Consumer Fraud

FTC Shuts Down Military Copycat Websites

whistleblower USA FTC Shuts Down Military Copycat WebsitesThe Federal Trade Commission (FTC) said it has resolved civil charges against two Alabama-based companies that ran copycat military websites to trick potential recruits into submitting their personal information, which they then sold to post-secondary schools for profit.

According to the FTC, Sunkey Publishing Inc. and Fanmail.com LLC have agreed to surrender Army.com, Armyenlist.com, Navyenlist.com, and other domain names. The agency said the companies used the websites to generate admissions leads, which they sold to post-secondary schools for $15-$40 per lead.

The FTC’s complaint alleged that the companies created the copycat websites to appear to be official recruiting websites affiliated with the U.S. military. The websites prompted viewers to submit their information to learn more about joining the armed forces, according to the FTC.

The FTC also said that the website operators promised to use the submitted information only for military recruitment purposes and not share it with anyone else.

Yet people who submitted their information to the websites reported that they received a barrage of phone calls from telemarketers who continued the misrepresentations by posing as members of the military, touting specific schools, and giving consumers the false impression that the U.S. military actually endorsed those schools.

The FTC charged the defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule. The agency also alleged that they violated the “Do Not Call” provisions of the Telemarketing Sales Rule by placing hundreds of thousands of illegal telemarketing calls to phone numbers on the National Do Not Call Registry.

The two proposed orders settling the FTC’s charges require the defendant companies to turn over to the FTC the websites used to deceive consumers. According to the FTC, surrender of these website domains partially satisfies more than $12 million in civil penalties lodged against the website operators. The judgments are otherwise suspended due to defendants’ inability to pay, the FTC said. But if the companies are later found to have misrepresented their financial condition to the FTC, they would be forced to pay the full $12.1 million.