uIdentity Theft Company LifeLock Once Again Failed To Actually Keep Identities Protected, Must Pay $100Mr

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• Five months after federal and state regulators accused identity theft protection company LifeLock of violating a 2010 settlement in which it paid $11 million for allegedly using false claims regarding effectiveness of its services, the company has been ordered to pay $100 million in penalties and refunds for once again misleading consumers. 

  The Federal Trade Commission announced the new settlement [PDF] today after finding that from at least October 2012 to March 2014, LifeLock violated four components of its previous agreement.

  Under the previous deal, LifeLock was barred from making deceptive claims about services and was required to take more stringent measures to safeguard the personal information it collects from customers.

  LifeLock had essentially promised not to misrepresent that its services offer “absolute protection against identity theft because there is, unfortunately, no foolproof way to avoid ID theft.”

  But those are promises LifeLock hasn’t abided by, the FTC claims in its recently filed order.

  According to the FTC, LifeLock failed to establish and maintain a comprehensive information security program to protect users’ sensitive personal information, including their social security, credit card and bank account numbers.

  Despite these failings, the company routinely advertised that it protected consumers’ sensitive data with the same high-level safeguards used by financial institutions.

  From January 2012 through December 2014, the FTC alleges that LifeLock falsely advertised it would send alerts “as soon as” it received any indication that a consumer may be a victim of identity theft.

  Additionally, the complaint states that LifeLock violated its previous order by failing to establish and maintain a comprehensive information security program to protect its users’ sensitive personal data, including credit card, social security, and bank account numbers.

  News of a settlement between the FTC and LifeLock is a bit of a surprise. When regulators filed action against the company in July, LifeLock said the two parties had gotten to that point because there was no way to reach an agreement outside of a court of law.

  “We disagree with the substance of the FTC’s contentions and are prepared to take our case to court,” the company said in a statement at the time. “LifeLock takes the accuracy of our advertising materials very seriously. The alerting claims raised by the FTC did not result in any known identity theft for LifeLock members.”

  Under the new settlement, in which LifeLock neither admits nor denies allegations, the company must deposit $100 million into the registry of the U.S. District Court for the District of Arizona. Of that $100 million, $68 million may be used to redress fees paid to LifeLock by class action consumers who were allegedly injured by the same behavior alleged by the FTC.

  Any funds not received by consumers in the class action settlement or through settlements between LifeLock and state attorneys general will be provided to the FTC for use in further consumer redress.

  In addition to the monetary settlement, the 2010 order’s stipulations on record keeping have been extended to 13 years from the date of the original order.

  
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by Ashlee Kieler via Consumerist

uWashington Attorney General Sues Tech Support Company For Scamming Customersr

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  When your work computer goes wonky, you call IT. That’s easy enough. When it’s your home computer, though, the choices are a lot murkier. There are thousands of sources for tech support out there, from one-person operations to giant call centers. But if you don’t have enough technical know-how, it can be hard to tell which ones are actually helping, and which ones are just out to scam a quick buck.

  If you’re one of the three million customers who called iYogi for any help, unfortunately, they may have been the latter, the Associated Press reports. The company, based in India but with a presence in the U.S., has become the target of an investigation and lawsuit by the Washington state attorney general.

  Attorney General Bob Ferguson’s office filed the suit this week. In it, Ferguson contends that iYogi representatives defrauded consumers in multiple ways. The company charged consumers between $80 and $199 to upgrade their systems from Windows 7 to Windows 10, for example, despite the fact that Microsoft explicitly offers all home Windows users that upgrade for free.

  Ferguson also told reporters that iYogi representatives, after gaining remote access to a computer (a legitimate support need) would then generate fake, flashing warnings about viruses and tell customers they would need to pay between $80 or $380 to have the “virus” repaired.

  “After gaining remote access to the consumer’s computer, iYogi identifies complex-looking files and claims these infected files harm the computer,” Ferguson said. “iYogi misleads the consumer into believing he or she must download iYogi’s diagnostic software to fully identify these alleged computer problems.”

  iYogi also falsely indicates that it is affiliated with major tech companies including HP, Microsoft, and apple, the complaint says. The opposite appears to be true: a Microsoft executive joined the press conference to say that iYogi is one of the businesses that Microsoft receives the most complaints about.

  The company was supposed to open up a U.S. call center in Maine last summer, but after a three-month trial the American partner they were working with called off the deal, and has since filed suit against iYogi for nonpayment.

  Washington state sues firm, alleges tech support scam [AP]

  
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by Kate Cox via Consumerist

uCarHop Must Pay $6.4 Million In Penalties For Jeopardizing Consumers’ Credit With Inaccurate Reportsr

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• CarHop, one of the country’s largest “buy-here, pay-here” auto dealers, promotes itself as a company that offers fast approval for “just about anyone, despite bad or no credit.” While the company prides itself on the ability to help consumers, federal regulators say the dealer and its financing arm often did more harm than good when it came to reporting on customers’ credit behavior. To that end, CarHop must pay $6.4 million in penalties for providing damaging, inaccurate consumer information to credit reporting agencies (CRAs). 

  The Consumer Financial Protection Bureau announced today that it had taken action against CarHop, and its affiliated financing company, Universal Acceptance Corporation, for jeopardizing consumers’ credit.

  According to the CFPB’s consent order [PDF], Minnesota-based CarHop and its financing arm inaccurately reported information for more than 84,000 accounts on a widespread and systemic basis.

  The company, also known as Interstate Auto Group, operates 50 retail locations in approximately 15 states, selling vehicles primarily to customers with nonexistent or poor credit histories in need of subprime or deep subprime credit.

  CarHop markets itself to these customers as a way for them to rebuild or build up good credit by promising to provide positive payment histories to credit reporting agencies.

  “CarHop represented in writing to consumers that it reports ‘good credit’ to the credit reporting companies,” the CFPB claims, noting that the company emphasized to consumers its part in helping them to maintain good credit.

  To that end, Universal Acceptance Corp., on behalf of CarHop, furnished consumer account information to all three major CRAs. However, despite the company’s promises of good credit reporting, the CFPB found that the company reported information that it knew or had reasonable cause to believe was inaccurate.

  From January 2009 to September 2013, the company inaccurately furnished information for more than 84,000 customers.

  Included in the inaccurately reported information was consumers’ rates of repossession. Under CarHop’s policy, customers could voluntarily return their vehicles within 72 hours of purchase for a full refund without any penalties.

  While the policy was helpful for some customers, in many cases Universal Acceptance Corporation did not accurately report to the credit reporting companies what really happened. Instead, the company inaccurately reported on numerous occasions that the cars had been repossessed or that the consumer still owed money.

  Additionally, Universal Acceptance incorrectly reported that customers still owed money to CarHop, despite having sent the individual documentation that they no longer had a financial obligation.

  “For hundreds of customers, in the months or even years that followed after they returned their vehicles, Universal Acceptance Corporation inaccurately furnished, on a monthly basis, information that said that the customer still had an outstanding balance,’ the CFPB states. “Sometimes, the company inaccurately reported the amount past due in continuously increasing amounts.”

  In many cases, the CFPB found that CarHop customers were unaware that their credit was being damaged by the erroneous reports.

  “Almost all the information the companies inaccurately furnished to the credit reporting companies could potentially harm customers,” the order states. “The negative information could lower a consumer’s credit score, hamper their ability to obtain other credit, and hurt their job prospects.”

  Under the CFPB’s consent order, CarHop must pay $6.4 million in penalties to the CFPB’s Civil Penalty Fund.

  In addition to the fine, the companies must cease misrepresenting that they will report “good credit,” correct credit reporting information, and provide credit reports to harmed consumers.

  
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by Ashlee Kieler via Consumerist

uHampton Creek: FDA Grants Condiment Dispensation, Eggless “Just Mayo” Can Keep Its Namer

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• An ongoing battle about the nature of mayonnaise that began in November 2014 seems to have finally reached a peaceful resolution: the Food and Drug Administration has decided to allow Just Mayo, sold by Hampton Creek, call itself “mayo,” even though the vegan, eggless product technically isn’t mayonnaise, according to the government’s definition.

  Hampton Creek says it worked out an agreement with the FDA that will allow Just Mayo to keep its name, as long as it makes a few tweaks to the label. The two sides are finally coming to terms after the FDA sent a warning letter to the company in August, saying Just Mayo was misbranded because mayonnaise must contain eggs.

  The FDA hasn’t confirmed or denied the news, but Hampton Creek is sharing its triumph with the world/anyone who cares about mayonnaise and mayonnaise-like spreads.

  “This isn’t a story about winning or losing. It’s a story about creating a just food system. A food system that is healthier and stronger and more aligned with our values,” said Hampton Creek CEO and founder Josh Tetrick in a statement to Consumerist. “It’s a story about a group of professionals and a young company thoughtfully engaged in that mission.”

  Here’s how the label will change: Hampton Creek is defining the word “just” on the central panel of the label, and will explain what that means, in its own terms, on the left panel.

  

  It’s been a long road for Just Mayo: the brouhaha over its name originally started when Unilever, maker of Hellmann’s mayonnaise, sued Hampton Creek in November 2014 over claims of false advertising.

  Though Hellmann’s later backed off and dropped its suit, the FDA picked up the scent and ran with it, issuing a warning latter in August that Just Mayo was not, in fact, mayonnaise.

  Since then, news surfaced that the American Egg Board was on an anti-Just Mayo mission, a crusade, which when revealed, prompted the group’s head to step down.

  In October, Hampton Creek explained to the FDA that just because its name includes the word “mayo” right there on the label, Just Mayo isn’t necessarily mayonnaise. Because “mayo” isn’t a regulated term, calling the eggless product as such shouldn’t be an issue, Hampton Creek had argued.

  “The term ‘mayo’ should not now be held to the regulatory standard for ‘mayonnaise,’” wrote the company’s lawyer, Josh Schiller.

  It appears the FDA was okay with that explanation, which brings us to today, when mayo can be eggless, but mayonnaise, ostensibly, must still contain eggs. We’ve reached out to the FDA on that point, and will update this post if and when we hear back.

  We also reached out to Zack Mayo (link has video with curse words)– he IS an officer and a gentleman, after all — and hope he’ll weigh in.

  
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by Mary Beth Quirk via Consumerist

u39% Of All U.S. Money Spent At Online Stores Goes To Amazonr

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  If you’ve placed an online order for a gift or for a self-gift this holiday season, it most likely came from Amazon. How likely is it? According to statistics released this week, 39.3% of all money spent by Americans shopping online is spent at Amazon, which is more than the next 20 biggest sellers in e-commerce combined.

  Amazon has been playing a long game, investing in warehouses and infrastructure to get packages to their customers in shorter and shorter timeframes, all the way down to stocking thousands of items in cities that offer Prime New delivery within an hour. When you can have a new TV or a case of paper towels delivered in less time than it takes to receive a pizza sometimes, why would you want to shop anywhere else?

  There are recent reports that Amazon wants to take over even more of the chain that moves items from their suppliers to your doorstep: they’ve deployed their own fleet of trucks and drivers to move items between their own facilities. There’s even speculation that an air cargo facility in Ohio that once belonged to DHL’s domestic shipping operation is now being used by Amazon to move cargo around faster.

  Not packages, necessarily, but cargo: they’re moving items between Amazon facilities, maybe so they can have things ready for you before you’ve even ordered them.

  Amazon Is Capturing Bigger Slice of U.S. Online Holiday Spending [Bloomberg News]

  
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by Laura Northrup via Consumerist

uCEO Who Hiked Price Of Drug By Over 5400% Arrested In Unrelated Securities-Fraud Investigationr

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  Three months after Turing Pharmaceuticals entered the spotlight by buying the rights to a generic drug used to save lives and dramatically increased the price from $13.50 to $750, the company’s CEO has been arrested in a securities-fraud investigation. However, the charges are related to another company the man once led. 

  Bloomberg reports that Martin Shkreli was arrested Thursday morning in connection with a securities-fraud investigation into his actions as CEO for biotech company Retrophin.

  The 32-year-old founded Retrophin in 2011 and served as CEO until he was ousted from the company in 2014.

  Retrophin replaced Shkreli because of “serious concerns about his conduct,” the company said in a statement.

  Shkreli has reportedly been charged with illegally taking stock from Retrophin, a company he started in 2011, and using it to pay off debts from unrelated business dealings, Bloomberg reports.

  This isn’t Shkreli’s first issue stemming from his tenure with Retrophin. From September 2014 to December 2014, he was named in four lawsuits filed by the company’s investors.

  Bloomberg reports that these cases accused him of having profited through insider trading and making “materially false and misleading statements” that “artificially inflated” the company’s stock price.

  Two of the suit remain ongoing, while one was dismissed and another is in private mediation.

  In a related case, Shkreli is being sued for $65 million in damages by Retrophin. The suit accuses Shkreli of engaging in multiple “self-dealing schemes” while he was at the company, Bloomberg reports.

  U.S. Attorney Robert Capers is expected to talk more about the case during a press conference on Thursday.

  Shkreli gained national attention back in September when the company he leads, Turing, bought the rights to Daraprim — an anti-parasitic used to treat malaria and toxoplasmosis. Shortly afterwards, the per-pill price skyrocketed from $13.50 to more than $750.

  Turing defended the price hike by saying it was going to use the money to invest in research for a better drug to treat the same diseases. But some physicians countered that Daraprim has been used for 60 years and there is no urgent need for a replacement.

  A Senate committee announced it had opened an investigation into the pricing increase, sending letters requesting documents from four pharmaceutical companies regarding their sky-high price increases on certain prescription drugs.

  Shkreli, CEO Reviled for Drug Price Gouging, Arrested on Securities Fraud Charges [Bloomber]

  
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by Ashlee Kieler via Consumerist

uCPSC Intensifies Investigation Into Exploding “Hoverboards,” USPS Restricts Shipmentsr

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• One of the holiday’s hottest gifts has gotten a bit too hot, literally. Following claims that so-called “hoverboard” scooters have caught fire while charging, retailers have pulled the popular devices to ensure they’re safe. In the meantime, the country’s top product safety regulator says his agency is working “non-stop” to find the root cause for the fire hazards linked to the self-balancing scooters. 

  Elliot Kaye, Consumer Product Safety Commission Chairman, said on Wednesday that he directed agency staff to intensify their investigation into the safety of hoverboards.

  “The challenge is to move quickly but also thoroughly and carefully to find out why certain hoverboards caught fire,” Kaye said in a statement. “Every consumer who is riding a hoverboard, who purchased one to give as a gift during the holidays, or who is thinking about buying one deserves to know if there is a safety defect.”

  For now, the agency is actively investigating hoverboard-related fires across the country, but Kaye failed to specify just how many fires have been reported to the CPSC.

  The CPSC has both purchased new hoverboards and taken possession of those that have caught fire to better determine what causes the hazard.

  Engineers at the National Product Testing and Evaluation Center are testing and will continue to test new and damaged boards, Kaye said, noting that staff is looking particularly closely at the configuration of the battery packs and compatibility with the chargers.

  Although the safety of hoverboards has largely centered on fire risks lately, Kaye took time to remind consumers that there are other risks, specifically that of falls.

  “I do not want to downplay the fall hazard,” he said. “CPSC has received dozens of reports of injuries from hospital ERs that we have contracts with and they continue to feed us real-time data.”

  Some of those injuries have been serious, including concussions, fractures, contusions/abrasions, and internal organ injuries.

  The agency reminded scooter riders to always wear a proper helmet and padding while using the device, and offered a list of tips that can reduce the risk of an incident.

  People who encounter an issue with their hoverboard are urged to file a report with the CPSC.

  “We know this is a popular product during this holiday season, and we are doing everything possible to determine if consumers are at risk,” Kaye said. “We will keep the public up-to-date with new information as it becomes available.”

  In other hoverboard news, the United States Postal Service announced on Thursday that it will only ship the scooters via ground service.

  “Effective immediately and until further notice, USPS will ship hoverboards using only Standard Post/Parcel Select,” the USPS said in a statement. “This product travels on ground transportation, due to the potential safety hazards of lithium batteries.”

  Issues with hoverboards first started popping up this fall when authorities in the U.K. began to intensify their oversight of the products. Most recently, Amazon’s U.K. arm began offering refunds to customers and urging them to throw away their scooters following safety concerns in the country, Newsweek reports.

  Prior to that, the company pulled several hoverboard brands from its U.S. marketplace, directing manufactures to provide documentation on safety standards. On Wednesday, Target followed suit removing several Swagway-branded boards from its website.

  
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by Ashlee Kieler via Consumerist