The FTC kicked off the holiday season focusing on deceptive telemarketing practices. The Commission also announced the finalization of a rule targeting deceptive tactics used by salespeople during the car buying process. These stories and more after the jump.

Monday, December 11, 2023

Bureau of Consumer Protection; Deceptive/Misleading Conduct; Advertising and Marketing Online Advertising and Marketing; Advertising and Marketing Basics

  • The FTC filed proposed orders against the operators of a telemarketing advice income scheme, “The Sales Mentor” imposing a $16,363,073.11 monetary judgment in addition to prohibitions on (1) earnings claims that are misleading or unsubstantiated, and (2) any misrepresentation in the selling of any goods or services. Defendants Traffic and Funnels, LLC; We Capital, LLC; Evans and Welch, Inc; Evans and Welch, LLC, and their respective officers were sued by the FTC on December 5, 2023. The FTC alleged that the scheme’s operators deceived consumers into paying thousands of dollars for purported telemarketing training programs. Additionally, after receiving notices of penalty offenses from the FTC regarding the schemes and notice of the illegal conduct, the companies continued to make deceptive earnings claims. The order also required Taylor Welch to turn over $600,000 and Chris A. Evans to turn over $400,000 to the FTC to provide refunds to consumers harmed by the scheme. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, commented that “Traffic and Funnels lured people looking to work and earn an income with false or unfounded earnings claims, even after receiving legal notices from the FTC about the illegality of such conduct,” and “[t]he FTC will continue to crack down on deceptive earnings claims that cheat consumers.”

Tuesday, December 12, 2023

Bureau of Consumer Protection; Deceptive/Misleading Conduct; Advertising and Marketing; Advertising and Marketing Basics

  • The FTC announced the finalization of a rule to fight against illegal tactics consumers face when purchasing cars. The Combating Auto Retail Scams (“CARS”) rule is set to target bait-and-switch tactics and hidden junk fees. The FTC has estimated that the rule would save consumers more than $3.4 billion and an estimated 72 million hours each year shopping for vehicles. The rule (1) prohibits misrepresentations about key information, including price and cost; (2) requires dealers to provide the actual price any consumer can pay for the vehicle, to tell consumers that optional add-ons are not required, and give information about the total payment when discussing monthly payments; (3) prohibits dealers from charging for any add-on that does not provide a benefit to consumers; and (4) requires dealers to get consumers’ express, informed consent for any charges that they pay as part of a vehicle purchase.