What's Up Doc? FTC Shuts Down Bogus Certification Operation

The Federal Trade Commission recently entered into a settlement agreement with SmartClick Media and Robert Vozdecky - one of its principals - over claims that SmartClick’s operation was a sham. And it’s an interesting lesson about the ways some people will make a buck in the online world.

SmartClick’s product offering was a certification service that placed "Doctor Trusted" seals and certificates on Web sites primarily offering health-related products and services. From June 2013 until at least October 2015, SmartClick’s Doctor Trusted seal included the words "Doctor Trusted" along with the words "click to verify" and a stamp that displayed the current date, which appeared next to the word "Active." The seal often included a stock photo of a male or female doctor with a stethoscope in a lab coat. SmartClick had at one point signed up about 800 Web sites.

For each seal, SmartClick designed a pop-up window that appeared when a consumer clicked on the seal and which remained visible until the consumer clicked to close it. This pop-up window displayed the Doctor Trusted certificate and included the following representations:

Doctor Trusted.org Consumer Protection Certificate

[Website name] was carefully evaluated by an independent medical doctor who reviewed its medical information, claims, products, terms of service, and policies, and has found the site to be trustworthy and safe for purchases as of the time of the review. * * *

[Website] was found to meet the Doctor Trusted code of conduct

-Reasonable science-based health claims

-Ethical pricing and billing policy

-Fair return and refund policy

-Passed due diligence check

ACTIVE AND IN GOOD STANDING AS OF [CURRENT DATE]

Certificate issued on [issue date] by

DoctorTrusted.org Consumer Protection Organization

But the certification process wasn’t all it was cracked up to be. SmartClick recruited two doctors, both of whom specialized in family medicine, and paid them $11 to $15 per Web site reviewed. And SmartClick made it clear to the doctors it recruited that they weren’t expected to do much. In an e-mail to one of the doctors, Vozdecky wrote:

We do pre-screen all websites for you to make sure we send you websites that confirm [sic] to our Doctor Trusted Code of Conduct. Your task would be to double check that the websites are conforming to our set of rules and approve the website. We have ready templates for the approval text, so you do not need to write anything. Usually we would send you 10 to 15 websites once a week for an approval which should take no more than 1 hour of your time in total. Hopefully you would approve most of the websites but if you do not feel confident in approving some you would reject it and give a reason for the rejection.

In its complaint, the FTC noted that SmartClick's Web site represented that:

The products and services offered for sale on the websites have been evaluated by doctors applying their medical expertise; The Doctor Trusted certification is issued by a nonprofit consumer protection organization; and Defendants continuously monitor a website's fitness to display the Doctor Trusted seal and certificate.

But in truth:

The products and services offered for sale on the websites have not been evaluated by doctors applying their medical expertise; The Doctor Trusted certification is not issued by a nonprofit consumer protection organization; and Defendants do not continuously monitor a website's fitness to display the Doctor Trusted seal and certificate.

All of which added up to deceptive conduct. The settlement permanently enjoins SmartClick, Vozdecky and anyone working with them from engaging in this type of conduct. The settlement also called for a payment of $603,588 to the FTC, but the settlement agreed to suspend the payment of all but $35,000 of the agreed sum. SmartClick and Vozdecky were required to submit financial statements, presumably showing their inability to pay the entire amount. The settlement provides that the suspension will be lifted if the financial statements contain any false information.

Who knew that selling fake authenticity was so lucrative? And beware. That “certificate” you see on some products or Web sites really may not be worth anything.

Tech Support Scam Shut Down

If you’ve ever gotten a notice advertising a service to boost your personal computer’s performance, you might want to be careful. A recent Federal Trade Commission proceeding demonstrates how you could be getting scammed.

The case involves two companies – Vast Tech Support LLC and OMG Tech Support LLC. According to a complaint filed by the FTC, the companies had a pretty slick operation going. They offered a service called PC HealthBoost. Consumers who visited pchealthboost.com were offered the opportunity to download a free version of the PC HealthBoost program. That program would perform an automatic “system scan” (editor’s note – the FTC used the quotation marks in its complaint. This is never a good sign for the defendant). Lo and behold, the scan would inevitably turn up errors that slowed down the PC’s performance. 3 But, and you probably saw this coming, the errors had no material impact on the PC’s performance.

According to the complaint, the PC HealthBoost scan flags innocuous and beneficial files found on nearly every computer, such as the computer's temporary files and cookies. Worse, the free scan identifies Windows DLLS (Dynamic Link Libraries) as "errors'' to be removed, which could potentially cause problems for the computer. The system scan was step one. Step two was to trick consumers into thinking their computers had big problems. Consumers were instructed to “’Click to continue' to restore your PC to full health. (Recommended),''. When consumers clicked the “Continue'' button, they discovered they were required to pay $29.97 for the “Registered'' version of the program in order to fix the vast majority of the so-called "errors."

Many consumers agreed to pay the $29.97 fee for the program (or $43.94 for two years). Apparently, Vast and OMG managed to successfully scare enough consumers to rake in over $51 million in net payments from them. That’s a lot of fear mongering.

Vast and OMG decided it was better to settle with the FTC (and that is typically the case when the FTC files a suit). The settlement enjoins Vast and OMG from:

“Advertising, marketing, promoting, offering for sale, selling, [or] providing . . . any tech support product or service; and [o]wning or controlling any entity advertising, marketing, promoting [or] offering for sale . . . any tech support product or service.” Vast and OMG also agreed to a consent judgment against them in the amount of $27,227,272. That is a huge amount, but as a practical matter, the FTC is not awarding bonuses with that money.

Vast and OMG are in receivership and likely unable to pay anywhere near that amount. The companies agreed, as part of the settlement, to turn over any remaining assets once the companies are wound down.

The good news is that there are at least a few less scammers out there. The bad news is, like roaches, they can never be completely eradicated. Before plunking down any money on an online promotion, it probably pays to do some research.

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