Right on the money
Two announcements today underscore a key FTC enforcement priority: getting money back for people deceived by companies’ illegal practices.
More than 110,000 refund checks totaling about $1.9 million are in the mail to loan applicants who were tricked into paying for a separate debit card through a misleading pre-checked box on an online form. According to the FTC, Swish Marketing, Inc., and VirtualWorks LLC came up with the promotion. Both companies — and five of their corporate officers — were held liable.
The FTC is also mailing about 4,450 refund checks totaling $3.2 million to people who were sold bogus “auto warranties” that turned out to be extended service contracts. The FTC charged that Transcontinental Warranty hired telemarketer Voice Touch, Inc., to blast people with robocalls claiming their warranties were about to expire. According to the complaint, the calls made it sound like they were coming from consumers’ car dealerships or manufacturers. How much will people be getting back? The amount varies from a few bucks to more than $7,000, depending on what they paid.
What message should businesses take from these developments? Certainly, the FTC seeks strong injunctive provisions to stop illegal practices and to prevent defendants from violating the law in the future. But companies shouldn’t assume that a “Go and sin no more” order will be sufficient. These days, more and more FTC cases — both litigated matters and settlements — include money back for consumers.