CONSUMER ALERT AG Ferguson to consumers: Hang-up on “tech support” phone scammers!

FOR IMMEDIATE RELEASE
September 17, 2014

SEATTLE — Attorney General Bob Ferguson is warning consumers that phone scammers posing as legitimate computer technicians are on the prowl in Washington and other states across the country.

“These scammers claim to be calling to help resolve problems that have been detected on the consumer’s personal computer, such as harmful viruses or malware,” warned Ferguson. “What they really want is access to your computer and, ultimately, your money.”

The phone scammers hunt for victims by “cold-calling” numbers they find in telephone directories and other public resources. The Consumer Protection Division of the Attorney General’s Office has received numerous complaints in recent months from consumers who have received these calls.

How the scam works

The “tech support” scam exploits consumer concerns about computer and online security.

The callers attempt to gain your trust with a fake identity and a barrage of technical language, saying that a problem has been detected on your computer.

They may ask you to perform a series of tasks that cause you to unknowingly allow the cyber criminals remote access to your PC and the personal data stored on it. You may also be tricked into installing malware that could steal your personal information.

The callers then claim to have identified the problem and demand payment to fix it with software updates, warranty extensions and other solutions. They offer to accept credit card payments over the phone, and may request payments via Western Union or Money Gram or direct the victims to fraudulent websites set up to collect personal and financial information.

“As with all scams, prevention is the best protection for consumers,” Ferguson said. “Don’t ever give any caller access to your computer, no matter who they say they are. Instead, hang-up!”

How to avoid the scam

The Attorney General’s Office offers tips on how to avoid this and other scams:

• Never give control of your computer to someone who calls you;
• Be vigilant in safeguarding personal information;
• Never give out passwords;
• Protect personal computers with legitimate and updated security software;
• Do not provide SSNs, banking, or credit card or other financial information to anyone who calls, no matter who they say they are; and
• Hang-up!

Consumers who suspect they may have been victimized should:

• Have a reputable computer technician remove any software that may have been added by the scammers;
• Change passwords;
• Contact your financial institution; and
• Monitor bank and credit card account activity.

The Attorney General’s Office also encourages anyone who receives such a call to file a complaint with the Federal Trade Commission (FTC).

AG Ferguson first to enforce federal law protecting online shoppers

FOR IMMEDIATE RELEASE
September 22, 2014

SEATTLE — In the first enforcement action of its kind, Attorney General Bob Ferguson is suing a Philadelphia-based online company for violations of the federal Restore Online Shopper’s Confidence Act (ROSCA) and the state’s Consumer Protection Act.

The Attorney General’s action was filed today in the United States District Court for the Western District of Washington against Internet Order LLC and its CEO, Daniel Roitman, doing business as Stroll. The company is accused of using deceptive marketing tactics to lure millions of customers nationwide, including more than 38,000 in Washington.

The company markets and sells foreign language audio courses online, mostly via the website www.pimsleurapproach.com. The courses are widely marketed under the brand name Pimsleur Approach with advertisements featuring their basic language program. The website and marketing promote the “Quick and Simple Course” with a low price “introductory offer” on a set of self-instruction CDs for “only $9.95.”

According to the lawsuit, consumers who purchased the introductory set for $9.95 were unknowingly and automatically enrolled in a “negative option” purchase plan, which obligated them to receive up to four advanced-level additional courses at a cost of $256 each.

In order to avoid charges, consumers were required to ship the advanced-level courses back to the company at their own expense within 30 days. If they failed to do so, they would be automatically charged $256 on the card they used to purchase the introductory “Quick and Simple Course.” The consumers’ total obligation under the negative option “Rapid Fluency Program” could amount to as much as $1,024.

“The company hid the terms of the negative option program in its advertising, and misled consumers into thinking they’d only ordered the inexpensive introductory course for $9.95,” said Ferguson. “Consumers were shocked to find significant charges appearing on their credit card statements for products they hadn’t ordered, and then angered when the company refused to cancel those charges.”

Although each program included a “100% money back guarantee” and a “risk free” 30-day trial, Ferguson alleges the company’s unfair policies made it unreasonably difficult for customers to cancel their enrollments or return items they hadn’t ordered.

Consumers were required to obtain special authorization from the company before they could ship back unordered products, were charged $64 “restocking” fees in some instances, and were subjected to high pressure sales tactics even after stating that they hadn’t ordered anything beyond the introductory course.

“To make matters worse, consumers who refused to pay were hounded with dunning letters and threatened with collection agency action,” Ferguson said.

The company is accused of:

• failing to clearly disclose the terms of its negative option sales program;
• failing to obtain agreement from consumers to sign up for the program;
• failing to provide simple mechanisms to cancel the program as required by law;
• making misrepresentations in the context of its advertising; and
• using unfair methods in its collection practices.

Washington is the first state to bring an action under ROSCA, which went into effect in December 2010. Senior Counsel Paula Selis is leading the case for Washington. The Pennsylvania Attorney General has also filed a lawsuit against the same company for violations of its state consumer protection laws.

Google to refund at least $19 million to Settle FTC Complaint It Unlawfully Billed Parents for Children’s Unauthorized In-App Charges

FTC Order Requires Google to Change Its Mobile App Billing Practices to Ensure Consumers’ Consent Is Obtained Before Charges Levied

For Release

September 4, 2014

Google Inc. has agreed to settle a Federal Trade Commission complaint alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices. Under the terms of the settlement, Google will provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers before charging them for items sold in mobile apps.

The Commission’s complaint against Google alleges that since 2011, Google violated the FTC Act’s prohibition on “unfair” commercial practices by billing consumers for charges by children made within kids’ apps downloaded from the Google Play store. Many consumers reported hundreds of dollars of such unauthorized charges, according to the complaint.

“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”

This marks the Commission’s third case concerning unauthorized in-app charges by children. In January, the Commission announced a settlement with Apple Inc., requiring Apple to provide full refunds to consumers who were billed for unauthorized charges by children – paying a minimum amount of $32.5 million – and obtain express, informed consent for in-app charges. And in July, the Commission filed a complaint in federal court against Amazon.com, Inc., similarly seeking full refunds for consumers and an order requiring informed consent for in-app charges.

In-app charges are a component of many apps available from Google Play and can range from 99 cents to $200. In many apps used by children, users are invited to accumulate virtual items that help them advance in the game, though as the FTC’s complaint notes, the lines between virtual money purchases and real money purchases can be blurred. The FTC’s complaint alleges that Google billed consumers for many such charges by children without obtaining account holders’ authorization, leaving consumers holding the bill.

When Google first introduced in-app charges to the Google Play store in 2011, the complaint alleges, Google billed for such charges without any password requirement or other method to obtain account holder authorization. Children could incur in-app charges simply by clicking on popup boxes within the app as they used it.

According to the complaint, in mid- to late 2012, Google began presenting a pop-up box that asked for the account holder’s password before billing in-app charges. The new pop-up, however, did not contain any information about the charge. Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.

During this time, many thousands of consumers complained to Google about children making unauthorized in-app charges, according to the complaint. Some parents noted that their children had spent hundreds of dollars in in-app charges without their consent. Others noted that children buying virtual in-game items with real money were unaware they were causing their parents to be billed.

Google employees referred to the issue as “friendly fraud” and “family fraud” in describing kids’ unauthorized in-app charges as a leading source of refund requests, according to the complaint. The complaint further alleges that Google’s practice has been to refer consumers seeking refunds first to the app developer.

The settlement will require Google to provide full refunds of unauthorized in-app charges incurred by children and to modify its billing practices to obtain express, informed consent from consumers before billing them for in-app charges. If the company gets consumers’ consent for future charges, consumers must have the option to withdraw their consent at any time.

The settlement requires Google to contact all consumers who placed an in-app charge to inform them of the refund process for unauthorized in-app charges by children within 15 days of the order being finalized. Google must make these refunds promptly, upon request from an account holder. Should Google issue less than $19 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission for use in providing additional remedies to consumers or for return to the U.S. Treasury.