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Consumers who filed refund requests following a $40 million settlement of a class-action lawsuit against Skechers USA, Inc. should expect a check in the mail soon, the Federal Trade Commission said Thursday.
The lawsuit alleged that Skechers deceptively advertised its toning shoes, namely Shape-ups, Resistance Runner, Toners and Tone-ups shoes. The shoes sold for about $60 to $100 dollars.
The company made "unfounded claims that its Shape-ups shoes would help people lose weight, and strengthen and tone their buttocks, legs and abdominal muscles," the FTC said.
According to a complaint filed by the FTC in 2012, the company's advertising claims included:
"Get in shape without setting foot in a gym."
"Shape-ups will help you lose weight and improve your circulation, creating a healthier you!"
"... once my Skechers Shape-ups are on snug and comfy, I'm toning my muscles, strengthening my core, burning calories."
The FTC also alleged in the complaint that clinical studies conducted for Skechers, upon which some advertising claims were made, used faulty methods. Two of the studies were conducted by a chiropractor who was married to a senior vice president of marketing at Skechers. One study lasted only six weeks, had only eight participants and included no control group, the complaint said. Another study allegedly included falsified data.
The settlement administrator will begin mailing the 509,175 refund checks on Friday. The checks must be cashed by October 10. The deadline for filing a refund request has passed.
Whistleblower got a call on her company cell phone last week. A recorded message informed her that the Minnesota Department of Motor Vehicles had analyzed her car insurance and determined she is paying too much.
While Whistleblower has no doubt that is true, as she has never had a black mark on her auto record, there's a problem with the message.
There is no Minnesota DMV.
Minnesota's equivalent is the DVS, the Driver and Vehicle Services Division of the Department of Public Safety.
Whistleblower hung up at that point and called the Department of Public Safety. Several others have done the same recently and the Department issued a press release on Thursday calling the solicitations "false and misleading."
"The calls begin with a recorded message that says something to the effect of 'according to recently released information from the Minnesota DMV you are paying too much for your car insurance,'" the DPS said.
DVS has no idea how much you are paying for insurance, the release said, and doesn't engage in telemarketing or allow the use of its name by telemarketers.
Robocalling is illegal except if used by certain groups such as charities, political campaigns and school districts.
Those who receive a DMV-related robocall or any other sales-related robocall for that matter may want to file a complaint with the Office of Minnesota Attorney General Lori Swanson, the Better Business Bureau or the Federal Trade Commission. The FTC and law enforcement agencies use information gleaned from thousands of complaints to attempt to determine the identity of the perpetrators.
A woman who "assisted and facilitated a scheme" that promised a "guaranteed $25,000 grant from the federal government," lost an appeal of a ruling that ordered her to repay $1,682,950 to victims, the Federal Trade Commission said.
In 2011, the FTC and the states of Illinois, Kansas, Minnesota and North Carolina sued Meggie Chapman in a Kansas district court.
A May 2013 appeals court decision announced Thursday found that Chapman, doing business as Meggie Chapman & Associates, violated the FTC's Telemarketing Sales Rule by deceiving consumers and "provided substantial assistance" to fellow schemers Wealth Power Systems, LLC and Aria Financial LLC.
The scheme worked this way:
Consumers were sent postcards stating the availability of government grants.
Those who called the toll-free number were offered a book for $69 called the "Professional Grant Writer," which Chapman and others wrote. The book, postcards and a recorded message contained misrepresentations about the likelihood of receiving a grant.
Next, the schemers offered grant-research services to those who called. The "services" cost between $800 and $1,100 and consisted of a printed list of potential funding sources. Many of the names on the list did not exist, didn't offer grants, didn't offer them to individuals or asked to be taken off the list.
Finally, the businesses offered grant-writing and grant-coaching services to the consumers.
The federal government, in cooperation with state regulators, state attorneys general, law enforcement agencies and foreign partners has expanded its crackdown on timeshare resale scams, according to a press conference held by the Federal Trade Commission in Miami, Fla. on Thursday.
The FTC provided a list of 191 actions taken against timeshare resale scammers recently by it and its partners in crime prevention. U.S. attorneys have filed suit in 58 cases involving 168 individuals, resulting in a combined prison sentence of 218 years, Chuck Harwood, Acting Director of the FTC Bureau of Consumer Protection said.
The number of consumer complaints about the scams tripled between 2010 and 2011 nationwide. The 2012 figure is double that of 2010, the decrease from 2011 likely due in part to aggressive enforcement, according to Harwood.
Though these scammers are hard to pin down because they use fake street addresses, phone numbers that roll over to other phone numbers, and other deceptive practices, when enough detailed complaints roll in, it's sometimes possible to pinpoint the perpetrators, Harwood said.
A woman, Tracy, who spoke at the conference and was victimized twice for no more than $800 each time, was wary when a third scammer called her in 2011. She didn't fall for the pitch, but forwarded information she had gleaned to the FTC. "In January they got a multimillion dollar judgment against this company," Tracy said.
Florida's attorney general, Pam Bondi, said that of the top four complaints to her office in 2012, there were more timeshare-related complaints that the other three categories combined. In 2012, the office received more than 12,000 timeshare resale complaints, though that is down 56% from 2011, Bondi said.
Companies Bondi's office has successfully prosecuted were ordered to pay a total of $8 million in restitution and $28 million in civil penalties.
Sixteen people face criminal charges in Florida for impersonating employees of the Florida Office of the Attorney General.
When asked where a consumer can look to find an honest timeshare resale business, the conference panel seemed at a loss. They were able to repeat what NOT to do: Don't pay money on a promise, don't be taken in by someone who calls you up out of the blue, and so on.
But check out the FTC's website for a nifty infographic on the anatomy of a timeshare resale scam and tips on what NOT to do when selling your timeshare.
Recent articles by Whistleblower about timeshare resale scams has prompted a fair amount of requests for information on specific companies that have recently contacted readers.
One woman, Sharon, said "I'm involved right now with a possible timeshare scam that I've been dealing with for three months with Mexico."
Whistleblower left a message advising her to pay nothing further and file complaints with Attorney General Lori Swanson's office and the Better Business Bureau. She should also file a complaint with the attorney general's office in the state in which the business is allegedly located.
Another woman, Christina, wondered about a California company, Isosceles Foundation, which contacted her recently about removing her timeshare's maintenance fee. "He was so persistent and so pushy. 'Well, why would you want to pay the maintenance fees,' he asked."
Christina was suspicious of the offer because she said her Hawaii timeshare resort doesn't hold contracts with third parties. The Better Business Bureau's listing for the company has temporarily been removed.
A couple, Mavis and Byron, asked if Whistleblower knows anything about a Florida company called Timeshares by Owner.
It appears the state of Florida filed suit against the company in 2010 after it received many complaints that the company was not complying with terms of an earlier settlement with the state.
The Office of the Attorney General of Florida included the following in a press release in 2010:
"The lawsuit naming Timeshares Direct, Inc., which does business as Timeshares By Owner, alleges that the company is in violation of a 2001 settlement with the Attorney General’s Office. According to that settlement, the company was prohibited from using misleading sales tactics, such as claiming to have a buyer waiting to purchase the consumer’s timeshare, to induce consumers into advertising their timeshares with the company. Since 2007, the Attorney General’s Office has received more than 180 consumer complaints alleging that Timeshares By Owner is not honoring conditions of the settlement."
In May 2012, Timeshares by Owner's website announced that the suit was settled with no finding of wrongdoing:
"Timeshares By Owner®, the nation’s leading timeshare advertising company for sale and for rent by owner, is pleased to announce the resolution of its pending matter with the Florida Attorney General. The Settlement Agreement states that there is no finding that there has been any wrongdoing by Timeshares By Owner®," the website said.
The actual settlement does admit it is a resolution of a disputed case, but it bans the company from 11 specific deceptive acts, including calling people on the do-not-call list and making misrepresentations to consumers.
The company has an "F" rating with the Better Business Bureau and the bureau has received 279 complaints about the company in the past three years.
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