Kennyhertz Perry Client Alert: FTC v. Applied Marketing Sciences, LLC, et al. Update

In early October 2014, the Federal Trade Commission (FTC) and Defendants Applied Marketing Sciences, LLC, Standard Registration Corporation, Worldwide Information Systems, Incorporated, and Liam O. Moran stipulated to an Order for Permanent Injunction and Monetary Judgment for violations of Section 5 of the FTC Act, 15 U.S.C. §45. The Complaint charged that the defendants participated in deceptive acts or practices in the advertising, marketing, promoting, offering for sale, or selling of prize promotions.

The FTC sued because the above-named defendants were running a sweepstakes in which consumers would receive personalized mailings advising that they had won a cash prize not more than $2 million, and that they needed to pay a twenty or thirty dollar fee to collect their prize. The consumers who paid the fee, mostly individuals over the age of 65, received nothing in return.

Federal Trade Commission Staff Test-Shopping Data Brokers

In May, the Federal Trade Commission (FTC) sent warning letters to 10 of the 45 data broker companies following a test-shopping operation, warning that their practices could violate the Fair Credit Reporting Act (FCRA).

The test-shopping operation was performed by non-attorney FTC staff members posing as individuals or representatives of companies seeking information about consumers to make decisions related to their creditworthiness, eligibility for insurance or suitability for employment.