Lionheart Group Scam Prevention Toolkit » consumers

NEW FTC Rule to Protect Consumers in Credit Card Debt

Fri, 30 Jul 2010 17:01:33 +0000

Amendments to Telemarketing Sales Rule Prohibiting Debt Relief Companies From Collecting Advance Fees Will Take Effect in October 2010 Starting on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt. “At the FTC we strive every day to make sure America’s middle class families get straight deals for their dollars,” Chairman Jon Leibowitz said. “This rule will stop companies who offer consumers false promises of reducing credit card debts by half or more in exchange for large, up-front fees. Too many of these companies pick the last dollar out of consumers’ pockets – and far from leaving them better off, push them deeper into debt, even bankruptcy.” Three other Telemarketing Sales Rule provisions to take effect on September 27, 2010, will: require debt relief companies to make specific disclosures to consumers; prohibit them from making misrepresentations; an extend the Telemarketing Sales Rule to cover calls consumers make to these firms in response to debt relief advertising. The Final Rule covers telemarketers of for-profit debt relief services, including credit counseling, debt settlement, and debt negotiation services. The Final Rule does not cover nonprofit firms, but does cover companies that falsely claim nonprofit status. Over the past decade, the FTC and state enforcers have brought a combined 259 cases to stop deceptive and abusive practices by debt relief providers that have targeted consumers in financial distress. Advance Fee Ban The Final Rule contains specific requirements for debt relief providers related to charging an advance fee before providing any services. It specifies that fees for debt relief services may not be collected until: the debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts; there is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it; and the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider. To ensure that debt relief providers do not front-load their fees if a consumer has enrolled multiple debts in one debt relief program, the Final Rule specifies how debt relief providers can collect their fee for each settled debt. First, the provider’s fee for a single debt must be in proportion to the total fee that would be charged if all of the debts had been settled. Alternatively, if the provider bases its fee on the percentage of what the consumer saves as result of using its services, the percentage charged must be the same for each of the consumer’s debts. Dedicated Account for Fees and Savings Another new provision of the Final Rule will allow debt relief companies to require that consumers set aside their fees and savings for payment to creditors in a “dedicated account.” However, providers may only require a dedicated account as long as five conditions are met: the dedicated account is maintained at an insured financial institution; the consumer owns the funds (including any interest accrued); the consumer can withdraw the funds at any time without penalty; the provider does not own or control or have any affiliation with the company administering the account; and the provider does not exchange any referral fees with the company administering the account. Disclosures and Prohibited Misrepresentations Under the Final Rule, providers will have to make several disclosures when telemarketing their services to consumers. Before the consumer signs up for any debt relief service, providers must disclose fundamental aspects of their services, including how long it will take for consumers to see results, how much it will cost, the negative consequences that could result from using debt relief services, and key information about dedicated accounts if they choose to require them. The Final Rule also prohibits misrepresentations about any debt relief service, including success rates and whether the provider is a nonprofit entity. The FTC’s Statement of Basis and Purpose, which accompanies the Final Rule, provides extensive guidance about the evidence providers must have to make advertising claims commonly used in selling debt relief services. The Rulemaking Process In August 2009, the FTC published in the Federal Register a notice of proposed rulemaking proposing amendments to the Telemarketing Sales Rule and requesting public comments. Over 300 commenters, representing a wide variety of stakeholders, submitted comments in response. The Commission also held a public forum on the proposed amendments on November 4, 2009. The FTC developed the Final Rule based on the public comments, the record of the public forum and the FTC’s September 2008 Workshop on the debt settlement industry, recent testimony before Congress, and law enforcement actions brought by the Commission and the states. Information for Businesses Today, the FTC staff issued a compliance guide to help businesses comply with the new debt relief rules. The compliance guide describes the key changes to the Telemarketing Sales Rule affecting debt relief services, helps businesses determine if they are covered by the new rules, details information that covered entities must disclose to customers, and discusses how fees may now be collected. It can be found at http://www.ftc.gov/bcp/edu/pubs/business/marketing/bus72.pdf on the agency’s website and is linked to this press release. The FTC vote approving publication of the Federal Register notice was 4-1, with Commissioner J. Thomas Rosch voting no. The notice will be published in the Federal Register shortly, and is available now on the FTC’s website at http://www.ftc.gov/os/2010/07/R411001finalrule.pdf . The provisions of the Final Rule will take effect on September 27, with the exception of the advance fee ban provision, which will take effect on October 27. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm .

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NEW FTC Rule to Protect Consumers in Credit Card Debt

Websites Warned That Offer ‘Free’ Credit Reports Must Disclose Federally Mandated Free Reports or Face Prosecution

Fri, 23 Jul 2010 15:20:29 +0000

The Federal Trade Commission is warning 18 Internet websites offering free credit reports that they must clearly disclose that a free report is available under federal law. The FTC’s recently amended Free Credit Reports Rule, which took effect April 2, 2010, requires certain disclosures to help consumers distinguish between ads for free credit reports that often require them to buy credit monitoring or other services, and the federally mandated no-strings-attached credit reports available at AnnualCreditReport.com or 877-322-8228. For example, websites offering free credit reports must have a disclosure, with links to AnnualCreditReport.com and FTC.gov , that appears across the top of each page that mentions free credit reports. Violators are subject to legal action that can result in penalties of up to $3,500 per violation. The Commission vote to publicly disclose the warning letters was 5-0. Warning letters are being sent to the following: Company Name / Websites National Credit Report.Com LLC NationalCreditReport.com Quinstreet, Inc. FreeCreditReport4U.com MyCreditCenter.Com, Inc. MyCreditCenter.com, 3CreditReport.com, OnlineFreeCreditReports.com Vertrue, Inc. My3BureauCreditReport.com, FreeScore.com, Free3BureauCreditReport.com, FreeTripleCreditScore.com, FreeOnlineReportNow.com ConsumerTrack, Inc. GoFreeCredit.com, FreeCredit-Reports.net, Free-Credit-Reports-Repair.com ConsumerDirect, Inc. FreeCredit-Report.net, SmartCredit.com Mighty Net, Inc. 3FreeCreditReportsUSA.com Amie Nguyen AllFreeCreditReports.com Amanda Raab FreeCreditReportsUSA.com Information in credit reports may affect whether consumers can get a loan or a job, so it is important for consumers to check their reports and correct any inaccurate information. Consumers can learn more about their right to a free credit report under federal law at http://www.ftc.gov/freereports .

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Websites Warned That Offer ‘Free’ Credit Reports Must Disclose Federally Mandated Free Reports or Face Prosecution

Dietary Supplement Maker to Pay $5.5 Million to Settle FTC False Advertising Charges

Thu, 15 Jul 2010 11:14:54 +0000

As part of its ongoing efforts to stop bogus health claims, the Federal Trade Commission is requiring a major marketer of dietary supplements to pay $5.5 million to settle charges that it falsely advertised that its supplements could help consumers lose weight and treat or prevent colds and other illnesses. The $5.5 million will be used for refunds to consumers who purchased Accelis, nanoSLIM, and any Cold MD, Germ MD, and Allergy MD product.

Federal Trade Commission Proposals to Reform the Debt Collection Industry

Wed, 14 Jul 2010 11:35:18 +0000

The Federal Trade Commission has made recommendations to fix the badly broken debt collection industry, especially debt litigation and arbitration. One of the biggest problems is that debt collection attorneys file complaints against consumers and upwards of 90 percent of the time have no physical proof that a debt is owed or that they are suing the proper person(s). These sorts of questionable debt collection lawsuits are exactly why the book “ Stick it To Sue Happy Debt Collectors ” was written. The book levels the playing field and gives consumers a very high chance of beating erroneous and highly questionable lawsuits in court. The book is written in an easy to understand manner and simplified steps on fighting debt collectors and their attorneys.

Georgia’s JAK Productions Inc to Pay $300,000 for Abandoning Millions of Telemarketing Calls

Wed, 30 Jun 2010 16:41:41 +0000

Still Having Wages Garnished by Mann Bracken Debt Judgment? Here is What to Do

Mon, 21 Jun 2010 19:42:00 +0000

According to an attorney that is suing Mann Bracken on behalf of a consumer, Cory Zaidel has stated that consumers that are under a wage garnishment by Mann Bracken should file a motion to quash (set aside) the garnishment as the money being garnished may not be going to the creditor or debt buyer that obtained a judgment against them. “The claims are mounting,” said Towson consumer attorney Cory L. Zajdel, who is representing a Howard County woman in a suit against Mann Bracken for allegedly unfair debt-collection practices. Consumers whose wages are still being docked should file paperwork to quash the garnishment with the court that handled the case, Zajdel said. Maryland’s district courts have the necessary forms, he said. His concern is that money going to the defunct Mann Bracken might not make it to the creditors. ~ Baltimore Sun In addition the court appoint receiver for now defunct Mann Bracken may sue ‘parties’ that may have caused the demise of Mann Bracken. My personal opinion (Allen Harkleroad, author of Stick it to Sue Happy Debt Collectors ) would be to file a motion to Quash and/or a Motion to Vacate any prior judgments that Mann Bracken may have obtained against consumers, especially judgments with wage garnishments.

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Still Having Wages Garnished by Mann Bracken Debt Judgment? Here is What to Do

More Than A Dozen Marketers Banned from Selling Mortgage Relief Services; Repeat Offender Ordered to Pay $11.4 Million for Contempt

Fri, 18 Jun 2010 11:36:36 +0000

As part of the agency’s continuing crackdown on scams that prey on financially distressed homeowners, the Federal Trade Commission announced legal actions against more than a dozen marketers accused of pitching bogus mortgage modification or foreclosure relief services. FTC settlement orders ban 16 marketers from the mortgage modification or foreclosure relief business. The promoter of a similar scam has been ordered to pay $11.4 million for flouting a previous court order. And, in a new action, the FTC has charged another online marketing operation with masquerading as a government mortgage assistance program. The FTC settled with the following defendants, all of whom charged consumers up-front fees and made false promises that they could get their loans modified or prevent foreclosure: Making Home Affordable. The FTC alleged that the defendants impersonated MakingHomeAffordable.gov, a federal government Web site that helps eligible homeowners refinance or modify their mortgages. Defendants Sean Cantkier, Michael Haller, Alan LeStourgeon, Greg Rivera, Lisa Roye, and Jeffrey Altmire bought advertising links on the results pages of Internet search engines, and consumers looking for “making home affordable” were diverted to commercial Web sites that pitched loan modification services or sold consumers’ personal information to marketers of such services. (7/10/2009 release http://www.ftc.gov/opa/2009/07/homeafford.shtm ) The defendants will have to give up their ill-gotten gains, ranging from $1,523 to $29,179. Separately, the Commission authorized and the court approved the addition of two counts to the complaint against Scot Lady and dismissed Kean Lee Lim as a defendant. The documents were filed in the U.S. District Court for the District of Columbia. Federal Loan Modification Law Center. Defendants Nabile (“Bill”) Anz, Federal Loan Modification Law Center LLP, Anz & Associates PLC, Venture Legal Support PLC, and Jeffrey Broughton settled FTC charges that they hawked their so-called “Federal Loan Modification program” in a national advertising campaign targeting financially distressed homeowners. They charged up to $3,000, much of which they required up-front, but Federal Loan Modification often failed to live up to the promised results, according to the FTC’s complaint. (06/26/2009 release http://www.ftc.gov/opa/2009/06/fedloanmod.shtm ) In addition to the ban on selling mortgage relief services, the settlement order against Anz, Federal Loan Modification Law Center, Anz & Associates, and Venture Legal Support imposes a $10.8 million judgment, and the order against Broughton imposes a $11.1 million judgment. The judgments are suspended based on their inability to pay. The full judgments will become due immediately if they are found to have misrepresented their financial condition or receive any money from the remaining defendants. The order was filed in the U.S. District Court for the Central District of California. The FTC continues to pursue its case against five other defendants. Apply2Save. Derek R. Oberholtzer, Apply2Save Inc., and Sleeping Giant Media Works, Inc. allegedly charged consumers up to $995 in advance for promised mortgage loan modification services. Once they were paid, they often failed to answer or return consumers’ telephone calls and sometimes falsely blamed delays on lenders, even though they had made little or no effort to contact lenders, the FTC charged. Most consumers who got loan modifications or avoided foreclosure did so only through their own efforts. (7/15/2009 release http://www.ftc.gov/opa/2009/07/loanlies.shtm ) The defendants have filed for bankruptcy. The order imposes a judgment of more than $4 million, which is suspended based on their inability to pay. The full judgment will become due immediately if they are found to have misrepresented their financial condition. The order was filed in the U.S. District Court for the District of Idaho. New Hope Modifications. Brian Mammoccio and Donna Fisher have settled charges that they falsely claimed they could obtain mortgage loan modifications for consumers in all or virtually all cases, falsely promised a money-back guarantee, and masqueraded as part of the federally-endorsed HOPE NOW Alliance mortgage assistance network. According to the FTC complaint, in many cases, after consumers paid up-front fees, the defendants failed to return their phone calls, or falsely told them that negotiations were proceeding smoothly. In many instances, consumers learned from their lenders that the defendants had not contacted them. (3/24/2009 release http://www.ftc.gov/opa/2009/03/newhope.shtm ) In addition to the ban on selling mortgage relief services, the settlement order imposes a judgment of almost $3.9 million, which will be suspended when the defendants surrender their assets as specified in the order. The full judgment will become due immediately if they are found to have misrepresented their financial condition. The order was filed in the U.S. District Court for the District of New Jersey. The $11.4 million contempt order against Bryan D’Antonio and three companies he controls, The Rodis Law Group Inc., America’s Law Group Inc., and The Financial Group Inc., came at the request of the FTC, which charged that operators of the scam had falsely claimed they would stop foreclosures and negotiate lower mortgage interest rates, monthly payments, and principal balances. Promoters of the scam claimed a 100 percent success rate and wrongly advised consumers to pay them instead of making mortgage payments. The FTC alleged that homeowners got few, if any, loan modifications, and many people lost their homes to foreclosure after paying them up to $5,500. The operators also falsely claimed that attorneys would check consumers’ loan documents for fraud and other lending violations that they would use as leverage in negotiating loan modifications, according to the complaint. In May 2009, the FTC charged the defendants with violating a 2001 order that banned D’Antonio from telemarketing and misleading consumers about goods or services. The FTC obtained the 2001 order against D’Antonio and his former company, Data Medical Capital Inc., for operating a work-at-home medical billing opportunity scheme. D’Antonio also pleaded guilty to mail fraud for his involvement in that scam and served almost three years in prison. In addition to the financial sanctions against D’Antonio and the three companies, the court barred him from making misleading statements about refunds, exchanges, and total costs or quantity. The FTC has collected more than $1 million from the defendants’ available assets thus far, and will refer the remainder of the $11.4 million judgment to the Department of the Treasury for collection. The FTC has set up a consumer information line at 1-888-398-8205. Fedmortgageloans.com . The FTC has charged Dominant Leads LLC, MAD TJ Holdings LLC, James Rambadt, Thomas Hayes, and James Kane with misrepresenting that the mortgage assistance and debt relief programs they are marketing are affiliated with the federal or state government, and that consumers may be eligible for a federal or state loan modification or debt relief program. Some of the defendants’ Web sites use logos similar to the federal government’s MakingHomeAffordable.gov logo, and many of their sites feature official government agency seals or logos and links to federal government Web sites. When consumers seeking mortgage assistance or debt relief services call the toll-free numbers on the defendants’ Web sites, they are connected to other companies that sell supposed mortgage assistance relief or debt relief services for a fee. The FTC seeks to stop the defendants’ illegal practices and make them forfeit their ill-gotten gains. The complaint was filed in the U.S. District Court for the District of Columbia on June 16, 2010. The Commission votes were unanimous in these actions. The Federal Trade Commission is a member of the interagency Financial Fraud Enforcement Task Force. For more information on the task force, go to www.stopfraud.gov . NOTE: The Commission authorizes the filing of 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 defendants have actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the full force of law when signed by the judge. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics .

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More Than A Dozen Marketers Banned from Selling Mortgage Relief Services; Repeat Offender Ordered to Pay $11.4 Million for Contempt

Debt collector Midland Funding LLC to pay $330K settlement

Thu, 17 Jun 2010 11:38:31 +0000

“In a victory for consumer protection advocates, a major Maryland debt collector has agreed to drop 10,000 lawsuits against people who, in turn, alleged they were pursued illegally by the then-unlicensed company. Midland Funding LLC will also pay the class $200,000 and its lawyers $130,000. Judge Richard D. Bennett preliminarily approved the deal Monday afternoon.” ~ Source the Daily Record

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Debt collector Midland Funding LLC to pay $330K settlement

Court Halts Massive Telemarketing Robocall Operation

Thu, 10 Jun 2010 21:15:17 +0000

The Federal Trade Commission’s work to stop deceptive pre-recorded “robocalls” took another step forward today as a federal court halted a major telemarketing operation that made millions of illegal phone calls pitching worthless extended auto warranties and credit card interest rate-reduction programs. At the request of the FTC, a federal court judge in Chicago has entered an order stopping the operation’s calls, temporarily freezing its assets, and appointing a receiver to take control of the operation. “Telemarketers need to understand that blasting consumers with ‘robocall’ pitches is no longer legal,” said FTC Midwest Region Director C. Steven Baker. “Unless you have someone’s consent up-front and in writing to receive a robocall, just don’t do it. The rules could not be simpler than that, and we will go after telemarketers who ignore them.” According to the FTC, SBN Peripherals, Inc., based near Los Angeles, allegedly made more than 370 million calls to consumers nationwide in the past year alone, prompting tens of thousands of complaints to the agency. One telephone service provider told the FTC that during a single day in April 2009 the defendants sent 2.4 million calls to consumers – more than 27 calls per second. The FTC charges the robocalls violated the agency’s Do Not Call Registry Rule. To make it difficult for consumers to identify the caller, the FTC alleges that SBN’s robocalls often transmitted caller ID information vaguely identifying the caller as “SALES DEPT” and displaying telephone numbers registered to an offshore company it controlled called Asia Pacific Telecom. Asia Pacific, a foreign shell company for SBN, made many of the calls and lists its addresses in locations as disparate as the Northern Mariana Islands, Hong Kong, and the Netherlands, the FTC’s complaint alleges. According to the FTC, three of Asia Pacific’s telemarketing numbers accounted for more than 25,000 consumer complaints to the agency in the past year. Two of those telephone numbers – 301-882-9986 and 757-990-8981 – generated more complaints to the FTC during the past year than any other robocall number. Many of the calls were made to cell phones, sticking consumers with additional charges. The operation allegedly used a technology known as “voice broadcasting” to deliver its fraudulent pitches. The FTC charges that the recordings falsely claimed that the caller had urgent information about the consumer’s auto warranty or credit card interest rate. Consumers who pressed “1” for more information were transferred to live telemarketers at a variety of different locations, who used fraudulent practices to sell inferior extended auto service contracts or worthless debt-reduction services. The company’s calls may be familiar to consumers who have answered the phone, only to be greeted by a recording from “Stacey at Account Holder Services” or “Rachel at Cardholder Services” pitching a purported service to lower their credit card interest rate. The FTC’s complaint alleges that defendants violated the FTC’s telemarketing rules by: using robocalls to contact consumers. Under the FTC’s Telemarketing Sales Rule, since September 1, 2009, nearly all such pre-recorded calls have been illegal, unless the seller first obtains the consumer’s written permission; calling consumers whose telephone numbers are on the National Do Not Call Registry; “abandoning” pre-recorded calls (not connecting to a live person when a consumer answers) at a higher rate than permitted under law (three percent of all calls made); and repeatedly calling consumers who asked to be put on their company-specific do-not-call list. The FTC alleges SBN delivered robocalls on behalf of at least seven entities that the agency or state attorneys general previously sued for engaging in fraudulent sales practices. SBN also allegedly made illegal “extended auto warranty robocalls” on behalf of another company owned by Fereidoun “Fred” Khalilian, a repeat telemarketing offender against whom the FTC obtained a new court order last week (see press release at: http://www.ftc.gov/opa/2010/06/dolcegroup.shtm ). In addition to the temporary restraining order and asset freeze announced today, the FTC is seeking a court order permanently barring the allegedly illegal conduct and will seek consumer redress as appropriate. The Commission vote approving the complaint was 5-0. It was filed under seal on May 25, 2010 in the U.S. District Court for the Northern District of Illinois, Eastern Division. The court issued a temporary restraining order against the defendants on May 26, 2010. The FTC filed the complaint announced today against Asia Pacific Telecom, Inc., doing business as (d/b/a) Asia Pacific Networks; Repo B.V.; SBN Peripherals, Inc., d/b/a SBN Dials; Johan Hendrik Smit Duyzentkunst; and Janneke Bakker-Smit Duyzentkunst. The Commission would like to acknowledge the assistance that telecommunications carriers AT&T and Verizon Wireless provided in the investigation of the case. The FTC reminds consumers that if they get a robocall they did not authorize, they can file a complaint by going to: www.donotcall.gov or by calling 1-888-382-1222. The FTC’s Do Not Call Registry for telemarketers accepts both land lines and cell phone numbers. NOTE: The Commission issues 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 issuance of a complaint is not a finding or ruling that the defendants have violated the law. Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm .

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Court Halts Massive Telemarketing Robocall Operation

U-Haul and its Parent Company Settle FTC Charges That They Invited Competitors to Fix Prices on Truck Rentals

Wed, 09 Jun 2010 19:00:00 +0000

U-Haul International, Inc. and its parent company today settled Federal Trade Commission charges that they violated the FTC Act by inviting U-Haul’s closest competitor, Avis Budget Group, Inc., to collude on prices for truck rentals. U-Haul and Budget control more than 70 percent of the “do-it-yourself” one-way truck rental business in the United States. If U-Haul had succeeded in its price-fixing plan, the two companies could have imposed higher prices on truck-rental consumers, according to the FTC. “It’s a bedrock principle that you can’t conspire with your competitors to fix prices – and shouldn’t even try. Consumers deserve better. The order announced today will ensure that U-Haul will not try it again,” said FTC Chairman Jon Leibowitz. The FTC’s complaint alleges that on several occasions between 2006 and 2008, U-Haul tried to increase rates for one-way truck rentals by privately and publicly communicating with Budget, the second-largest truck rental company in the United States. However, the complaint does not allege that U-Haul and Budget actually reached an agreement. As alleged in the complaint, the problems started after U-Haul’s CEO and Chairman Edward J. Shoen discovered in 2006 that competition from Budget was forcing U-Haul to lower prices on its one-way truck rentals. In two company-wide memos in 2006, Shoen acknowledged the problem and provided a solution. For example, Shoen wrote: “Budget continues in some markets to undercut us on One-Way rates. Either get below them or go up to a fair rate. Whatever you do, LET BUDGET KNOW. Contact a large Budget Dealer and tell them. Contact their company store and let the manager know.” At the same time, the FTC charges, Shoen told local U-Haul dealers to talk to their counterparts at both Budget and Penske – another truck rental competitor – and tell them that U-Haul had raised its one-way rates, and that they should now match U-Haul’s higher rates. The complaint alleges that Shoen invited Budget to collude again in 2008 after Budget declined to match U-Haul’s price increases – this time, during a conference call with industry analysts. During the call, Shoen made statements suggesting that U-Haul would raise its rates, and would maintain the new rates so long as Budget did not respond by price cutting in a way that took market share from U-Haul. He added that Budget need not match the U-Haul prices exactly, but could lag behind by three to five percent. The proposed settlement order against U-Haul and its parent company AMERCO bars them from colluding or inviting collusion. Specifically, the companies are prohibited from inviting a competitor to divide markets, allocate customers, or fix prices, as well as participating in, maintaining, organizing, implementing, enforcing, offering, or soliciting any other company to engage in such conduct. The order also includes monitoring and compliance provisions to ensure U-Haul and AMERCO comply with its terms. It will expire in 20 years. The FTC vote approving the complaint and proposed settlement order was 5-0. Commissioners William E. Kovacic, J. Thomas Rosch, and Chairman Leibowitz issued a joint separate statement that can be found at: http://www.ftc.gov/os/caselist/0810157/100609uhaulstatement.pdf . The statement noted that Congress gave the FTC authority under Section 5 of the FTC Act to stop unfair methods of competition beyond the antitrust laws, but it is not itself an antitrust law and does not on its own terms create treble damages liability. The order will be subject to public comment for 30 days, until July 9, 2010, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. To submit a comment electronically, please click on the following link: https//public.commentworks.com/ftc/U-HaulAmerco . NOTE: The Commission issues 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 issuance of a complaint is not a finding or ruling that the respondent has violated the law. A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000. Copies of the complaint, consent order, and an analysis to aid in public comment can be found on the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov , or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts .

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U-Haul and its Parent Company Settle FTC Charges That They Invited Competitors to Fix Prices on Truck Rentals