “affiliates” and “partners.” Facebook’s privacy policy is no exception . It doesn’t identify a single one of its “third-party partners” by name. Even the few people who actually read the policy wouldn’t have a clue as to what companies Facebook shares their data with.

In fact, Facebook has lots of data-sharing partnerships – at least 60 of them , according to Facebook itself. Those “partners” include other large tech companies, like Apple, Amazon, BlackBerry, Microsoft and Samsung. That fact alone should be disturbing to any Facebook user concerned about their privacy. Smartphones collect lots of personal information about their users. Two of Faceboook’s partners – Apple and Samsung – are the world’s largest smartphone makers. You can now add Facebook data to the data they collect when you use your smartphone. Apple at least had the decency to tell the Times how it used the data it got from Facebook. Amazon and Samsung declined comment.

Facebook’s data-sharing agreements with its “partners” wasn’t limited to data posted by individual users. The “partners” could also obtain data about those users’ “friends”, even if they denied Facebook permission to share their data with third parties. Ashkan Sotani , the Federal Trade Commission’s former chief technologist, likened this to, “having door locks installed, only to find out that the locksmith also gave keys to all of his friends so they can come in and rifle through your stuff without having to ask you for permission.”

In 2011, Facebook entered into a consent decree with the FTC to settle a complaint filed against it by the FTC . The terms of the decree prohibit Facebook from overriding the privacy choices of its users without their express consent. Notably, Facebook may have violated the consent decree when it entered into the data-sharing agreements with its “partners”.

Predictably, Facebook disclaims non-compliance. But Sandy Parilakas, a former Facebook executive who was in charge of third-party advertising and privacy compliance, told the Times that the company was discussing its data-sharing agreements internally as early as 2012. “It is shocking that this practice may still continue six years later, and it appears to contradict Facebook’s testimony to Congress that all friend permissions were disabled,” said Parilakas. Jessica Rich, a former Director of the FTC’s Bureau of Consumer Protection, agrees with Parilakas. Facebook can “argue that any sharing of data with third parties is part of the Facebook experience. And this is not at all how the public interpreted their 2014 announcement that they would limit third-party app access to friend data,”, said Rich.

Facebook told the Times that the data-sharing agreements it has with its “partners” limit how they can use the data they get access to. But does the company monitor how its “partners” use the data? If the Cambridge Analytica scandal teaches us anything, the answer would be “very loosely”. And since the third party “partners” store data on their own servers, is it even possible for Facebook to effectively monitor how they use it? Perhaps more importantly, what would Facebook actually do if it discovered that one of its “partners” was using data in a way that violated its data-sharing agreements? Send them a strongly-worded letter?

Facebook’s privacy practices have been under a lot of scrutiny and criticism lately. Every bit of it’s well-earned and long overdue.

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Former Director of the FTC’s Bureau of Consumer Protection: Facebook is a Serial Offender

Wed, 30 May 2018 14:38:00 GMT

David C. Vladeck formerly served as the Director of the Federal Trade Commission’s Bureau of Consumer Protection for nearly 4 years. He worked on several hundred enforcement cases during his tenure. One was the FTC’s investigation of Facebook , which ultimately led to a consent order .

In a recent post on the Harvard Law Review Blog , Vladeck describes how he thought of the companies he investigated as either “clueless” or “venal”. According to Vladeck, “[c]lueless companies acknowledge that problematic conduct took place, but claim that they were unaware of it, and for that reason they shouldn’t be punished—or, at most, should get a slap on the wrist.” In contrast, “[v]enal companies deny all wrongdoing, no matter how egregious the violation, incontrovertible evidence against them, or the toll exacted on consumers.” Which is worse? He wasn’t sure.

Vladeck initially thought Facebook was simply “clueless” . But after its role in the recent Cambridge Analytica fiasco, he’s not so sure. The reason? According to Vladeck, the social media company “is now a serial offender” and can no longer claim to be “clueless”. He notes that Facebook is rightly being criticized for its refusal to candidly disclose how it shares user data with app developers and third parties.

Vladeck’s post describes a few of the many controversies involving Facebook’s privacy practices. The FTC’s press release also lists the numerous broken privacy promises that led to its investigation of the company. These controversies always end the same way: with Mark Zuckerberg apologizing to Facebook users. In fairness, Zuckerberg is hardly alone here. He’s just echoing Silicon Valley’s mantra that it’s better to ask for forgiveness than permission.

Vladeck’s post is interesting because it comes from the perspective of a lawyer (and current law professor) who was directly involved in the FTC’s investigation of Facebook. It’s notable because he’s no longer willing to give the company the benefit of the doubt. He’s not alone. Trust is supposed to be earned. Facebook has broken too many privacy promises followed by too many meaningless apologies to deserve anyone’s trust.

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Federal Court Issues a Preliminary Injunction Against the Dept. of Education in Corinthian Colleges Case

Wed, 30 May 2018 12:56:00 GMT

Last week a US District Court in California ruled that the US Dept. of Education (DOE) violated federal privacy laws when it changed the way it determines whether to forgive loans taken by students who were defrauded by the now-defunct Corinthian Colleges. In issuing its ruling, the court granted a motion for a preliminary injunction (in part) sought by the plaintiffs. The ruling orders DOE to temporarily “stop all efforts to collect Plaintiffs’ loans ” pending further proceedings.

Corinthian Colleges operated several schools across the U.S. under different names, including Everest, Heald, and WyoTech. The plaintiffs all attended one of these schools and took out federal student loans to pay their tuition.

According to a 2012 federal agency report, many for-profit colleges engaged in various unlawful practices, including inflating graduation rates, misrepresenting tuition costs and using high pressure sales tactics. The plaintiffs claim that Corinthian Colleges engaged in similar misconduct.

The amended complaint alleges that DOE previously forgave federal student loans for nearly 25,000 former Corinthian students. But DOE stopped granting discharges on January 20, 2017, when President Trump took office. The plaintiffs claim they are among 110,000 former Corinthian students who have applied for but not received student loan discharges.

The court scheduled a further hearing for June 4th. The ruling warns the parties they should be ready to address several questions at the hearing.

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Europe’s General Data Protection Regulation Goes into Effect on May 25th

Fri, 25 May 2018 16:18:00 GMT

Today is the long-awaited effective date for Europe’s General Data Protection, also known as the GDPR. The GDPR is Europe’s way of pushing back against American tech companies, like Google and Facebook. It’s purpose is to protect the privacy rights of EU citizens.

But many observers believe the law will also give Americans more control over what data is collected about us when we use the internet and – perhaps more importantly – how it’s used. The reason? Some of the changes that tech companies have made to their data collection practices in order to comply with the GDPR will end up being implemented in the U.S.

The internet’s “grand bargain” should be no secret by now. Tech companies like Google give us services for “free”, like search and email. In return, we allow them (sort of) to collect sensitive personal information about us. They use that data to profile us and then share the profiles with their real customers – advertisers – who use them to target us with personalized ads.

Trading personal information for “free” services is the tradeoff, at least in theory. But good luck trying to find out who has access to your data. That’s the fallacy behind calling the exchange of personal information for “free” services a tradeoff. You can’t know whether the tradeoff is fair without knowing who has your data and how it’s being used.

Because of the changes required by the GDPR, companies you’ve done business with will be emailing you about changes to their privacy policies. They’re contacting you to ask you to consent to their updated privacy policies. Don’t ignore these notices. Some of them may describe important new privacy controls you can take advantage of. As the New York Times cautions, “if we ignore them, we may be unintentionally giving consent to more of our data being shared than we actually want to give out.”

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May 31st Deadline for Claiming Refunds in Western Union Settlement

Wed, 23 May 2018 13:52:00 GMT

The Federal Trade Commission just issued a news alert reminding consumers they have until May 31st to claim refunds in connection with the settlement between the Dept. of Justice and Western Union. Anyone who lost money through a Western Union wire transfer scam between January 1, 2004 and January 19, 2017 is eligible. If you don’t know whether you qualify, you can read about the scam here .

You can file your claim on the the FTC’s website at FTC.gov/WU . You can input required information and upload supporting documents at that link. There’s no fee for filing a claim and you shouldn’t need the help of an attorney to do so. The FTC will review and try to validate all of the claims it receives, but can’t guarantee whether a particular claim will be validated or how long the review process will take. But as stated above, claims have to be filed no later than May 31st to be eligible.

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Robocalls Are on the Rise

Mon, 21 May 2018 18:28:00 GMT

Last week Vice Motherboard ran an article on the continuing increase in robocalls from scammers . The article places the blame squarely on new and cheaper spoofing tech that’s outpacing technical and legal solutions.

Caller ID spoofing – and it’s spawn, neighbor spoofing – involves the use of tech that causes a fake telephone number to appear in your caller ID. With neighbor spoofing, the area code and 3 digit exchange would be the same as yours. The idea is to trick you into answering the call because you think the caller is someone local or someone you might trust.

According to Vice, 3.4 billion robocalls were made to Americans last year. This works out to an average of 10.4 calls per “person affected” and resulted in 4.5 million complaints being filed with the FTC . The most common call types involve credit card (promises to reduce interest rates or eliminate balances), student loan (same) and IRS scams (IRS agents and government employees don’t call consumers and demand money or account information). Unfortunately, it keeps getting worse.

The article uses the term “robocalls” to refer to calls from scam artists who try to trick people into giving them financial and personal information they can use to drain bank accounts and run up credit card charges. But scam robocalls should be distinguished from telemarketing calls that are made by businesses trying to sell products and services. We have some legal recourse against certain types of telemarketing calls, including calls made to numbers registered on the national Do Not Call Registry. Unfortunately, there’s not much we can do about robocalls from scammers, apart from trying to block the calls (e.g., nomorobo.com ) or hanging up immediately. To protect yourself, you should never give out or confirm personal or financial information (like bank account or credit card numbers), wire money or buy or send a gift card to someone who calls you. And never allow yourself to be pressured or threatened into taking action.

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The Department of Education Is Winding Down its Investigation of For-Profit Colleges

Sun, 20 May 2018 14:45:00 GMT

Students who took out loans to attend for-profit colleges are defaulting on their loans at a significantly higher rate than students who attended regular universities, for three basic reasons. First, for-profit colleges are generally more expensive than nearby public colleges which offer equivalent degrees and certificates. Second, the quality of education is generally poor. Many graduates can’t find decent-paying jobs in their field of study. Third, many graduating students are left with a massive amount of student loan debt which they can’t pay and can’t discharge in bankruptcy.

Many for-profit colleges use deceptive marketing, predatory recruitment practices and high-pressure sales tactics to convince students to enroll. In 2010, the General Accounting Office (GAO) sent undercover investigators to 15 for-profit colleges who pretended they were applying to the school. According to the GAO, officials at all 15 schools made “made deceptive or otherwise questionable statements” to the investigators, while representatives at 4 schools encouraged them to “falsify their financial aid forms to qualify for federal aid.” The GAO also found that many of these schools exaggerated how much students would earn after they graduated, falsely represented graduation rates, misled students about tuition, fees and costs and made false or misleading representations about their accreditation.

Alarmed by these predatory activities, the Dept. of Education under President Obama formed a special team to investigate widespread abuse and deception by for-profit colleges (the team was formed after the 2016 collapse of Corinthian Colleges). Unfortunately, the DOE under President Trump is now reassigning the members of that team and significantly narrowing the scope of its investigation . The Department is also refusing to share its data on for-profit colleges with the states, making it harder for state attorney generals to crack down on the for-profit colleges operating in their state.

If you attended a for-profit college and can’t find a job in your field of study, or you’re struggling to pay your student loans, I may be able to help. The practices described above violate the Massachusetts consumer protection law and are grounds for a private lawsuit. If you contact me, I can review your situation and we can go over what options you may have.

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The FTC Charges Several Related Companies With Running a Deceptive Business Coaching Scheme

Wed, 16 May 2018 18:58:00 GMT

The Federal Trade Commission has filed a complaint in federal court charging Vision Solution Marketing, LLC, and several related companies with using a deceptive business coaching scheme to bilk millions of dollars out of unwary consumers. The FTC’s complaint charges the defendants with engaging in various deceptive business practices, including overstating how much money consumers could potentially earn, and multiple violations of the Telemarketing Sales Rule

According to the FTC’s complaint , the defendants purchased “leads” from several third parties that included contact information for consumers who had bought work-at-home programs on the internet. The defendants’ telemarketers then called these consumers and tried to convince them to pay exorbitant fees (as much $15,800) for advice on how they could earn substantial money by starting a home-based business. But the scam didn’t stop there. If a consumer paid the initial fee, the defendants tried to persuade them to pay thousands of dollars more for additional “advanced” services from “experts” and “specialists”.

In fact, the so-called advice and coaching provided by the defendants consisted of basic information that’s available for free online. The unfortunate people who paid for these bogus services were not able to start a viable business and earned little or no money.

If you’ve been victimized by this or a similar type of deceptive scheme involving business coaching or a home-based business opportunity, please contact me. The allegations described in the FTC’s complaint are almost certainly violations of our consumer protection law and would be grounds for a private lawsuit seeking multiple damages, costs and legal fees.

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