FTC, Canada bust internet scammers

Bitter medicine for pill racket


Working with Canadian law enforcement, the Federal Trade Commission is trying to shut down a Canadian-based online scam it says is worth US$450 million.

The scam has snared consumers in at least five countries – the US, the UK, Canada, Australia and New Zealand – by promising “free” or “risk-free” trials either of snake-oil cures or dodgy work-from-home schemes, the FTC says.

Other rackets operated by Jesse Willms through ten companies he controlled included access to government grants, free credit reports, and penny auctions*, the US regulator alleges.

People who signed on for the offers were usually asked for credit card details to cover shipping fees. They then found themselves paying through the nose, with credit charges showing up for the “free” offers, and frequently, recurring monthly charges (usually US$79.95).

“The defendants use the lure of a ‘free’ offer to open an illegal pipeline to consumers’ credit cards and bank accounts,” FTC Bureau of Consumer Protection director David Vladeck said.

In addition, the FTC alleges the Willms companies used false or misleading information to persuade merchant banks to keep their merchant facilities operating in spite of rising chargeback rates and consumer complaints.

The scams were promoted using popup ad marketing and spam.

Other defendants in the FTC’s Federal Court complaint include Peter Graver, Adam Sechrist, Brett Callister, and Carey Milne. Companies named in the complaint include Circle Media Bids, Coastwest Holdings, Farend Services, JDW Media, Net Soft Media, Sphere Media, and True Net, all registered in Canada. ®

*Penny auction: for those not familiar with this racket, the user buys the right to place one-cent bids for between US$0.50 and US$1. Each bid raises the price of an item by one-cent, but bidders have paid the bid purchase price for every bid they placed. ®

Similar topics

Broader topics


Other stories you might like

  • Abortion rights: US senators seek ban on sale of health location data
    With Supreme Court set to overturn Roe v Wade, privacy is key

    A group of senators wants to make it illegal for data brokers to sell sensitive location and health information of individuals' medical treatment.

    A bill filed this week by five senators, led by Senator Elizabeth Warren (D-MA), comes in anticipation the Supreme Court's upcoming ruling that could overturn the 49-year-old Roe v. Wade ruling legalizing access to abortion for women in the US.

    The worry is that if the Supreme Court strikes down Roe v. Wade – as is anticipated following the leak in May of a majority draft ruling authored by Justice Samuel Alito – such sensitive data can be used against women.

    Continue reading
  • FTC urged to protect data privacy of women visiting abortion clinics
    As Supreme Court set to overturn Roe v Wade, safeguards on location info now more vital than ever

    Updated Democrat senators have urged America's Federal Trade Commission to do something to protect the privacy of women after it emerged details of visits to abortion clinics were being sold by data brokers.

    Women's healthcare is an especially thorny issue right now after the Supreme Court voted in a leaked draft majority opinion to overturn Roe v Wade, a landmark ruling that declared women's rights to have an abortion are protected by the Fourteenth Amendment of the US Constitution.

    If the nation's top judges indeed vote to strike down that 1973 decision, individual states, at least, can set their own laws governing women's reproductive rights. Thirteen states already have so-called "trigger laws" in place prohibiting abortions – mostly with exceptions in certain conditions, such as if the pregnancy or childbirth endangers the mother's life – that will go into effect if Roe v Wade is torn up. People living in those states would, in theory, have to travel to another state where abortion is legal to carry out the procedure lawfully, although laws are also planned to ban that.

    Continue reading
  • FTC signals crackdown on ed-tech harvesting kid's data
    Trade watchdog, and President, reminds that COPPA can ban ya

    The US Federal Trade Commission on Thursday said it intends to take action against educational technology companies that unlawfully collect data from children using online educational services.

    In a policy statement, the agency said, "Children should not have to needlessly hand over their data and forfeit their privacy in order to do their schoolwork or participate in remote learning, especially given the wide and increasing adoption of ed tech tools."

    The agency says it will scrutinize educational service providers to ensure that they are meeting their legal obligations under COPPA, the Children's Online Privacy Protection Act.

    Continue reading
  • Elon Musk says Twitter buy 'cannot move forward' until spam stats spat settled
    A stunning surprise to no one in this Solar System

    Elon Musk said his bid to acquire and privatize Twitter "cannot move forward" until the social network proves its claim that fake bot accounts make up less than five per cent of all users.

    The world's richest meme lord formally launched efforts to take over Twitter last month after buying a 9.2 per cent stake in the biz. He declined an offer to join the board of directors, only to return asking if he could buy the social media platform outright at $54.20 per share. Twitter's board resisted Musk's plans at first, installing a "poison pill" to hamper a hostile takeover before accepting the deal, worth over $44 billion.

    But then it appears Musk spotted something in Twitter's latest filing to America's financial watchdog, the SEC. The paperwork asserted that "fewer than five percent" of Twitter's monetizable daily active users (mDAUs) in the first quarter of 2022 were fake or spammer accounts, which Musk objected to: he felt that figure should be a lot higher. He had earlier proclaimed that ridding Twitter of spam bots was a priority for him, post-takeover.

    Continue reading
  • FTC probes Broadcom for anti-competitive behavior again – reports
    Chip designer allegedly cites supply chain issues to lock customers in exclusively

    Chipmaker Broadcom is reportedly back under investigation with the US Federal Trade Commission (FTC) regarding complaints it is illegally forcing exclusivity agreements with customers.

    According to The Intercept, Broadcom is justifying the actions by claiming they are necessary thanks to supply-chain issues. The FTC is allegedly in the early days of gathering information, doing so by taking testimony and collating documents.

    The report comes less than 6 months after the FTC issued an order [PDF, since deleted from the FTC's website] to curb anticompetitive behavior from the company, including exclusivity agreements or retaliation against customers who shop around for their chips.

    Continue reading
  • FTC sues Intuit for false advertising, says 'free' TurboTax isn't always free
    Folks fill out online forms only to be told to upgrade to paid versions

    Intuit, makers of the tax-filing software TurboTax, deceives folks with false advertising and claims its product is free to use when it isn't always free, the US Federal Trade Commission claimed in a lawsuit filed Monday.

    “TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, director of the FTC's Bureau of Consumer Protection. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.”

    Tens of millions of US citizens and other taxpayers use TurboTax to file their annual tax returns. The program helps peeps prepare documents, and automatically estimates any tax refunds or rebates they might be eligible to receive. Intuit produces TurboTax's Free Edition software, claiming users filing simple tax returns don't have to pay anything to use it at all. 

    Continue reading
  • CafePress fined for covering up 2019 customer info leak
    Watchdog demands $500,000 after millions of people's info stolen and sold

    The FTC wants the former owner of CafePress to cough up $500,000 after the customizable merch bazaar not only tried to cover up a major computer security breach involving millions of netizens, it failed to safeguard customers' personal information.

    In a complaint [PDF] filed against CafePress former owner Residual Pumpkin Entity and PlanetArt, which bought the platform in 2020, the FTC alleges multiple instances of shoddy security practices at the online biz. In a settlement proposed by the US watchdog, Residual Pumpkin will pay up the half-million dollars.

    The complaint highlighted that in February 2019 criminals stole, and then sold on the dark web, a treasure trove of personal information they found relatively easily on CafePress systems. This data included: more than 20 million unencrypted email addresses and encrypted passwords; millions of unencrypted names, physical addresses, and security questions and answers; more than 180,000 unencrypted Social Security numbers; and the last four digits of for tens of thousands of credit cards.

    Continue reading

Biting the hand that feeds IT © 1998–2022