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Attorney General Van Hollen Joins In Crackdown On Scammers Trying To Take Advantage Of The Economic Downturn

 

New Public Education Video Helps Consumers Steer Clear of Business Opportunity Fraud

 

MADISON - Attorney General J.B. Van Hollen joined with the Federal Trade Commission and other state law enforcement agencies in announcing a crackdown on scammers trying to take advantage of the economic downturn to bilk vulnerable consumers out of their money through a variety of schemes, such as promising non-existent jobs, and promoting overhyped business opportunities, bogus government grants and phony debt-reduction services, and by putting unauthorized charges on consumers' credit or debit cards.

 

The law enforcement sweep, dubbed Operation Short Change, includes 15 FTC cases and 42 law enforcement actions by the U.S. Department of Justice.  Fourteen states and the District of Columbia took another 64 enforcement actions against individuals and companies allegedly defrauding consumers.  The FTC also produced a new consumer education video featuring consumer victims and a former scammer who gives an insider account of how these operations use high-pressure tactics and celebrity endorsers to trick cash-strapped consumers.

 

"In today's tough economic times, it is important that the State remain ever vigilant in ensuring companies do not use misleading, deceptive or fraudulent sales practices to coerce consumers into purchasing goods or services. The Wisconsin Department of Justice continues to pursue investigations and, where appropriate, prosecute cases that enforce our State's consumer protection laws, in order to ensure consumers get what they've been told they are paying for."

 

The FTC is highlighting two Wisconsin cases as part of Operation Short Change. The first case is that of Denver Kalkofen, a New Holstein resident convicted of theft and securities fraud. Kalkofen was convicted last month of four counts of theft in a business setting and two counts of securities fraud. Additional information on the Denver Kalkofen case.

 

The second Wisconsin case highlighted as part of Operation Short Change was a class action that was brought by the Consumer Law Litigation Clinic at the University of Wisconsin Law School and joined by the State of Wisconsin, against an internet payday loan company, Tremont Financial, LLC. The case alleged Tremont Financial violated the Wisconsin Consumer Act and the Federal Truth and Lending Act in the issuance of short term, high interest, pay day loans. A settlement was reached with the company, in which the company agreed to forgive all outstanding balances for the class members, as well as a cash payment to each.

Additional information on the Tremont Financial, LLC case.

 

Operation Short Change:  FTC's Law Enforcement Actions

 

The FTC today announced that it has taken eight new law enforcement actions against   companies that have conned consumers who are struggling to make a living and pay their bills during these difficult economic times.  The defendants in these cases were charged with making deceptive or unfair claims and, in some cases, with making illegal transfers of electronic funds or  violating the Telemarketing Sales Rule.  This brings the total number of such cases the FTC has initiated, settled or otherwise resolved so far this year to 15.

 

Participating States

In addition to the District of Columbia, the states participating in the sweep were: California, Florida, Illinois, Iowa, Kentucky, Louisiana, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, Texas and Wisconsin.

 

Consumer Education

The FTC today issued a new consumer education video to help consumers understand just how easy it is to be conned. The video features a former scammer who hawked phony business opportunities, and ultimately served prison time for deceiving investors. The video is available at http://www.ftc.gov/opa/2009/07/shortchange.shtm.  Among other things, he advises that consumers can help protect themselves by demanding written disclosures on earnings and other sales data.