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Your weekly ScamWatch

July 25, 2010 |  6:00 am

Here’s a weekly roundup of alleged cons, frauds and schemes to watch out for.

No relief: A Tacoma, Wash., company that charged up to $899 for a program that falsely promised to reduce consumers’ credit-card debt has agreed to pay $1.5 million to settle a lawsuit brought by the Federal Trade Commission. The money will be used to reimburse victims of Mutual Consolidated Savings, which used an aggressive telemarketing campaign to pitch a phony debt relief program to victims in the United States and Canada. A federal judge signed the settlement agreement Monday. Under the order, the company and its officers were banned from working in the debt relief industry.

Free means free: The FTC has sent warning letters to 18 credit-report websites for failing to inform consumers of a federal program that offers no-strings-attached free credit reports. The FTC’s Free Credit Reports Rule took effect April 2 and requires companies that sell credit-monitoring services to inform consumers of free credit reports available at and The law is intended to help consumers distinguish between the free credit reports and other programs that promote free reports but often charge fees for credit monitoring.

U.N. scam: The United Nations is warning prospective job candidates to steer clear of Internet promotions that charge fees or ask for bank account information to apply for U.N. jobs. The U.N. does not charge a fee at any stage of the recruitment process, the U.N. said in a warning to prospective job candidates. It also does not request information about applicants’ bank accounts or conduct lotteries.

False advertising: Sears, Roebuck and Co. and Kmart have agreed to pay $1.1 million to settle a civil lawsuit that accused the retailers of charging more for merchandise than they advertised. The lawsuit also alleged that Kmart charged beverage customers more for California Redemption Value than allowed by law. Both companies agreed to the settlement without admitting wrongdoing, said Los Angeles County Deputy Dist. Atty. Stuart Lytton of the consumer protection division. As part of the settlement agreement, the retailers agreed to maintain compliance programs for three years and conduct in-store audits to make sure they are not overcharging.

--Stuart Pfeifer