Feeds

Feds demand Obama scam ads crackdown

Facebook and Google get pat on head

Remote control for virtualized desktops

US federal regulators are telling online advertisers like Google and Facebook to crack down on scam artists that are promising users a personal slice of Obama's $787bn economic stimulus package.

Fraudster ads and emails have mushroomed in recent weeks tempting debt-laden patsies with the quick fix of "free" stimulus grant money – all they need to do is provide personal information, download software, or provide a small down payment. It's a typical online scam at heart, but the ruse using Obama as bait has attracted special attention from the US Federal Trade Commission.

A typical stimulus scam ad

Eileen Harrington, acting director of the FTC's Bureau of Consumer Protection, warned in a press conference on Wednesday that stimulus scam ads are now being plastered on social networking sites, streaming video sites, search engines, and more. She said the FTC has already reached out to Facebook and Google to start blocking the ads and both have been cooperative. When asked if other websites have been less congenial, Harrington said she's not going to name them now, but they "will be hearing from us."

"I would hope that this would really be a showcase opportunity for online media companies to do meaningful ad screening," she said. "We spent a lot of time at the Federal Trade Commission educating advertisers how to screen for and remove problematic ads, and this one should be a no-brainer."

She said a typical example of the stimulus scam is located at presidentobamagrants.com (the website is currently down, and we don't suggest you go there anyway). The site promises $25,000 in free grant money to pay off personal debts once you sign up. The catch is in the terms of service contract, which most users tend to click through without reading. By signing up the users agrees to an initial $1.99 charge for a trial membership. But if you don't cancel in 40 days, the user gets billed a fee of $99 for full membership. After that, there's an extra $49.95 charge every month for access to the website's "resources." Signing up also automatically enrolls the user into 21 day trial of a second program – which charges $29.95 per month if not canceled.

"These websites tout free money for you, but as the saying goes, the devil is really in the details," Harrington said.

Facebook received a special nod from the FTC for being quick to pull stimulus-related scam ads. At the press conference, Harrington brought along Joe Sullivan, Facebook's top lawyer, who said the website began noticing ads five weeks ago, before the Commission contacted the company. Sullivan said the scams were spotted through a combination of Facebook's own vetting process and the website's "thumbs up / thumbs down" user feedback function on advertisements.

Google also received a nod from the FTC, although the language Harrington used was that the search engine said it's "committed to investigate stimulus-related ads that violate its anti-scam policy." Obviously, the scope of ads being served by Google is much larger than Facebook's, but Obama stimulus grant ads are still quite prevalent as of today.

The FTC said it won't discuss whether it's currently going after any of the fraudsters, although Harrington noted the Commission has "broad authority to take action against unfair advertising practices." She said some of the remedies the agency could seek range from prohibiting certain claims in the ads, shutting down the websites, or ordering that money be returned to customers.

Whether the federal hammer is dropped or not, the FTC wants ad-serving websites to take the initiative.

"It doesn't benefit anyone to go to a legitimate website and get pitched by scam artists," Harrington said.

The FTC warns unwary surfers that the stimulus package doesn't include any grants for personal financial assistance. Lists of actual government grants are also published online for free. The agency's consumer alert on stimulus scams is located here. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
NATO declares WAR on Google Glass, mounts attack alongside MPAA
Yes, the National Association of Theater Owners is quite upset
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Managing SSL certificates with ease
The lack of operational efficiencies and compliance pitfalls associated with poor SSL certificate management, and how the right SSL certificate management tool can help.