The Federal Trade Commission announced Nov. 24 that it has reached legal settlements with the operators of websites that deceptively touted free government grants for personal expenses and paying off debts. The sites charged participants' bank accounts without authorization.

The FTC sued Ryan Champion, Joseph C. Fleming IV, and In Deep Services, Inc., who ran websites under the name "Grant$ For You Now," as part of a crackdown called "Operation Short Change." Under the settlement, the defendants cannot market or sell any grant-related product or mount any future effort in which consumers have to opt out to keep from being charged. They are also prohibited from automatically debiting consumers' accounts without authorization.

The sites, which were shut down June 23, 2009 through a restraining order, charged consumers' debit and credit cards a $1.99 fee for access to a "members only" section of the website which claimed to have information on obtaining government grants. It then charged users a one-time charge of $19.12, and recurring monthly charges of $72 to $95.

The settlement also orders defendants to pay $9,042,070, although the commission will agree to suspend total payment should the defendants pay back taxes owed to the federal government and the state of California and surrender their remaining assets to the FTC.

For more:
- see the press release
- see the initial FTC complaint
- see the final order against In Deep Services, Inc. (.pdf)
- see the final order against Ryan Champion (.pdf)
- see the final order against Joseph C. Fleming IV (.pdf)

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