FTC cracks down on employment scams
The Federal Trade Commission is expected to announce Wednesday that it has halted the operations of and imposed millions of dollars in fines on several companies that it says promised to help people find work but instead only took their money.
The crackdown is part of the agency's focus on "last-dollar scams" in the wake of the recession, which left many consumers unemployed and crippled by debt. The FTC dubbed this most recent sweep "Operation Empty Promises."
"The victims of these frauds are our neighbors - people who are trying to make an honest living," David C. Vladeck, head of the FTC's Bureau of Consumer Protection, said in a prepared statement.
One of the companies targeted by the FTC, Ivy Capital, purported to help workers start their own Internet business and earn up to $10,000 a month. But the FTC said the firm instead defrauded consumers out of $40 million in fees for services such as tax advice and access to credit that were never delivered.
Another company, National Sales Group, advertised fake sales jobs on CareerBuilder.com and charged applicants a fee for background checks, the FTC said. The company generated more than 17,000 complaints to law enforcement agencies, and CareerBuilder has since dropped the listings. The FTC said it stopped operations at Ivy Capital and National Sales late last month.
A third company, Business Recovery Services, promised to help consumers recover money lost to these types of scams for a fee of up to $499. The FTC said the business misrepresented how effective its services were and often charged its fees in advance. The FTC has referred this case to the Justice Department.
The FTC closed seven other employment scam cases involving these companies: La Association Nacional de Trabajo, Darling Angel Pin Creations, Global U.S. Resources, U.S. Work Alliance, Preferred Platinum Services Network, Abili-Staff and Entertainment Work. Judgments imposed by the FTC and courts totaled $14 million.
"These turned out to be empty promises - and the people who counted on them ended up with high levels of frustration and even higher levels of debt," Vladeck said.
| March 2, 2011; 11:00 AM ET
Categories: Federal Trade Commission, Unemployment
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