Federal Trade Commission

The FTC announced two victories in separate actions against Personal Protective Equipment (“PPE”) companies and secured more than $17 million for consumers. In the two cases, the FTC has alleged that California-based Glowyy and Louisiana-based American Screening each failed to deliver PPE products within promised time periods during the early stages of the COVID-19 pandemic. In addition, the FTC announced a new action and consent agreement against online homebuying firm Opendoor Labs, Inc. for allegedly misleading claims about the benefits of its service. Last, the Commission is sending checks totaling more than $1 million to 1,966 consumers who were harmed by a debt collection scam. These stories and more after the jump.

Monday, August 1, 2022

Bureau of Consumer Protection: Health Claims & COVID-19

  • The Federal Trade Commission has scored two victories in lawsuits against businesses who failed to deliver on personal protective equipment orders as promised at the onset of the COVID-19 pandemic. The Commission’s motions for summary judgment have been granted in two separate actions against California-based QYK Brands (d/b/a/ Glowyy) and Louisiana-based American Screening, LLC. The FTC alleged that both defendants made false promises about the availability of PPE gear, including masks, face shields, hand sanitizer, and gowns, in the early stages of the COVID-19 pandemic and repeatedly failed to deliver on these promises—consumers waited weeks or even months for their ordered items to arrive, which were advertised to be shipped the same day or “within 24-48 hours.” Further, the defendants failed to offer refunds to consumers or seek consent on the delay from consumers, as required by the Mail Order Rule, when they were not able to ship the orders within the promised time period.
  • In the Glowyy case, a permanent injunction has been entered, prohibiting the defendants from further selling any COVID-19 related products and requesting surrender of $3.08 million as refunds to consumers. Similarly, in the American Screening case, the court agreed with the FTC that both monetary relief in excess of $14 million and injunctive relief are appropriate.

Bureau of Consumer Protection:  Online Advertising and Marketing

  • The Federal Trade Commission announced a draft administrative complaint and consent agreement against online home buying firm Opendoor Labs Inc. for deceptive claims about its home-buying service. Opendoor Labs pitched potential home sellers by advertising that they could profit more by selling their home to Opendoor than through traditional sales process on the open market. The Commission alleged, however, that most people who sold to Opendoor actually lost thousands of dollars compared to using the traditional process, because Opendoor’s offers have been below market value on average while its costs have been high than through a traditional realtor. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, opined that “Opendoor promised to revolutionize the real estate market but built its business using old-fashioned deception about how much consumers could earn from selling their homes on the platform.” The proposed order settling the complaint requires Opendoor to stop all the deceptive practices, including making any baseless claims, and to pay $62 million, which is expected to be used for consumer redress. 

Thursday, August 4, 2022

Bureau of Consumer Protection:  Debt Collection

  • Following a 2019 settlement agreement, the FTC is sending payments with a total of more than $1 million to 1,966 consumers who were harmed by a debt collection scheme. The payments could come in as either a PayPal payment or a check in the mail. The scammers, who used a few names including GAFS Group, Global Mediation Group, and Mediation Services and falsely claimed to be attorneys or affiliated with attorneys, conned consumers into paying debts they did not owe. They threatened consumers with potential legal action if the phantom debts were not paid.