Customers of Vacuum Cleaner and Air Filter to be Refunded
The US Federal Trade Commission (FTC) has announced that thousands of Oreck Corporation (Oreck) customers who purchased the Oreck Halo vacuum cleaner and the Oreck ProSheild Plus air cleaner will receive US$25 and US$24.65 for each product respectively, after the FTC found that Oreck “made false and unproven claims that the products could reduce the risk of flu and other illnesses, and eliminate virtually all common germs and allergens”. Oreck has also arrived at a settlement with the FTC, which bars it “from making any of the allegedly deceptive claims challenged by the agency unless it has competent and reliable scientific evidence to support the claims”.
FTC’s media release (21 May 2012)
FTC Settles Charges that Window Marketers Deceived Consumers
The US Federal Trade Commission (FTC) has announced that it has approved final orders settling claims that “Gorell Enterprises, Inc.; Long Fence & Home, LLLP; Serious Energy, Inc.; THV Holdings LLC; and Winchester Industries made exaggerated and unsupported claims regarding their windows’ efficiency and how much money consumers could save on their heating and cooling bills by having them installed”. The companies have been barred from making any further such deceptive claims for their products.
FTC’s media release (18 May 2012)
Juice Company Found to Have Deceptively Advertised Benefits of Products
The US Federal Trade Commission (FTC) has announced that its Chief Administrative Law Judge D. Michael Chappell has upheld an FTC complaint regarding deceptive advertising by POM Wonderful LLC, its sister company Roll Global LLC and their principals (the POM respondents). According to the FTC, the deceptive advertising included claims that “POM Wonderful 100% Pomegranate Juice and POMx supplements (POM products) would treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction”. The POM respondents would, under the Initial Decision (17 May 2012), be barred from making such representations unless “the POM respondents possess ‘competent and reliable scientific evidence . . . to substantiate that the representation is true’”. According to the FTC, “[t]he order also would bar the POM respondents from misrepresenting ‘the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research’”. The Initial Decision is now subject to review and can be appealed by the respondents.
FTC’s media release (21 May 2012)
Citigroup Fined US$3.5 Million for Providing Inaccurate Data
The United States (US) Financial Industry Regulatory Authority (FINRA) has announced that “it has fined Citigroup Global Markets, Inc. [US]$3.5 million for providing inaccurate mortgage performance information, supervisory failures and other violations in connection with subprime residential mortgage-backed securitizations (RMBS)”. According to FINRA executive vice president and chief of enforcement Brad Bennett, Citigroup failed to rectify incorrect data even after they discovered that it was inaccurate. Mr Bennett said that “[i]nvestors use this data to inform their decisions and in this case, for over six years, investors potentially used faulty data to assess the value of the RMBS”.
According to FINRA, inaccurate data was posted by Citigroup on its website from January 2006 to October 2007, “where it remained until early May 2012, even though the firm lacked a reasonable basis to believe that this data was accurate”, as it had been informed that the data posted was inaccurate. FINRA found that “Citigroup failed to supervise mortgage-backed securities pricing because it lacked procedures to verify the pricing of these securities and did not sufficiently document the steps taken to assess the reasonableness of traders’ prices”, also failing to maintain adequate records.
FINRA’s media release (22 May 2012)
Facebook Settles Case Involving User-referred Ads
Reuters reports that Facebook has arrived at a settlement with five Facebook members who sued the social networking site in 2011 over its “Sponsored Stories” section, which is “an ad that appears on a member’s Facebook page, and generally consists of another friend’s name, profile picture and an assertion that the person ‘likes’ the advertiser”. The plaintiffs reportedly claimed that the “Sponsored Stories” section “violates their right to publicity under California law”. According to Reuters, “the value of a ‘Sponsored Story’ advertisement is at least twice and up to three times the value of a standard Facebook.com ad without a friend endorsement” and US District Judge Lucy Koh “said the plaintiffs had articulated a coherent theory of how they were economically injured by the use of their names, photographs and likenesses”. The terms of the settlement have not been made publicly available, reports Reuters.
Reuters: Facebook settles lawsuit over “Sponsored Stories” (22 May 2012)