PYMNTS MonitorEdge May 2024

FTC Settlements Ban 3 Defendants From Sweepstakes, Prize Promotions

The Federal Trade Commission (FTC) has reached settlements with three defendants, banning them from sweepstakes and prize promotions.

These settlements resolve a complaint the FTC filed against Matthew Pisoni, Marcus Pradel and John Leon in 2015, alleging that they operated a sweepstakes scam that took over $28 million from consumers in the United States and at least six other countries, the agency said in a Monday (June 24) press release.

The FTC’s complaint alleged that the defendants mailed personalized letters falsely telling consumers that they had won large cash prizes, that they had to mail a fee to the defendants to collect prizes, and that they would forfeit their winnings if they didn’t do so, according to the release.

The complaint also alleges that the defendants had no connection to any sweepstakes and could not award any prizes, per the release.

Under the terms of the settlement, the defendants are permanently barred from any involvement in any sweepstakes or other form of prize promotion, from any deception related to any product or service, and from using any consumer information they acquired through running the sweepstakes scam, according to the release.

“While these settlements will keep these defendants from harming more consumers with bogus prize claims, they will unfortunately not return money to consumers,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release.

“Since the case was first filed, the Supreme Court’s decision in the AMG Capital Management case removed our ability to put the money defendants took back in consumers’ pockets,” Levine said. “It is urgent that Congress restore the commission’s ability to make consumers whole when they are targeted by scammers.”

The Supreme Court ruling in that case curbed the ability of the FTC to recover money fraudulently obtained from consumers by individuals or enterprises.

The court ruled that a provision of the Federal Trade Commission Act — Section 13(b) “does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.”

Lawsuits filed by the FTC before that ruling resulted in over $324 million in refunds to consumers in 2023, the agency said Friday (June 20).