The Federal Trade Commission reached settlements late last week to permanently shut down a Web site that allegedly deceptively touted free government grants for personal expenses or paying off debt.
The FTC charged that In Deep Services Inc. and its principals, doing business under the name "Grant$ For You Now", asked for consumers’ credit or debit account information to process a $1.99 fee for grant information.
The operators of the site debited consumers' bank accounts without any approval. The federal government does not provide grants to consumers for personal expenses or paying off debts.
The settlement orders impose a judgment in the amount of $9 million, which will be suspended if the defendants pay back taxes owed to the Internal Revenue Service and the state of California - and surrender their remaining assets to the FTC.
The settlement bans the defendants from marketing or selling any grant-related product or service, or from marketing or selling any continuity or “negative option” program where consumers have to opt out to keep from being charged.
The fee the defendants charged allowed consumers access to a “members only” section of their sites that claimed to contain information on how to get government grants. In reality, that portion of the site included inaccurate and obsolete information.
The FTC charged that the operators failed to disclose that consumers who signed up would be hit with recurring monthly charges of $72 to $95 and a one-time additional charge of $19.12. All of the defendants’ sites falsely offered a “100% No Hassle Money Back Guarantee.”
The defendants’ operations have been shut down since June 23, 2009, when the FTC sued them and a judge issued a temporary restraining order.