Class Action Blog : Consumer Fraud, Consumer Protection, Securities and Antitrust Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz

More than 15 years after ending a lengthy legal battle with the Federal Trade Commission in the mid-1990s, sneaker-maker, New Balance, continues boldly to tout its products as “Made in USA” without qualification, even when doing so flouts the FTC’s requirement that “all or virtually all” of the product must be made in this country before a manufacturer can make such a claim.  New Balance’s “Made in USA” claim is an integral part of its marketing; and is a central means by which it attempts to distinguish itself from other sneaker companies whose reputations are of using cut-rate, foreign manufacturing.  Yet, New Balance’s claims of domestic manufacturing are not only potentially misleading, but also aggressively skirt a consent decree the company entered with FTC last decade, in which it agreed not to label as American-made any sneakers not completely made in America.

 New Balance has now adopted its own standard by which claims that any product either 70% made or assembled in the USA is “Made in USA.”  However that definition has never been approved, or even submitted for approval to FTC.  Moreover New Balance reportedly includes in certain places on its website or product packaging an unqualified “Made in the USA,” claim, complete with American flag imagery, while only providing a qualified claim elsewhere, in which it explains that up to 30% of the sneaker’s materials or assembly has occurred abroad.  In short, consumers may be being deceived when they favor these shoes over those of New Balance’s competitor based on the belief that they are made at home.

If you, or someone you know, has been deceived by the “Made in USA” claims of New Balance or another company, please contact us to discuss your legal options.

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As part of an effort to ensure that environmental marketing is truthful and based on solid evidence, the Federal Trade Commission (“FTC”) has advised marketers since 1992 that in order to make claims that an item is “biodegradable” they must have scientific evidence that the product will completely decompose within a reasonably short period of time under customary methods of disposal.  And, as the FTC has asserted in three recently filed actions, products typically are disposed in landfills, incinerators or recycling facilities, where it is impossible for allegedly “biodegradable” products to biodegrade within a reasonably short time.

For example, the FTC recently entered into a settlement with a retailer of rayon towels – Dyna-E International – regarding claims that its Lightload brand dry towels are biodegradable.  The FTC charged that the rayon towels could not be biodegradable as they could not biodegrade in a reasonably short time under typical disposal methods.  Similarly, the FTC entered into settlements with Kmart Corp. and Tender Corp. regarding products sold with biodegradable claims.  All three settlements prohibit the defendants from making deceptive biodegradable product claims and require that they support all other environmental claims with competent and reliable evidence.

If you purchased a product that claims to be “biodegradable,” please contact us to discuss your legal options.

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The Federal Trade Commission (“FTC”) has ordered the marketers of the dietary supplements Supreme Greens and Coral Calcium to pay nearly $70 million dollars in consumer refunds as a result of deceiving consumers about the safety and effectiveness of their products.

The marketers of these products claimed that they were effective in treating a range of ailments including cancer, Parkinson’s disease, heart disease, diabetes, arthritis, autoimmune diseases and obesity.  They also claimed the supplements were safe for children, pregnant women and people taking medications.  A federal district court found these safety and effectiveness claims to be deceptive.

If you are a consumer who has purchased and/or been injured by either or both of these products, please contact us to discuss your legal options.

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Who wouldn’t want to lose weight without dieting or exercise?  The weight loss industry makes billions of dollars each year by preying upon our desire to lose those extra pounds.  However, physicians and other health experts caution that there is no “magic bullet” when it comes to weight loss.  And many health experts recommend that safe diets require a loss of no more than 2 pounds per week.

Despite these recommendations, the Internet is rife with ads promising to “Lose 25 Pounds in 2 Weeks” and supposed testimonials proclaiming, “I lost 36 pounds in 1 month.”  Consumers should beware of these claims.  In fact, the Federal Trade Commission (“FTC”) has issued guidelines for consumers warning them to “think twice before wasting money on products that make any of the following false claims”:

Lose weight without diet or exercise!

Lose weight no matter how much you eat of your favorite foods!

Lose weight permanently! Never diet again!

Block the absorption of fat, carbs, or calories!

Lose 30 pounds in 30 days!

Everybody will lose weight!

Lose weight with our miracle diet patch or cream!

If you or someone you know has been the victim of a diet scam, please contact us to discuss your legal options.

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With the recent economic downturn, many homeowners are facing the risk of mortgage foreclosures.  Desperate to save their homes, many people are falling prey to the predatory practices of mortgage rescue scams.  Typically, these scams solicit the homeowner with promises of debt relief that often seem too good to be true.  In fact, these are fraudulent offers, designed to prey upon those most in need of financial help.

The Federal Trade Commission (“FTC”) has alerted consumers to look out for five major warning signs of a mortgage rescue scam.  First, they will promise to stop a foreclosure or modify your loan.  Second, they will offer “guarantees,” that your home will be saved, with claims of a 97% success rate.  Third, they usually require fees to be paid in advance.  Fourth, they will advise you to stop paying your mortgage company.  Finally, they may have the look or sound of an official agency or governmental authority.

 If you believe you or someone you know has been the victim of a mortgage rescue scam, please contact us to discuss your legal options.

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Colon cleansing products are all the rage and the competition for the consumer dollar is fierce.  Numerous websites purport to be objective comparisons for colon cleansers, but are really just advertisements touting certain products.  For example, the Colon Review Board bills itself as the “Official source for colon cleanse news, reviews and information.”  They claim to be a New York based company that is a “watch dog group in the health products industry.”  Yet the website is registered to a Canadian firm, Domain Privacy Group, Inc. in Markham, Ontario.  The website reports on three colon cleanser products and goes on to praise the benefits of colon cleansing.  The website claims that our modern diet and lifestyle allegedly deposit toxins in the colon that impair our skin condition, our absorption of nutrients and may even lead to colon cancer.  Not surprisingly this website has links to the websites for the three products it rates most highly.

Another site, naturalhealingtoday.com, also offers a review of colon cleansers by its “editorial staff.”  The site claims that hardened fecal matter and other toxic materials in the colon impair digestion and nutrient absorption.  Ten separate products receive reviews and a customer feedback section is included.  The website is registered to Domains by Proxy, Inc., which at best helps conceal the real identity about this purportedly neutral pro-consumer site.

WebMD reports that colon cleansing has been examined inconclusively in regard to a few health concerns, none of which are the toxins, weight loss or other benefits alleged by the numerous current colon-cleansing advertisements.  WebMD also offers some additional observations.  The liver and the natural bacteria in the colon detoxify food wastes.  The mucus membranes colon cleansers claim should be removed are the body’s natural barrier keeping unwanted substances from being absorbed into the body.  The colon naturally sheds old cells on a regular basis, which prevents a build-up of harmful material.  And weight loss is unrelated to the colon since most calories are absorbed earlier in the digestive process.  WebMD also recommends you protect your colon health by eating 20 – 35 grams of fiber a day, drinking plenty of fluids, limiting alcohol and red meat and having colon cancer screenings after age 50 or at your doctor’s direction.

The claims made by the various colon cleansing products are almost identical to those made by Mega Systems International, Inc. regarding Eden’s Secret Nature’s Purifying Product during the late 1990s.  That product claimed to cleanse the body of toxic waste, colon waste and help the user lose weight, among other benefits.  In 1998, the Federal Trade Commission (“FTC”) required Mega Systems to cease advertising that the product would cause significant weight loss, prevent or cure illnesses and cleanse the body of toxins.

It may well be that the current interest in colon cleansing products may only be the re-emergence of an old consumer health fraud scam.

If you have been injured or deceived into purchasing colon cleansing products, please contact us to discuss your legal options.

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In the wake of rising unemployment claims and mortgage foreclosures, Spanish-speaking consumers are being unfairly preyed upon by unscrupulous businesses who promise to stop foreclosure proceedings only to have consumers ultimately lose their homes despite paying significant sums of money to such “rescue operation” services.  Recently, in a lawsuit filed in Los Angeles, California the Federal Trade Commission ("FTC") charged a mortgage foreclosure “rescue operation” with falsely promising Spanish-speaking consumers who are behind on their mortgage payments that it would stop foreclosure.  Many people who paid the “rescue service” ultimately lost their homes, and others avoided foreclosure only through their own efforts.  At the FTC’s request, a federal court temporarily halted the defendants’ practices and froze their assets.

According to the FTC’s complaint, the defendants enticed consumers with false claims in Spanish-language radio and magazine ads, and during in-person consultations.  The defendants charged consumers an up-front fee equivalent to each consumer’s monthly mortgage payment, which was typically in the thousands of dollars.  In numerous instances, however, the defendants did not stop foreclosure proceedings from occurring or obtain mortgage loan modifications.

 If you have been the victim of a mortgage foreclosure “rescue operation,” please contact us.

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In response to the mortgage crisis, the Obama administration introduced the Making Home Affordable program, which provides free mortgage counseling to consumers who are worried about losing their homes. In late March, the administration launched the program’s web site, makinghomeaffordable.gov.

It didn’t take long before alleged internet scammers attempted to prey on struggling homeowners seeking the government’s help. According to the Federal Trade Commission ("FTC"), consumers searching for the Making Home Affordable web site were diverted under false pretenses to other sites where they were asked to enter personal and financial information and to purchase mortgage counseling services from private companies for a fee.

On May 14, the FTC filed a complaint against the unknown defendants in federal court in Washington, D.C. The next day, U.S. District Judge Colleen Kollar-Kotelly issued a temporary restraining order that effectively outlaws the alleged scam.

Here’s how it worked, according to the FTC’s complaint:  the defendants purchased preferred advertisements on Internet search engine sites, including yahoo.com and msn.com.  When consumers entered a search for “making home affordable” or similar phrases, the defendants’ ads would appear at the top of the page, shaded in blue for emphasis.  The FTC alleges that the ads made it appear that the advertisements contained links to the official government program, and even used the phrase “MakingHomeAffordable.gov.”  But consumers who clicked on the links allegedly were redirected to various web sites that marketed home loan modification or foreclosure relief services for a fee.  The FTC alleged that the defendants falsely represented to the public that they were affiliated with the U.S. government and operated the government’s makinghomeaffordable.gov web site.

Judge Kollar-Kotelly found good cause to believe that the defendants were violating the FTC Act, which prohibits deceptive acts or practices in commerce.  She also found good cause to believe that consumers would suffer immediate and continuing harm unless the alleged scam was halted.  Her restraining order prohibits the defendants from pretending to represent the government, and from posting internet ads that contain any hyperlink with a “.gov” domain name, including makinghomeaffordable.gov.

One more thing: the court ordered Yahoo and the other search engine operators to identify whoever placed the ads. For now, the case caption reads: Federal Trade Commission v. One or More Unknown Parties Misrepresenting Their Affiliation With The Making Home Affordable Program.

If you were deceptively redirected to various web sites that market home loan modification or foreclosure relief services and charged a fee, please contact us to discuss your legal options.

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On May 14, 2009, the Federal Trade Commission (“FTC”) filed suit in the Northern District of Illinois against two companies involved in making millions of allegedly deceptive “robocalls” to consumers in an effort to sell them vehicle service contracts under the guise of extensions of the original vehicle warranties. The FTC complaint against the robocaller names Florida-based Voice Touch, Inc. and two of its principals as well as Illinois-based Network Foundations, LLC and a principal of that company.   The complaint against the seller of the extended auto warranties names Florida-based Transcontinental Warranty, Inc., and its president and CEO.

The robocalls consist of a pre-recorded message that informs consumers that their original vehicle warranty is about to expire and they should “extend coverage before it’s too late.” The so-called “warranty specialists” mislead consumers into believing the seller of the extended warranty is affiliated with the dealer or manufacturer of the consumer’s vehicle. The “warranty specialists” then attempt to sell consumers a service contract which is falsely portrayed as an extension of the vehicle’s original warranty.

In addition to the robocalls, the FTC's complaint against Transcontinental Warranty alleges that it mails out deceptive postcards to consumers warning them about imminent expiration of their auto warranties. The FTC has charged the defendants with engaging in deceptive business practices in violation of the FTC Act and violation of the FTC’s Telemarketing Sales Rule by calling consumers whose numbers were on the National Do Not Call Registry.

 If you were deceived into purchasing an extended warranty from Transcontinental Warranty, Inc., please contact us to discuss your legal options.

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It should come as no surprise that with all the stories in the news about stimulus funding, con artists have invented stimulus scams. The scam begins with an email, online ad or website that says you’re eligible to obtain an economic stimulus payment.  All you have to do is send back a completed form or submit one online.  The message might look like it was sent from a rebate company or the Internal Revenue Service (“IRS”).  The scam artists may ask you to send a processing fee to supposedly get a much larger check in return.  Others ask for your bank account number so they can deposit your check.  The scam artists then clean out your account or open new ones using your identifying information.  Some stimulus scams even encourage you to click on a link or open attached forms that in turn install harmful software, like spyware, on your computer resulting in your personal information ending up in the hands of an identity thief.

The Federal Trade Commission (“FTC”) cautions that the promise of stimulus money in return for a fee or financial information is always a scam, and advises consumers to ignore or delete messages offering you money from the stimulus program in exchange for personal information.

If you are a victim of a stimulus scam, contact us to discuss your legal options.

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The Federal Trade Commission (“FTC”) has reported a growing problem with scams involving purported rescue plans for home owners facing foreclosure.  The FTC brought 11 cases targeting mortgage foreclosure rescue and loan modification scams within the last year and is actively involved in ongoing investigations.  Additionally, the FTC has sent warning letters to 71 companies for marketing potentially deceptive mortgage loan modification and foreclosure assistance programs, and for falsely appearing to be affiliated with a non-profit or government entity or endorsed by government officials.  For example, the FTC recently filed a complaint against the Federal Loan Modification Law Center, LLP for allegedly misrepresenting that they were a part of, or affiliated with, the federal government and that consumers could obtain a loan modification in virtually all instances.

The FTC also recently settled charges against two individuals that they violated federal law and a previous court order by luring homeowners into high-cost, short term loans secured by an additional mortgage on their homes. The FTC sued them and 7 other defendants as part of an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure.  The FTC complaint alleges that the defendants violated the Home Ownership and Equity Protection Act by extending credit based on the value of consumers’ collateral without regard to their repayment ability, by requiring balloon payments after only 6 months, by providing negatively amortized loans that cause consumers to owe more at the end of the loan than at the beginning, and by failing to make required disclosures.  The defendants also allegedly violated the Truth in Lending Act (TILA) by grossly understating the loan’s annual percentage rate (APR) and finance charges.  Moreover, the complaint alleges that the defendants violated TILA by failing to make timely written disclosures and failing to accurately disclose the amount being financed, the finance charge, the APR, the payment schedule, the total payment amount and the fact that the creditor has or will acquire a security interest in the consumer’s home.

If you are a victim of a mortgage foreclosure rescue scam, please contact us to discuss your legal options.

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The Food and Drug Administration (“FDA”) in conjunction with the Federal Trade Commission ("FTC") has issued a warning to consumers to avoid Internet sites and other promotions for products that claim to diagnose, prevent, mitigate, treat or cure the 2009 H1N1 influenza virus, more commonly known as the Swine Flu.  Many of these deceptive products are being sold over the Internet, and the websites selling these products are hoping to take advantage of the public’s concerns about the Swine Flu pandemic sweeping the country and the world.  As such, in their desire to protect themselves and their families, consumers may be easily tricked into purchasing fraudulent products which claim to cure Swine Flu.

These deceptive products come in all varieties and could include dietary supplements or other food products, or products purporting to be drugs, devices or vaccines.   According to the FDA and FTC, such fraudulent products will not prevent the transmission of the virus or offer effective treatments against infections caused by the H1N1 influenza virus.  “Consumers who purchase products to treat the novel 2009 H1N1 virus that are not approved, cleared or authorized by the FDA for the treatment or prevention of influenza risk their health and the health of their families,” said Michael Chappell, acting FDA Associate Commissioner for Regulatory Affairs.

Consumers can visit the FDA and Centers for Disease Control and Prevention web sites for more information about the 2009 H1N1 influenza virus, and to determine which products the FDA has approved, cleared or authorized for use to diagnose, treat, prevent, mitigate or cure infections caused by H1N1 influenza virus.   Currently, there are only two antiviral drugs approved by the FDA for treatment and prophylaxis of the 2009 H1N1 influenza virus: Tamiflu (oseltamivir phosphate) and Relenza (zanamivir).

 If you have a purchased any products which claim fraudulently to diagnose, treat, prevent, mitigate or cure infections caused by H1N1 influenza virus, please contact us to discuss your legal options.

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