FTC shoots down cyber-vultures at Google Money Tree

FTC continues assault on economic cyber-scammers

The Federal Trade Commission last year vowed to go after companies preying on what it called  cyber-vultures looking to feast on consumers and businesses suffering from the down economic situation.

As part of that assault, the agency this week shut down the operations of Google Money Tree and said the defendants must surrender $3.5 Million worth if ill-gotten assets - though the full amount may never likely be turned over.

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The FTC charged that Google Money Tree falsely claimed ties to Google Inc., and marketed an allegedly bogus work-at-home scheme and charging hidden monthly fees to consumers' credit card and bank accounts.  Under a settlement agreement reached with the FTC, the defendants are banned from selling products through "negative option" transactions ­- in which the seller interprets consumers' silence or inaction as permission to charge them. 

The FTC announced a complaint in July 2009 against several defendants that allegedly sold a bogus work-at-home product under names including "Google Money Tree," "Google Pro," and "Google Treasure Chest."  By using the name and logo of the Internet search company Google and falsely promising that consumers could earn $100,000 in six months, the defendants lured consumers into divulging their financial account information to pay a modest shipping fee for a work-at-home kit.  The defendants failed to disclose adequately, however, that buying the product would trigger automatic monthly charges of $72.21 for another product, and that those charges would continue until the consumer took steps to cancel, according to the FTC complaint. 

The complaint charged that the defendants violated the FTC Act by failing to adequately disclose that consumers would be subjected to monthly charges; by making false or unsupported claims that consumers were likely to earn substantial income; and by falsely claiming that they were affiliated with Google Inc.  The defendants also violated the Electronic Fund Transfer Act and Regulation E by debiting consumers' bank accounts on a recurring basis without obtaining written authorization, according to the complaint.

The settlement stems from the FTC's  "Operation Short Change," a law enforcement sweep made last year that included 15 FTC cases, 44 law enforcement actions by the Department of Justice, and actions by at least 13 states against those looking to bilk consumers through a variety of schemes, such as promising non-existent jobs; promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; or putting unauthorized charges on consumers' credit or debit cards.

At the heart of Operation Short Change, are FTC cases against companies the agency says have conned consumers out of millions of dollars. In each case, the FTC alleged that the defendants' practices were deceptive or unfair and/or made illegal electronic funds transfers or violating the Telemarketing Sales Rule.

Follow Michael Cooney on Twitter: nwwlayer8  

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