In 2015, the Federal Trade Commission obtained court orders banning a group of marketers that allegedly cheated American and Canadian consumers out of more than $7 million from selling business or work-at-home opportunities.
The orders resolved charges that the defendants conned consumers into believing they could make money by referring merchants in their area to a non-existent money-lending service. Victims included financially vulnerable seniors.
The FTC’s complaint, filed in August 2013, alleged false claims that consumers would earn up to $3,000 per month by referring small businesses to the defendants to obtain loans. After consumers paid up to $499 to purchase the business opportunity, the defendants allegedly told them that, to succeed, they had to buy sales leads that cost tens of thousands of dollars but turned out to be worthless.
The defendants purportedly attempted to avoid detection by changing product names, office locations and merchant identities.
The 2015 announcement described the court’s summary judgment orders against three defendants, settlements with others, and default judgment against the remaining defendants.
The various judgments and settlements imposed a ban on selling business or work-at-home opportunities on a number of defendants. Some defendants were also banned from telemarketing. In addition, the judgments and settlements include provisions that apply specifically to certain defendants, prohibiting them from engaging in the types of misconduct alleged by the FTC.
The judgments and settlements also imposed monetary judgments of $7.3 million against 12 defendants, and smaller judgments against others. The judgments against some defendants were suspended due to their inability to pay and, in some cases, pending the transfer of assets frozen by the court or held in receivership. The full judgments will to become due immediately if the defendants are found to have misrepresented their financial condition.
On February 17, 2017, the Commission announced that it would be mailing checks totaling more than $436,000 to people who lost money to the alleged scheme. The Commission states that people who lost money will receive an average of $214.68. Recipients should deposit or cash checks within 60 days. The FTC never requires people to pay money or provide account information to cash refund checks.