FTC Testifies About Crackdown on Scams Tied to the Economic Downturn
"The Federal Trade Commission testified before the U.S. Senate today on the agency’s campaign to crack down on scammers who are trying to take advantage of the economic downturn to push a variety of scams, such as phony job-placement and debt-reduction services, get-rich-quick schemes, and bogus government grants.

David Vladeck, Director of the FTC’s Bureau of Consumer Protection, told the Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance that the Commission is taking steps to protect consumers, who are especially vulnerable to these “financial distress” scams during tough economic times.

"Opportunistic fraudsters have quickly adapted their schemes and sales pitches to take advantage of consumers during the economic downturn, with some capitalizing on the economic stimulus package. They use come-ons that offer the lure of free government grant money, guaranteed job placement, investments promising recession-proof income, access to credit cards, or debt-relief services,” Vladeck told the subcommittee.

In response to the rise in financial distress scams, on July 1, 2009, the Commission announced “Operation Short Change,” a joint initiative with 14 states, the Department of Justice, and other agencies that included more than 120 law enforcement actions, Vladeck testified. As part of this operation, the FTC brought eight new cases against companies that have conned consumers, and took action in seven additional cases earlier this year challenging similar misconduct. The new cases include one against the marketers of the widely publicized get-rich-quick schemes called “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.” The Commission alleged that these schemes alone, promoted on the Internet and through misleading infomercials, have duped hundreds of thousands of consumers out of about $300 million. .."