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FTC
O˜ce of Claims and Refunds
Annual Report 2017
Federal Trade Commission
Protecting America’s Consumers
The Federal Trade Commission stops unfair and deceptive business practices by investigating and bringing law
enforcement cases against companies that break the law. Between July 1, 2016 and June 30, 2017, the Bureau
of Consumer Protection obtained 168 court orders for more than $12.72 billion.
1
The Bureau’s Office of Claims and Refunds supports the Commission’s mission by returning money to the
consumers and businesses who were harmed by these illegal practices. This year, the office directed dozens of
mailings that resulted in nearly $320 million in refunds, and supported refund programs administered by FTC
defendants to deliver more than $6 billion in refunds.
Getting Money Back into People’s Pockets
The goal of FTC law enforcement actions is to halt illegal practices and get refunds to people who lost money.
Once an FTC lawsuit or settlement is final, and the defendants have paid the money the court orders, then the
Office of Claims and Refunds develops a plan for returning that money to the right people. If there is money
left over at the conclusion of the refund program, or if there is not enough money to provide meaningful
refund amounts, then the FTC sends the money to the U.S. Treasury, where it is deposited into the General
Fund.
In total, FTC cases resulted in more than $6.4 billion in refunds for consumers.
2
Here’s a snapshot of refund
programs administered by the FTC between July 2016 – June 2017:
• Total amount FTC mailed: $391.38 million
• Number of people who received FTC checks: 6.28 million
• Check cashing rate of first round distributions: 72%
• Average percentage spent on administrative costs: 4.85%
• Money sent to the U.S. Treasury: $655,528
1
This figure does not equal the total amount of judgments the FTC obtained within the time period because some judgments are
suspended by the court when a defendant has an inability to pay it.
2
This number includes a landmark settlement with VW that required the company to offer a buyback program for owners of VW
and Audi diesel cars fitted with illegal emissions defeat devices. The VW buyback program resulted in more than $6 billion in refunds
during this time period.
1
Mapping an FTC Refund Program
Success in getting refunds to people depends principally on whether the FTC has a reliable list of customers,
including their contact information and the amount of money they spent. Usually, the FTC has this
information, and it mails checks out to a list of known customers. In some cases, there is no list of known
customers or there is insufficient contact information, and the agency must use a claims process to identify
people who should receive a refund. There are at least six steps involved in every refund program:
1. Identify who is eligible for a refund.
2. Determine how the money will be divided.
3. Mail checks.
4. Update names and addresses as needed.
5. Consider whether an additional check mailing is feasible.
6. Send any remaining money to the U.S. Treasury.
Identifying who is eligible for a refund
FTC court orders typically require the company to provide a list of customers, their contact information, and
how much each customer paid. If the agency obtains a reliable list of eligible recipients, then the agency mails
checks directly to them. This year, in cases where the FTC used company data to mail checks, an average of
64% of people on the list got a check and cashed it.
Without a list of customers with contact information, getting refunds out may require a claims process. In such
cases, the people affected must apply for a refund. The agency might conduct a media campaign and use paid
advertisements to let people know that refund money is available and encourage them to visit our website to
apply. In other cases, the agency uses whatever minimal data is available, such as a consumer’s email address,
to tell consumers about the refund process. A claims process typically increases the administrative costs of the
refund program. Generally, the FTC gets claims from 5 to 20 percent of potential claimants. In cases where
there was a claims process, the average check cashing rate was 90%.
If there is no customer list and a claims process is not feasible, the agency’s Consumer Sentinel Database may
be used to find eligible recipients. Consumer Sentinel contains millions of complaints from people who
contacted the FTC, the Better Business Bureau, or other federal, state and local law enforcement offices. The
FTC may search for complaints related to the defendants and use the contact information in those complaints
to create a list of potential refund recipients. This year, the agency used Consumer Sentinel data to send
refunds in five FTC matters: Money Now Funding, Payday Support, Regency Financial, Information
Management Forum, and Vantage Funding. In cases where data from Consumer Sentinel was used to mail
refunds, the average check cashing rate was 70%.
Determining how the money will be divided
In cases where the court order does not specify the parameters of the refund program, the FTC determines
eligibility criteria and the formula for calculating payments to eligible recipients. In cases where the settlement
fund is not large enough to provide full refunds to every customer, the FTC analyzes the data to determine
how much individuals will receive. Key factors that influence these decisions include administrative costs, the
2
size of the refund to each recipient, how much variation there is between the lowest and highest loss
amounts, and other details about the case. In most FTC cases, the money is distributed on a pro rata basis,
meaning that each recipient receives an equal percentage of his or her total loss.
Mailing checks and preventing fraud
The FTC has many mechanisms in place to verify the accuracy of the check mailing program and to confirm
that only the approved recipients receive payment. First, unique identifiers are assigned to each potential
claimant at the beginning of the case, which can be used to track that individual through the lifecycle of the
refund program. Multiple staff members independently review each distribution authorization, check the
proposed list of recipients against the master customer list, and investigate any discrepancies before
approving a check mailing. The agency also conducts audits on closed cases to verify that only the rightful
recipients received checks. In a claims process, we may ask for supporting documents or other information,
and we apply analytical tools to root out false claims.
Once checks have been mailed, the FTC carefully tracks how many checks get cashed and how much money
makes it into the hands of affected consumers. This year, the FTC completed 20 first time mailings for FTC
cases. Here are the highlights of each case:
First Distributions, July 1, 2016 – June 30, 2017
Case Name
3
Date of
First
Mailing
Number of
Recipients
Amount
Mailed
Amount
Cashed**
Percent
of Fund
Cashed**
Check
Average
Check
Max
Check
Dolce Refunds
7/19/2016
5,970
$4,076,072
$3,078,714
72%
$684
$4,600
Oro Marketing
9/7/2016
6,192
$1,338,587
$950,432
47%
$216
$9,958
One
Technologies*
9/27/2016
145,301
$19,915,710
$18,976,320
86%
$137
$150
Top Shelf
Marketing
10/10/2016
3,862
$1,194,130
$1,045,378
86%
$309
$309
Fortune Hi-Tech
Marketing
11/8/2016
285,361
$3,778,286
$1,577,136
39%
$13
$13
Centro Natural
Corp.
11/14/2016
3,446
$830,311
$539,964
64%
$241
$2,915
Lumosity*
11/15/2016
13,128
$1,925,540
$1,865,011
93%
$147
$542
AT&T*
12/8/2016
2,793,589
$88,264,823
$84,423,478
81%
$31
$2,676
Tax Club*
12/16/2016
20,352
$18,609,655
$18,149,711
91%
$914
$8,993
3
For more information about any of the FTC cases in these charts, see the Appendix: FTC Case Details.
3
Herbalife
1/10/2017
346,245
$199,514,125
$152,370,190
76%
$576
$9,876
T-Mobile
2/1/2017
617,870
$19,875,828
$13,380,912
62%
$32
$6,660
Mercola*
2/7/2017
1,367
$2,594,013
$2,591,019
99%
$1,898
$3,999
Money Now
Funding
2/17/2017
2,031
$436,011
$369,037
82%
$215
$23,076
Payday Support
3/15/2017
561
$148,520
$131,971
84%
$265
$295
Fair Guide
3/28/2017
974
$535,085
$414,270
76%
$549
$3,329
Rincon
Management
Services
3/30/2017
5,232
$2,748,406
$1,648,011
59%
$525
$3,337
CPU Service
5/11/2017
1,187
$48,453
$36,668
61%
$41
$105
Regency Financial
6/15/2017
288
$109,452
$69,549
59%
$380
$3,550
Information
Management
Forum
6/23/2017
338
$319,621
$267,174
56%
$946
$6,141
Goldman Schwartz
6/30/2017
4,380
$555,469
$376,784
65%
$127
$1,804
*In these cases, recipients were required to file a claim to get a refund.
**These figures are current as of August 31, 2017.
Updating names and addresses
A consistent challenge is finding the most current contact information for eligible recipients. Because court
cases sometimes take years to resolve, the FTC has several tools for updating addresses.
Before mailing checks, every distribution list is checked against the National Change of Address (NCOA)
system, which records change-of-address notices submitted to the U.S. Post Office. When a check is returned
as undeliverable, the agency conducts an address search to determine if there is a more recent address for the
consumer, and then reissues a new check to the updated address.
4
Considering whether an additional check mailing is feasible
After completing several rounds of address updates and check reissues, the FTC considers whether to use any
remaining money to send a second round of checks to recipients who cashed their first check. For example,
recipients might get a 50% refund with the first check and an additional 10% of their money back with the
second check.
In general, if there are sufficient funds to provide a meaningful refund amount to recipients and to pay for the
associated administrative costs, then the FTC sends a second round of checks. The FTC typically enforces a $10
minimum for checks we mail. This year, the FTC completed subsequent distributions in eight cases:
Subsequent Distributions, July 1, 2016 – June 30, 2017
Case Name
Date of
Most
Recent
Mailing
Number of
Recipients
Amount
Mailed
Total Amount
Cashed
(including all
distributions)
**
Percent
of Fund
Cashed
**
Min
Total
Refund
**
Average
Total
Refund
**
Max
Total
Refund
**
JK Publications
7/16/2016
321,982
$9,688,467
$15,901,658
63%
$58
$58
$58
Direct Benefits
Group
9/30/2016
23,899
$988,223
$1,371,011
80%
$66
$66
$66
Daniel Chapter
One
1/6/2017
1,014
$9,541
$44,094
73%
$45
$45
$45
Broadway
Global
1/17/2017
1,203
$149,318
$583,213
96%
$42
$555
$7,320
Zadro Health
2/21/2017
1,696
$38,911
$196,984
89%
$32
$119
$973
Genesis Today
4
5/30/2017
38,553
$1,914,376
$9,692,878
79%
$8
$48
$2,719
TracFone
6/9/2017
1,308,799
$11,761,370
$31,347,235
73%
$3
$27
$98
Vantage
Funding
6/30/2017
285
$15,380
$35,648
11%
$30
$43
$498
**These figures are current as of August 31, 2017, and include previous distributions.
4
In June 2016, the FTC mailed full refunds to nearly 200,000 people who purchased the Genesis Today supplements online. In May
2017, the FTC mailed full refunds to more than 38,000 people who bought the supplements in retail stores.
5
Feedback from the Public
The FTC’s mission is to protect American consumers from illegal business practices. The agency hears from
these consumers on a regular basis. They post blog comments, send thank you notes, and call our toll free
numbers to give feedback and ask questions. We use their feedback to help improve our process, and we
appreciate the kind words from people who have received refunds. Because raw numbers do not tell the
complete story, we have included a sampling of consumer quotes to highlight how FTC refund programs have
had a genuine effect on the lives of real people:
5
“When I saw the check for $492.54 … with a note indicating, “…The enclosed check is your share of the money
that the FTC was able to collect...” I was both surprised and delighted. The money could not have come at a
more opportune time. I recently got laid off, so it really means a lot right now. Thanks again for everything.”
(February 12, 2017)
“I got my check today 1/17/17 on my birthday, very nice thing!!! … Wow, the FTC really is on top of its game.
Bravo!” (January 17, 2017)
“Thank you so very much for your prosecution of One Technologies and sending a portion of the settlement.
The funds were sorely needed and much appreciated.” (December 19, 2016)
“It is refreshing to know that the law works to help people when they have been deceived. Again, thank you
for your well received efforts.” (October 23, 2016)
“Please accept my thanks for all that you and your coworkers are doing. You must all enjoy bringing down the
thieves and deceivers that you catch. I thought I had lost my fights with two of them. They are clever, but you
outdid them and I was compensated. No wonder the thieves hate regulators, especially of your caliber.” (May
10, 2017)
“Thank you so much for helping people that get scammed. My belief in people has taken quite a hit lately. This
helps.” (October 1, 2016)
“Thank you FTC & agencies for getting our money back that was stolen from us...” (October 3, 2016)
“Very best regards, many thanks, and God Bless the FTC, which does such a great job in helping us otherwise
defenseless and oft beleaguered consumers.” (February 22, 2017)
“Thanks so much for protecting us! It’s good to know that sometimes the government is doing all they can to
protect us from companies that just want our money.” (January 7, 2016)
“Thank you for your hard work and diligence! I appreciate it as I am surviving on a small disability check and
supporting my young grandchild, too. Blessings to all who worked for justice for us!!!” (October 5, 2016)
5
Minor typos were corrected for this report.
6
Refund Programs Administered by FTC Defendants and
Other Federal Agencies
FTC staff also provides consultation and support for FTC cases where the court order requires the
defendants—or another federal agency—to conduct a refund program. Only in rare circumstances do FTC
settlements result in self-administered refund programs. When the FTC determines that this is in the best
interest of the affected consumers, the Enforcement Division engages in close oversight and monitoring of the
program. If the defendants failed to conduct them appropriately, they would be in violation of the order. In
these cases, FTC staff provides guidance about the proposed refund program to make sure eligible claimants
receive plain language instructions about how to apply for a refund.
The FTC creates and maintains webpages for each FTC-related refund program, including those that are not
administered by the FTC. This year, there were more than a million visits to these refund pages. A chart that
links to all current FTC refund programs is available at www.ftc.gov/refunds, which is designed to help
consumers verify that the check they have received is legitimate and to answer common questions. This year,
the FTC assisted with four programs that are being administered by the defendant or another federal agency.
Here are the details:
Case Name
Total Dollars Available
URL
Page views
Volkswagen
$11,000,000,000
www.ftc.gov/vwsettlement
175,761
NetSpend
$53,000,000
www.ftc.gov/netspend
23,743
Amazon
$70,000,000
www.ftc.gov/amazon
4,553
Western Union
$586,000,000
www.ftc.gov/wu
5,917
Total
$11,709,000,000
209,974
Conclusion
As part of its mission to protect American consumers, the FTC works to get money back to people who are
harmed by illegal business practices. The Bureau of Consumer Protection enforces a variety of consumer
protection laws enacted by Congress, as well as trade regulation rules issued by the Commission. Its actions
include individual company and industry-wide investigations and administrative and federal court litigation. In
all of its activities, the Bureau works to provide consumer refunds whenever feasible, and then develops
customized refund programs that are designed to get as much money back to as many injured consumers as
possible.
This year, the Commission’s efforts led to billions of dollars in refunds for people across the nation. The data
presented in this report will be used to inform future decisions about FTC refund programs, and to continue to
ensure that the agency’s efforts are effective and efficient.
7
Appendix: FTC Case Details
Case
Product Code Or Type
Link
Amazon
Charges for in-game
purchases by minors
https://www.ftc.gov/enforcement/cases-proceedings/122-
3238/amazoncom-inc
AT&T
Unauthorized charges
https://www.ftc.gov/enforcement/cases-proceedings/132-
3248/att-mobility-llc
Broadway Global
Impostor: Government
https://www.ftc.gov/enforcement/cases-proceedings/1123215-
x120020/broadway-global-master-inc
Centro Natural
Corp.
Third Party Debt
Collection
https://www.ftc.gov/enforcement/cases-proceedings/142-
3159/centro-natural-corp
CPU Service
Business Directory
charges
https://www.ftc.gov/enforcement/cases-proceedings/142-3070-
x140045/your-yellow-book-inc
Daniel Chapter One
Health claims
https://www.ftc.gov/enforcement/cases-proceedings/082-
3085/daniel-chapter-one
Direct Benefits
Group
Payday Loans
https://www.ftc.gov/enforcement/cases-proceedings/112-
3114/direct-benefits-group-llc-et-al
Dolce Refunds
Telemarketing: Other
https://www.ftc.gov/enforcement/cases-proceedings/102-
3173/dolce-group-worldwide-llc-fereidoun-fred-khalilian
Fair Guide
Business Directory
charges
https://www.ftc.gov/enforcement/cases-proceedings/132-3001-
x130040/fair-guide-construct-data-publishers-dba-fair-guide
Fortune Hi-Tech
Marketing
Multi-Level Marketing
https://www.ftc.gov/enforcement/cases-proceedings/112-
3069/fortune-hi-tech-marketing-inc-et-al
Genesis Today
Weight loss claims
https://www.ftc.gov/enforcement/cases-proceedings/122-
3283/genesis-today-pure-health-lindsey-duncan
Goldman Schwartz
Debt Collection
https://www.ftc.gov/enforcement/cases-proceedings/122-3096-
x130029/goldman-schwartz-inc
Herbalife
Multi-Level Marketing
https://www.ftc.gov/enforcement/cases-proceedings/142-
3037/herbalife-international-america-inc-et-al
Information
Management Forum
Timeshare Resales
https://www.ftc.gov/enforcement/cases-proceedings/122-
3105/information-management-forum-inc-et-al
JK Publications
Cramming charges for
adult websites
https://www.ftc.gov/enforcement/cases-proceedings/971-0016-
971-0017/federal-trade-commission-v-jk-publications-inc-et-al
Lumosity
Unverified claims of
increased intelligence
https://www.ftc.gov/enforcement/cases-proceedings/132-
3212/lumos-labs-inc-lumosity-mobile-online-cognitive-game
8
Mercola
Safer tanning beds
https://www.ftc.gov/enforcement/cases-proceedings/142-
3210/mercolacom-llc
Money Now
Funding
Work-at-Home
https://www.ftc.gov/enforcement/cases-proceedings/122-3216-
x130063/money-now-funding-llc
Netspend
Failed to transfer payments
to prepaid cards
https://www.ftc.gov/enforcement/cases-proceedings/netspend-
corporation
One Technologies
Credit monitoring scheme
https://www.ftc.gov/enforcement/cases-proceedings/132-
3021/one-technologies-lp
Oro Marketing
Telemarketing: Other
https://www.ftc.gov/enforcement/cases-proceedings/132-3047-
x140010/oro-marketing-inc-et-al
Payday Support
Payday Loans
https://www.ftc.gov/enforcement/cases-proceedings/142-3110-
x150027/payday-support-center-llc
Regency Financial
Auto loan negotiator
https://www.ftc.gov/enforcement/cases-proceedings/142-
3059/regency-financial-services-llc
Rincon
Management
Services
Third Party Debt Collection
https://www.ftc.gov/enforcement/cases-proceedings/112-
3142/rincon-management-services-llc
Tax Club
Business Opportunity Scam
https://www.ftc.gov/enforcement/cases-proceedings/122-3071-
x130019/tax-club-inc-et-al
T-Mobile
Unauthorized third party
charges
https://www.ftc.gov/enforcement/cases-proceedings/132-
3231/t-mobile-usa-inc
Top Shelf Marketing
Business Opportunity Scam
https://www.ftc.gov/enforcement/cases-proceedings/142-
3228/top-shelf-marketing-corp
TracFone
Unlimited data plans
https://www.ftc.gov/enforcement/cases-proceedings/132-
3176/straight-talk-wireless-tracfone-wireless-inc
Vantage Funding
Payday Loans
https://www.ftc.gov/enforcement/cases-proceedings/1323055-
x130057/caprice-marketing-et-al
Volkswagen 2.0
Misrepresented auto
emissions
https://www.ftc.gov/enforcement/cases-proceedings/162-
3006/volkswagen-group-america-inc
Volkswagen 3.0
Misrepresented auto
emissions
https://www.ftc.gov/enforcement/cases-proceedings/162-
3006/volkswagen-group-america-inc
Western Union
Payment processing
https://www.ftc.gov/enforcement/cases-proceedings/122-
3208/western-union-company
Zadro Health
Health claims
https://www.ftc.gov/enforcement/cases-proceedings/152-
3095/zadro-health-solutions-inc
9