Financial Reflections

When the FTC talks, Google and Facebook listen.  I wote earlier on what the Federal Trade Comission is calling “Economic Stimulus Scams” and thought I’d call into the FTC’s press conference to get the details on how they are handling the issue.  Here’s what I learned.

Eileen Harrington, the acting director of the Bureau of Consumer Protection spoke at the conference and outlined two specific things they’ve seen online that have caused them to take action.

1. Websites: These are the types of sites that I outlined earlier, including “Jessica’s Money Blog” that I mentioned specifically.  These types of sites lead to sites that the FTC says “use photos of President Obama and Vice President Biden to give the appearance of authenticity. Sites also use logos from ABC, CBS, CNBC, CNN, FOX, NBC, MSNBC, USNews and other major media outlets to make them appear legitimate.”
   But there’s more to this.  Ms Harrington ran the numbers on all the charges that follow a cheap “trial” signup if you don’t read the fine print.  It could cost a consumer up to $1,000 in a year if they take the bait on one of these offers!  She also mentioned that canceling the offer is complicated, raising the likelihood of the company making the offer of getting more payments.
2. Emails: This is the really scary part.  I’ve talked about identity theftbefore, and this is just a classic “phishing” scam.  Emails touting a way to get stimulus money lead to sites that lure the consumer into giving up their personal information  and then being targeted for idenity theft.
   To me, this is the much more serious scam and it could lead to thousands of dollars in losses. What’s worse, is that the sites consumers are led to may try to load viruses and spyware onto the victim’s computer. Always be aware of emails that have attachments or links to other sites.  Don’t give out personal info unless you are sure where it’s going.

Facebook and Google have been running ads for companies and affiliates offering some of the website-based scams and both companies have worked with the FTC to remove the ads from their networks.  I’ve noticed them gone from Facebook and virtually elimitated from Google.  Facebook and I believe Google had reps at the press conference to answer questions.

Harrington refused to comment on any “non public investigation” that were ongoing, citing that information would be made public when charges are officially filed.  The FTC also seemed to be working with Google and Facebook to find people who ran such sites.

That does raise a question, both Google and Facebook willingly ran such ads (I pointed out a Google ad I saw just yesterday) and profited from the activity.  Will they be held accountable as well?

Harringtion did point out some valulable tips about grants, the stimulus and the FTC:

• Government sites end in “.gov”  If you’re on a site that ends in something else and tries to give the impression that it’s a government site, it isn’t.
• You never have to pay to get grant money.  In fact, you can get a list of grants at grants.gov.  
• Information on the stimulus and how the money is used is available at recovery.gov.
• If you see something online that looks like a problem, you can report it at The FTC website. 

It will be interesting to see what falls out of this conference.  Big players like Google and Facebook have gotten involved, so I think there will be prosecutions and likely a change in the way advertising is done online.