Tag Archives: Power

Consumer watchdog loses power to recover money for victims after accused scammer sues — and wins

Consumer watchdog loses power to recover money for victims after accused scammer sues — and wins

Cicero’s Vanessa Solorzano (left), with her fiance Edgar Reyes and their son, says she fell victim to a scam involving phony apartment ads and credit monitoring. | Provided

The Federal Trade Commission has returned $1 billion to consumers over the years. Now the fraud-fighting agency is facing a legal obstacle in Chicago.

The scheme was ingenious.

Marketers posted ads on Craigslist for bargain-priced rentals in hot areas like Logan Square or downtown Evanston.

When apartment hunters responded, they’d get an email offering a tour — but first they needed to click a link to get their free credit score.

The catch? The rental ads were fake. And consumers who applied for the “free credit score” were signed up for $29.94-a-month credit monitoring, a recurring charge disclosed in small print and missed by many applicants, government lawyers said.

Many consumers, disappointed when the apartment tours fell through, were surprised when the credit monitoring fees hit their accounts.

The Federal Trade Commission estimates that Credit Bureau Center LLC, which did business as MyScore, eFreeScore and other names, took in millions of dollars between 2014 and 2017.

The agency got a federal judge in Chicago to halt the scheme and order website owner Michael Brown to pay $5.2 million in restitution. Brown’s co-defendants, who placed the fake ads, separately were ordered to pay $762,000.

And that’s where it would have ended, if the case was like most of the others the FTC undertakes for consumers each year.

Three decades of precedent upended

Except this time, the alleged scammer turned around and sued the feds — and won.

Brown’s attorney argued the FTC had no right to collect the $5.2 million on behalf of consumers because a 1973 law governing the agency never explicitly gave it that power.

The 7th Circuit U.S. Court of Appeals, based in Chicago, last summer agreed.

In her decision, Judge Diane Sykes, a George W. Bush appointee, didn’t dispute that Brown had misled consumers. But she said the FTC can’t use a court injunction to recover money, even for victims. Instead, the agency should’ve first gotten a cease-and-desist order — and then if the business violated it, it could be sued.

The ruling went against three decades of precedent and created headaches for one of the nation’s highest-profile consumer agencies. Because of it, the FTC hasn’t filed any new fraud cases in Illinois, Wisconsin or Indiana.

Though it can still file Chicago-related cases in other jurisdictions — if there’s a victim or defendant there — the agency is now asking the U.S. Supreme Court to weigh in, hoping to get the ruling overturned.

Illinois Attorney General Kwame Raoul submitted a friend-of-the-court brief in January signed by 23 other attorneys general, arguing that states benefit when the FTC collects restitution for wronged consumers.

For years, as the FTC has pursued injunctions against scams plaguing consumers — like illegal robocallers, phony tech support and fake debt collectors — it has typically sought to return ill-gotten money to victims.

The agency has returned about $1 billion in assets in recent years. In Illinois, the FTC has returned more than $45 million to about 231,000 consumers, the agency’s records show.

“The stakes for U.S. consumers are very large,” says Joel Marcus, FTC deputy general counsel, calling the the 7th Circuit ruling “a direct threat to our mission, if it were to be adopted by other courts of appeals.”

He added: “What we are concerned about is the domino [effect].”

A screenshot from one of the websites run by Credit Bureau Center LLC, which was sued for fraud by the Federal Trade Commission. The company then sued the feds — and won.Federal Trade Commission
A screenshot from one of the websites run by Credit Bureau Center LLC, which was sued for fraud by the Federal Trade Commission. The company then sued the feds — and won.

Victims sought North Side apartment

Vanessa Solorzano, 26, and her boyfriend fell victim to the scheme in 2016, after responding to a Craigslist ad for a North Side apartment.

They followed the instructions for the free credit score, providing a credit card for a $1 processing fee. Solorzano says she got suspicious when the apartment ad disappeared. Then the card was hit with the credit monitoring charge.

The couple quickly stopped the transaction and canceled the card, and Solorzano filed a complaint.

As for the lawsuit against the FTC, Solorzano, now engaged and living in Cicero, says it’s “crazy.”

“That money was never his, or theirs, to begin with,” she says. “You stole from people.”

FTC overreached, attorney says

But Texas attorney Stephen R. Cochell, a former assistant U.S. attorney who is representing Brown and Credit Bureau Center, says the FTC has been using a faulty legal basis.

“From the business perspective, there is a great deal of overreaching by the FTC,” he says.

Cochell says his client was misled by the other defendants, who never told him the rental ads were fake. Brown provided a helpful service, the attorney says.

He adds that businesses sued by the federal government are at a disadvantage because once their accounts are frozen, it’s hard to mount the best possible legal defense.

“That leaves the company in a really dire situation,” Cochell says.

Solorzano sees things differently: “When people are unaware that you’re taking their money, obviously unwillingly, it’s just not fair.”

Source : Stephanie Zimmermann Link

Los Angeles to shut off water, power of nonessential businesses that refuse to close during coronavirus restrictions

Los Angeles to shut off water, power of nonessential businesses that refuse to close during coronavirus restrictions Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here. Los Angeles authorities could shut down water … read more

Affordable Mother’s Day Gifts That Look Way Pricier Than They Are

Affordable Mother’s Day Gifts That Look Way Pricier Than They Are Power Gemstone Beaded Bracelet Gorjana Nordstrom $38.00 Depending on which gemstones you choose, Gorjana’s power beaded bracelet represents balance, healing, calming, focus, protection, wisdom, luck, or strength—everything your mom embodies, so … read more

‘She-Ra and the Princesses of Power’: Fifth (and Final) Season Premiere Date Revealed

‘She-Ra and the Princesses of Power’: Fifth (and Final) Season Premiere Date Revealed DreamWorks Animation announce today that the highly anticipated fifth and final season of the critically acclaimed and Emmy, Critics Choice and GLAAD Media Award-nominated Netflix original series … read more

Power up! Anker just slashed the prices of its top-rated chargers and surge protectors—snag one starting at just $14

Power up! Anker just slashed the prices of its top-rated chargers and surge protectors—snag one starting at just $14 Almost over 25,400 five-star Amazon reviewers seem to agree. “This charger is amazing,” wrote a five-star reviewer. “It does take a … read more

Power to the people: Amazon’s best-selling Anker charging accessories are on sale today, starting at just $13

Power to the people: Amazon’s best-selling Anker charging accessories are on sale today, starting at just $13 Check out more deals here, and remember—they’re here today, but gone tomorrow! Read More from Yahoo Lifestyle: Want daily pop culture news delivered … read more

Feel the power: Greenworks electric mowers, hedge trimmers, chainsaws, and more are up to 40 percent off today

Feel the power: Greenworks electric mowers, hedge trimmers, chainsaws, and more are up to 40 percent off today A mower that frees you from batteries or gasoline. This battery-powered electric machine has a fierce motor and push-button start for ease. … read more