FTC Makes Moves to Protect Senior Citizens

Advertising Law

In an effort to protect older consumers, the Federal Trade Commission filed a pair of actions challenging sweepstakes and tech scams.

The first case involved personalized, phony mailers sent to senior citizens with claims such as “Congratulations, You Have Just Won $1,230,946!” According to the complaint filed by the FTC and the Missouri attorney general, recipients not only had no prize waiting for them but also had to pay a fee ranging from $9 to $139.99 to learn that news.

The defendants—two individuals and related corporate entities—sent other phony missives that appeared to be notices that the consumer had won a prize of $1 million or more, but were actually newsletter subscription solicitations and flyers that claimed the recipient could win a substantial cash prize by answering a simple arithmetic question and paying a registration fee.

However, the flyer didn’t disclose that multiple rounds of the “game of skill” were required to win, the consumer had to pay additional fees to advance to each round, and the consumer had to answer a final, complex puzzle (that few, if any, could solve) in order to win, the FTC said.

The tens of millions of personalized mailers netted the defendants tens of millions of dollars, and many seniors paid the fee multiple times before realizing they were being scammed, the complaint alleged.

In a second case, the FTC told a California federal court that Parmjit Singh Brar and related companies violated the Telemarketing Sales Rule and Section 5 of the Federal Trade Commission Act by conning older consumers into buying unnecessary tech support services.

Telemarketers claiming to be from well-known technology companies called senior citizens and warned them that expensive security software was necessary to prevent a hacker from accessing their bank accounts, the FTC alleged. They claimed that the software was affiliated with the U.S. government. In reality, the software was old or worthless, the agency said, and was sometimes available for free or at a much lower cost.

In addition, the telemarketers connected remotely to consumers’ computers and sold their personal information, the FTC said. Some victims of the scam paid more than $50,000 to the defendants, and one individual paid almost $400,000 over a period of several years, according to the complaint.

To read the complaint in FTC v. Next-Gen, Inc., click here.

To read the complaint in FTC v. Genius Technologies, click here.

Why it matters: The two complaints were brought as part of an enforcement sweep led by the Department of Justice aimed at stopping illegal schemes that exploit older Americans, the FTC explained in a press release about the cases.



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