The Federal Trade Commission is sending $1.6 million in recovered funds to 24,916 consumers it said were scammed each for about $100 or more by phony debt collectors who harassed and threatened their victims. They will start receiving checks this month. The operators of the scam were charged with harassing and abusing consumers; falsely threatening criminal prosecution; illegally communicating with third parties; collecting amounts that were not due; and other violations of federal laws.

The Federal Trade Commission today proposed a new rule banning upfront fees by companies promoting mortgage modification services to rescue distressed homeowners from foreclosure. The move is an attempt by the government’s consumer protection agency to shield homeowners from firms that accept hundreds, if not thousands of dollars, then fail to deliver.

The beginning of a new year marks the arrival of the first post-holiday credit card statements and the realization for many that they may need to turn to debt relief companies for help. But consumers groups are warning credit card users that so-called debt consolidation plans could leave you with more debt – in the form of fees that can run as high as $4,000 for total debt of about $20,000 in the first half of a debt settlement agreement. In many debt settlement plans, consumers make monthly payments, usually into a special bank account, until “there is enough to make a lump-sum settlement offer to their creditors,” according to, the prominent non-profit organization which publishes Consumer Reports. The debt settlement companies, however, immediately start taking their fees out of this account.

The New York Attorney General’s office is investigating 22 popular online retailers that “deceptively” link consumers to fee-based membership programs labeled as discount offers, the state’s attorney General, Andrew M. Cuomo, announced today. Already, Cuomo’s office said it has reached an agreement with the online movie ticket retailer Fandango to end such a practice.

Blippy, the ‘Twitter’ for credit card purchases that went live this month, could be targeted by cyber criminals that could use the personal information posted on the social media site to create effective phishing emails, according to a prominent cyber security firm. The site has privacy safeguards in place, but there is enough revealed in the postings to help cyber fraudsters construct phishing schemes aimed at Blippy users, according to Cyveillance, a provider of online security solutions to protect organizations from cyber attacks, including phishing and malware.

The Federal Trade Commission will review the practices of the nation’s top debt buyers, who often hire the debt collectors that are drawing complaints from consumers. When the debt-buying companies hire debt collectors, or assume the role on their own, mistakes are made that result in “debt collectors frequently try to collect from the wrong consumers or the wrong amounts, or both,” the FTC said.

The Federal Trade Commission today launched its website and blog for National Consumer Protection Week 2010, which offers guidance on crucial issues regarding credit cards, mortgages, managing debt, avoiding identity theft and keeping clear of scams. The site – – commemorates the 12th annual event, the week of March 7-13. This year’s theme, “Dollars & Sense: Rated ‘A’ for All Ages,” stresses the importance of “using good consumer sense at every stage of life – from grade school to retirement,” the FTC said.

The Federal Trade Commission has lowered the maximum a consumer can be charged for an extra credit report, from $11 to $10.50, effective Jan. 1. The $10.50 charge applies when a consumer, who has already received a free annual credit report, does not otherwise qualify for an additional free report.

Lenders who offer less favorable terms to some based on their credit report will have to provide the borrowers with so-called “risk-based pricing” notices, according to new rules reported today by the Federal Reserve and the Federal Trade Commission. The rules mean that now consumers with some negative information on their credit reports will be better informed and be able to track vital credit scoring factors. And they will be able to do so more cheaply. Risk-based pricing notices enable consumers to obtain a free credit report.

Combine the Twitter concept with your credit card purchasing habits and you get Blippy, a new social media site in beta testing now and launching next year that lets your friends – or anybody – keep track of what you’ve bought with plastic. Blippy’s founder is Internet entrepreneur Philip Kaplan, the former chief executive at AdBrite, which places ads on more than 100,000 affiliated sites and had 2008 revenue of $31.6 million.