Feeds

Feds demand Obama scam ads crackdown

Facebook and Google get pat on head

Secure remote control for conventional and virtual 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. ®

The essential guide to IT transformation

More from The Register

next story
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Felony charges? Harsh! Alleged Anon hackers plead guilty to misdemeanours
US judge questions harsh sentence sought by prosecutors
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
This'll end well: US govt says car-to-car jibber-jabber will SAVE lives
Department of Transportation starts cogs turning for another wireless comms standard
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.