Skip to content

FTC Steps Up Actions Against Deceptive Marketers Online

Last month, the Federal Trade Commission (FTC) announced actions or settlements against multiple businesses it alleges engaged in various forms of deceptive and misleading online marketing. The variety of businesses - from supplement merchants to student loan consolidators - demonstrates the broad use of deceptive practices and how they continue to flourish online. It's a reminder to payment service providers and e-commerce platforms that virtually any merchant poses risk for deceptive marketing.

Highlights from the FTC in just the past month include the following:

 

The FTC announced that Renaissance Health Publishing, LLC and its owner would refund more than $76,000 to consumers who purchased Isoprex, a supplement comprising mostly herbs and spices. According to the FTC, the company made problematic claims that the product could relieve suffering from muscle and joint pain, headaches, arthritis, joint inflammation, and a range of other ailments in older adults.

 

Arete Financial Group and other related companies agreed to pay at least $835,000 to settle FTC allegations that their student debt relief program charged illegal upfront fees and made false promises. The FTC first alleged in 2019 that the companies pretended to be affiliated with the US Department of Education and deceptively promised loan forgiveness, consolidation, and repayment programs for those with student debt to reduce or eliminate payments and balances.

 

More than 70,000 consumers will receive reimbursement in response to an FTC settlement with NeuroMetrix, Inc., a company that sold Quell, a wearable transcutaneous electrical nerve stimulation device. According to the FTC, the company touted the device as "clinically proven" and "FDA cleared" for chronic pain relief. The pain claims lacked scientific evidence and claims about FDA clearance for this use were false, according to the FTC.

 

The FTC alleged that a company using the name "SBA Loan Program" and the website SBALoanProgram[.]com misled small businesses to believe they had an affiliation with the US Small Business Administration and could provide access to the relief programs offered as a result of the pandemic. The settlement announced last month prohibits Ponte Investments, LLC, and its owner from misrepresenting that they are authorized to accept or process applications for SBA loans and that they are in any way affiliated with the SBA or the US government.

 

More than 12,000 consumers will receive checks from a $110,000 settlement over a complaint the FTC filed with  Excellent Marketing Results, Inc. The FTC alleges the company made problematic claims about the supplement's ability to treat or relieve joint pain.

 

The FTC announced last month that Online Trading Academy (OTA) will pay between $5 and $9.1 million as well as forgive the debt of thousands of consumers as part of a settlement over deceptive marketing practices. The FTC alleged that for years the company used sales pitches with testimonials to promise significant income from their investment training program, when in actuality most purchasers made little to no money.

 

At LegitScript, our mission is to make the internet and payment ecosystems safer and more transparent for businesses and internet users. Our experts proactively track high-risk areas and provide analysis of whether a merchant may be engaged in deceptive marketing posing regulatory, reputational, or credit risk. Our merchant monitoring provides best- in-class solutions for identifying and removing these problematic vendors.

Want to learn more? Download our guides on deceptive practices. Just click on the images below.

 

David Khalaf is a writing, communications, and marketing professional with specialties in media, investigations, content strategy, and writing instruction. His 20 years of writing, media, and communications work have included two top-tier universities (USC and UCLA), print and digital magazines, consulting firms, and technology companies.

His current work involves content strategy and development at LegitScript, a company that helps the world's leading search engines, payment service providers, and internet platforms and marketplaces do business with legitimate, legally operating entities in more than 80 countries and 15 languages around the world. LegitScript specializes in risk and compliance for highly regulated industries including CBD/cannabis, online gambling, cryptocurrencies, drugs, financial trading, online adult, scams and fraud, and more.

Recent Blog Articles

This Piece of Legislation Redefined Hemp for an Entire Nation

The 2018 Farm Bill redefined the legal definition for hemp, and with that change unearthed a nationwide market for hemp-derived CBD products. Learn more about the Farm Bill, explore the current regulatory landscape for hemp and CBD products, and then download LegitScript's CBD Compliance Resource Gu...
Invest in trust and safety.

A Recent Report Recommends Investing in Trust and Safety

In the recent Trust and Safety Market Research Report published by Duco, researchers found that investment in trust and safety is increasingly important and that solutions like LegitScript's Ad Monitoring and Marketplace Monitoring can accelerate these efforts while providing a solid return on inves...
What is fraud prevention?

What Is Fraud Prevention? Here’s What You Need to Know

What do acquiring banks, sponsor banks, and/or payment processors need to know about fraud prevention? We'll cover what fraud prevention is, what payments fraud is, and how LegitScript Merchant Onboarding and Merchant Monitoring fit within your fraud risk management programs framework. Then contact...
fraud risk management

Holistic Fraud Risk Management Programs Look Like This

Taking a holistic, proactive approach to fraud risk management helps your organization mitigate risk, remain compliant, protect your customers, and avoid scrutiny from card brands and regulatory agencies. Discover how LegitScript Merchant Monitoring and Merchant Onboarding fit into your merchant ris...