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FTC TO ACCEPT COMPLAINTS ABOUT MEDIA VIOLENCE
FTC is expanding its consumer complaint handling system to categorize and track complaints
about media violence, including complaints about the advertising,
marketing, and sale of violent movies, electronic games (including
video games), and music. The expanded complaint system is in response
to Congressional directives.
The expanded complaint handling system includes a new subject
area--media violence--and several new complaint categories designed
to track complaints regarding media violence, including complaints
ads for violent entertainment products airing or appearing in media
inappropriate for children;
ads containing an incorrect rating for violent content, or no rating
cross-marketing of violent entertainment products to children.
(FTC Release, FTC File No. P994511, March 17, 2004.)
FTC SEEKS COMMENTS ON SPAM REGULATION
FTC is seeking public comment on regulations regarding unsolicited commercial e-mail--spam. The
CAN-SPAM Act took effect January 1, 2004. It requires that FTC issue
regulations "defining the relevant criteria to facilitate the
determination of the primary purpose of an electronic mail message."
Since the CAN-SPAM Act applies almost exclusively to "commercial
electronic mail messages," defining the criteria used to determine
the "primary purpose" of an e-mail will clarify how to determine
whether the Act applies to certain electronic messages.
If you'd like to comment on these regs, you may file your comments
electronically via the federal government's centralized rulemaking
Web site, www.regulations.gov. FTC will post a "web form" at the site
to make it easier for you to address the various issues in the
Federal Register notice.
(FTC Release, FTC File No. R411008, March 10, 2004.)
BCP DIRECTOR DISCUSSES PROPOSED RESTRICTIONS ON FOOD ADS TO CHILDREN
Howard Beales, Director of FTC's Bureau of Consumer
Protection, at the 2004 Antitrust and Consumer Protection Symposium
sponsored by the George Mason University Law Review, examined FTC's
experience in the 1970's with a proposed ban on advertising to
children and the lessons to be learned from it.
In 1978, the FTC initiated a rulemaking known as "kidvid" to consider
a ban on advertising to children too young to understand the selling
purpose of advertising, as well as a ban on TV ads to kids 12 and
under for the foods most likely to cause tooth decay. FTC ultimately
terminated the rulemaking due to the legal and practical limitations
of the proposed restrictions, Beales noted.
Beales' remarks emphasized that FTC's experience in the kidvid
rulemaking was that bans on advertising foods to children raise
significant constitutional issues, as well as practical
implementation problems, while doing little to advance the goal of
reducing childhood tooth decay. Government should focus on other
more-effective efforts to reduce obesity, such as promoting
competition for more healthy food products among food manufacturers,
according to Beales.
(Remarks of Howard Beales, Director of FTC's Bureau of Consumer
Protection, at the 2004 Antitrust and Consumer Protection Symposium
sponsored by the George Mason University Law Review, March 12, 2004.)
FTC HALTS ALLEGEDLY FRAUDULENT COMPUTER BUSINESS
FTC a business with deceiving Spanish-speaking consumers who responded to its offer of a
complete computer system for three payments of $199 without a social
security number or credit check. FTC charged that despite defendants'
claims, they didn't deliver the entire computer at the time the first
payment was made. Instead, consumers opened their boxes and allegedly
found only keyboards, speakers, and other peripherals that would be
useless without the computer itself. Only then, FTC charged, did they
learn that they would not receive the full computer until all the
payments had been made. At that point, according to the FTC, some
consumers decided that they had been scammed and just gave up. Others
made the final two payments, which with shipping and handling totaled
more than $700, and ended up with junk computers that were salvaged
or damaged computers that did not work. A federal district court
issued a temporary restraining order halting defendants' business
practices and freezing their assets.
According to FTC's complaint, defendants Unicyber Technology, Inc.,
Unicyber Gilboard, Inc., and Chul K. Han advertised their computer
systems via Spanish-language television ads, claiming that they
offered a payment plan that did not require a social security number
or credit check. FTC charged that when consumers called a toll-free
number to order the system, defendants' sales representatives
repeated the claims made in the ads but informed consumers that the
installment payment amount was not $199, but instead was $245, due to
"shipping and handling" costs. In some cases, defendants' sales
representatives attempted to "upsell" consumers by pitching
additional peripherals, such as CD burners, or component upgrades,
such as larger monitors.
NOTE: The Commission files a complaint when it has "reason to
believe" that the law has been or is being violated, and it appears
to the Commission that a proceeding is in the public interest. The
complaint is not a finding or ruling that the defendant has actually
violated the law. The case will be decided by the court.
(Unicyber Technology, Inc., et al., FTC File No. 032 3186, Civ. No.
04-1569 LGB (MANx), March 18, 2004.)
VENDING MACHINE FRANCHISORS BANNED FROM MARKETING BUSINESS VENTURES
FTC accepted two separate settlements with the operators of
an allegedly bogus business opportunity venture. In separate
settlements, one settlement with Jesse Alper and the other settlement
with Inspired Ventures, Inc., Victor Alper, I.V.I. Management
Corporation, and Source Systems, Inc., defendants are banned from
marketing business ventures and from telemarketing. FTC alleged that
the defendants, engaged in deceptive business practices in the sale
of their vending machines. I.V.I. Management managed the advertising
for the scheme, and Source Systems supplied the bulk candy for the
FTC's complaint against the defendants was filed in June 2002, as
part of "Operation Busted Opportunity"--a coordinated attack on
business opportunities and work-at-home fraud by FTC, the Department
of Justice (DOJ), and 17 state law enforcement agencies.
According to the complaint, the defendants advertised their candy
vending machines, called "Sweet Tooth Sam, the Money Making Man," on
the Internet, in newspaper ads, and by telephone. The ads contained
statements that prospective buyers would receive "500% Profits" or
"$4000 per month."
FTC alleged that defendants' earnings claims were false and that
consumers didn't achieve the promised profits, but instead lost
thousands of dollars.
NOTE: These stipulated final judgments are for settlement purposes
only and do not constitute an admission by the defendants of a law
violation. Stipulated final judgments have the force of law when
signed by the judge.
(Inspired Ventures, Inc., et al., FTC Matter No. X020067, Civil
Action No. 02-CV-21760, March 3, 2004.)
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