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FTC Warns Rapid Expansion of Internet Domain Name System Could Lead To More Fraud

December 18, 2011 By Leave a Comment

12/16/2011 FTC Press Release:

FTC Warns That Rapid Expansion of Internet Domain Name System Could Leave Consumers More Vulnerable to Online Fraud

Letter Urges ICANN to Implement Pilot Program, Take New Steps to Protect Consumers
The Federal Trade Commission today sent a letter to the Internet Corporation for Assigned Names and Numbers (ICANN), the organization that oversees Internet domain names, expressing concern that the organization’s plan to dramatically expand the domain name system could leave consumers more vulnerable to online fraud and undermine law enforcers’ ability to track down online scammers.
In its letter to ICANN, the Commission warned that rapid expansion of the number of generic top-level domain names (gTLDs) – the part of the domain name to the right of the dot, such as “.com,” “.net” and “.org” – could create a “dramatically increased opportunity for consumer fraud,” and make it easier for scam artists to manipulate the system to avoid being detected by law enforcement authorities. The Commission urged ICANN – before approving any new gTLD applications – to take additional steps to protect consumers, including starting with a pilot program to work out potential problems.
“A rapid, exponential expansion of gTLDs has the potential to magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters,” the Commission’s letter states.
ICANN intends to allow website operators to apply for new gTLDs starting on January 12, 2012.
The Commission letter noted that the FTC has raised consumer protection issues with ICANN for more than a decade. The Commission stated that the FTC and other law enforcement agencies need to navigate the domain name system in order to investigate cases of unfair or deceptive practices online, and the existing system already is open to manipulation by scam artists seeking to avoid detection. The FTC routinely consults the “Whois” service, which lists the identities and contact information of website operators. However, the Commission explained that the Whois service often contains incomplete or inaccurate data or, increasingly, proxy registrations, which shields contact information even for domain name registrants engaged in commercial activities.
The increase in website names that could be registered in the new gTLDs would put “infinite opportunities” at the fingertips of scam artists, who take advantage of consumers through tactics such as using misspelled names to create copycat websites, the Commission’s letter states.
“In short, the potential for consumer harm is great, and ICANN has the responsibility both to assess and mitigate these risks,” the letter states.
Before approving any new gTLD applications, the FTC urged ICANN to:
  • implement the new program as a pilot program and substantially reduce the number of generic top level domains that are introduced as a result of the first application round;
  • strengthen ICANN’s contractual compliance program, in particular by hiring additional compliance staff;
  • develop a new ongoing program to monitor consumer issues that arise during the first round of implementing the new gTLD program;
  • assess each new proposed generic top level domain’s risk of consumer harm as part of the evaluation and approval process;
  • improve the accuracy of Whois data, including by imposing a registrant verification requirement.
  • The Commission letter warned “If ICANN fails to address these issues responsibly, the introduction of new gTLDs could pose a significant threat to consumers and undermine consumer confidence in the Internet.”
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 2,000 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. Like the FTC on Facebook and follow us on Twitter.
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Claudia Bourne Farrell,
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202-326-2181
Filed Under: FTC News Tagged With: , , , , ,

FTC Halts Timeshare Property Resale Scam; Telemarketers Falsely Claimed They Had Buyers Lined Up, Agency Alleges

July 19, 2011 By 2 Comments

7/19/2011 FTC News Release:

At the Federal Trade Commission’s request, a federal court has temporarily halted a telemarketing operation that targeted consumers trying to sell their timeshare properties. The defendants allegedly charged consumers thousands of dollars, falsely claiming they had buyers lined up for sales that supposedly would be reviewed and approved by the FTC. As part of its continuing crackdown on con artists who prey upon financially distressed consumers, the FTC seeks to permanently end the defendants’ deceptive practices and make them refund consumers’ money.

According to court papers filed by the FTC, the Orlando, Florida-based defendants, who operated out of mail drop addresses in places such as Las Vegas, Boston, and Orlando, contacted consumers trying to sell their timeshare properties and told them they had buyers for their properties. In order for the sale to proceed, the defendants charged consumers up to $3,150 – either as an “earnest money deposit” to commit them to the sale, or for sale-related expenses – which, consumers were told, would be refunded when the sale closed. The defendants instructed consumers to pay by cashier’s check or money order sent by overnight delivery, and to immediately sign and return a “sales agreement” or “seller’s document” that would be mailed to them. Telemarketers who spoke with consumers often represented that the property sale would be reviewed and approved by the FTC.

The FTC’s complaint alleged that the “sales agreement” was merely a marketing contract for advertising the property, not a sales contract. Consumers who signed the contract and sent their payment to the defendants often were not contacted again, and consumers’ properties were never sold. Consumers who called the defendants were given the run-around, and refund demands were routinely ignored or denied. Contrary to the defendants’ alleged assertions, the FTC does not review or approve timeshare sales.

The FTC charged the defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule by misrepresenting that they had buyers willing to pay a specific price for consumers’ timeshare properties, that they would refund their fee when the property was sold, and that the FTC would review and approve proposed sales.

The court froze the defendants’ assets and appointed a receiver to take control of the businesses. The defendants are National Solutions LLC, also doing business as Blue Scape Timeshares International, Country Wide Timeshares, Countrywide Timesharesales MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, and VIM Timeshares; Landmark Marketing LLC, also doing business as Blue Scape Timeshares, Country Wide Timeshares International, Propertys DRK, Quick Sale Advisers, Quick Sale International, and Universal Propertys International; Red Solutions LLC, also doing business as City Resorts and Resort Advisors; Enterprise America, LLC, also doing business as American Timeshares, Exit Week, and Resort Advisors International; Investments Group of Florida, LLC, also doing business as Resort Advisors AM; Multiglobe LLC, also doing business as Universal Propertys; Leandro Velazquez; Samuel Velazquez; Joel Velazquez; Kiomary Cruz; Edgar Gonzalez; Vicente Virgilio; and Aaron Weiss.

The Commission vote authorizing the staff to file the complaint was 5-0. It was filed in the U.S. District Court for the Middle District of Florida, Orlando Division.

To learn how to avoid pitfalls when selling a timeshare unit, read the FTC’s Selling a Timeshare Through a Reseller: Contract Caveats.

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.

Click here for the original news release and additional information.

Filed Under: Real Estate Tagged With: , , , , , , ,

Lance Murkin Ordered To Return $10.4 Million In Fraudulently Obtained Funds

May 30, 2011 By 1 Comment

There are plenty of work-at-home opportunities and some of them can possibly help you make a living online if you work hard and manage your time and money well.  Of course even if you find the best opportunity, manage your time and resources well, and work hard, there’s still no guarantee that you’ll succeed.

Lance Murkin is a businessman whose work-at-home opportunities had been garnering a lot of negative attention from the Better Business Bureau for the past 15 years or so. Ever since Murkin founded Real Wealth, Inc., which was back in the year 1996, his business had been under close BBB scrutiny. The Bureau has investigated plenty of misleading advertisements by Mr. Murkin and all of them have contributed to exposing the founder of Real Wealth, Inc. as a scammer. Also operated as American Financial Publications, Emerald Press, Financial Research, Global Direct Marketing, Midwest Marketing, Pacific Press, United Financial Publications, Wealth Research, and others, Real Wealth, Inc. advertised either fraudulent work-at-home schemes or grant scams. And for each scheme, Mr. Murkin had an alias.

As a result of advertising in a misleading manner, Mr. Murkin had been in the thick of a legal battle with the FTC for the past fifteen months which ended on March 25, 2011 when Mr. Murkin filed Bankruptcy. The FTC had frozen Mr. Murkin’s assets before that. Less than two months after Mr. Murkin gave up, a Federal Judge handed down a judgment that Mr. Murkin was to return $10.4 million in fraudulently obtained funds from 2004-2010 and he was also banned from marketing any sort of  work-at-home opportunities or grants programs. This, however, could not have been possible without the help of the Better Business Bureau.

Back in the year 2009 when a local Los Angeles news agency had asked the BBB for information on one of Murkin’s schemes that convinced people to ask celebrities for money, the news story was noticed by the FTC who then contacted the BBB for information. Luckily, the BBB had been keeping a close eye on Mr. Murkin and his companies for over a decade due to which it could provide the FTC what it needed. It provided the FTC a significant amount of information which included Mr. Murkin’s business names, aliases, advertising practices, his victims, his attorney and his websites.

A Better Business Bureau representative had also agreed to provide a declaration to be submitted in evidence and testimony on behalf of the prosecution if the case reached trial. The BBB’s most note-worthy contribution to the case, however, was the series of ad-reviews conducted between 2001 and 2009 that asked Mr. Murkin to substantiate earnings claims, which he did not. Instead, he defended most of his scams by claiming that his long time attorney Thayer Lindauer, “who has over 30 years experience as a marketing attorney” as cited by Mr. Murkin, had seen to it that all advertising and marketing campaigns were in compliance with all state and federal regulations. Nonetheless, record has it that Lindauer has represented multi-level marketers who got into legal trouble for false advertising in the past too.

According to the BBB report Lance Murkin now plays in a cover band in bars.

Filed Under: Work At Home Tagged With: , , , , , , , , , , ,
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