FTC reports to Senate about its actions against crisis related scams

The Federal Trade Commission was testifying before the U.S. Senate Committee on Homeland Security and Governmental Affairs that the agency is working to protect consumers from fraudulent schemes claiming to dispense guaranteed grants from the economic stimulus program, and from other frauds exploiting consumers who are struggling due to the economic downturn.

Jon Leibowitz, a chairman of the FTC testified that the Commission is performing aggressive actions to pursue fraudulent marketers who are capitalizing on the American Recovery and Reinvestment Act of 2009 by claiming to offer free government grant money and using other come-ons to bilk money from consumers confronted with job losses, foreclosures, and dwindling retirement accounts.

The testimony highlighted recent FTC cases involving government grant-related schemes. The Commission charged Grant Connect, LLC, and related entities with misrepresenting their expertise and the availability of grants, and making unauthorized withdrawals from consumers’ bank accounts. 

The testimony noted several other “Operation Short Change” cases in which the FTC obtained court orders that halted the defendants’ practices and froze their assets. 

The testimony described the FTC’s consumer education efforts, including “Operation Short Change” press coverage that reached more than 35 million Americans. The Commission produced a video featuring a former con artist, who talked about his techniques and how consumers can protect themselves from fraud (YouTube.com/ftcvideos). In connection with a federal-state crackdown on mortgage foreclosure rescue scams, the FTC created mortgage-related resources available at www.ftc.gov/moneymatters, and groups such as NeighborWorks America and the Homeowners Preservation Foundation are distributing FTC materials to homeowners. 

The testimony also described the FTC’s research to stay abreast of marketplace developments to ensure its preparedness against fraud, including consumer fraud surveys and a fraud forum held earlier this year to help law enforcement, consumer advocates, and businesses understand how fraudulent marketers operate. In conclusion, the testimony expressed the FTC’s commitment to using its resources to stop fraud and help consumers avoid being victimized.