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FTC cracks down on scammers

fingerscrossedThe Federal Trade Commission (FTC) has launched an initiative to help protect entrepreneurs who might be vulnerable to scam artists. The crackdown is on scammers trying to take advantage of the economic downturn to bilk consumers and aspiring business people. Their schemes range from promising non-existent jobs; to promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; to putting unauthorized charges on consumers’ credit or debit cards.

Dubbed “Operation Short Change,” the law-enforcement sweep includes 15 FTC cases, 44 law-enforcement actions by the Department of Justice, and actions by at least 13 states and the District of Columbia. During a joint press conference at the FTC, David Vladeck, director of the FTC’s Bureau of Consumer Protection, said: “Rising unemployment, shrinking credit, record-setting foreclosures, and disappearing retirement accounts are causing consumers tremendous anxiety about making ends meet. But to con artists, today’s challenging economy presents just another opportunity to play on consumers’ worry and bilk them out of money.”

“Thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn,” Vladeck added. “Their scams may promise job placement, access to free government grant money, or the chance to work at home. In fact, the scams have one thing in common—they raise people’s hopes and then drive them deeper into a hole.”

To help people understand how easy it is to be conned—and how to avoid fraud—the FTC produced a new consumer education video featuring a former scammer who hawked phony business opportunities and ultimately served prison time for deceiving investors. To view the video, go to ftc.gov or YouTube.com/ftcvideos. In the video, the former scammer gives an insider account of how these operations use high-pressure tactics and celebrity endorsers to trick cash-strapped consumers, and how consumers can protect themselves by demanding written disclosures on earnings and other sales data.


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