FTC blows the whistle on ‘get-rich-quick’ scheme

WASHINGTON, DC — June 27, 2017. The U.S. Federal Trade Commission put a stop to a ‘get-rich-quick’ scheme that allegedly lured consumers with a supposedly personalized “Business Coaching Program”.  According to the FTC, defendants behind the alleged scam have agreed to be banned from selling shady investment products and settle Federal Trade Commission charges in a deceptive telemarketing scheme that took millions of dollars from thousands of consumers who were trying to start home-based online businesses.

The complaint alleges that a Utah-based company called Guidance hired telemarketing outfits – “sales floors” – to pitch its supposedly personalized business coaching services.

Since August 2013, Guidance has sold purported personalized business coaching services and related products to consumers trying to start an online business. Company engaged numerous telemarketing sales floors (“Sales Floors”) to market and sell the “Business Coaching Program”.

The Sales Floors have used a variety of deceptive sales tactics to induce consumers to purchase the ‘get-rich-quick’ products. Consumers typically paid thousands of dollars – most of it charged on their credit cards – for the “Business Coaching Program” based on false promises that these services would enable consumers to start their own successful Internet business.

The Sales Floors typically did not disclose to consumers that Guidance provided the actual coaching services they were selling. When communicating to consumers while providing the coaching services, Guidance employees typically represented that they were associated with the Sales Floor or used a generic brand name like “Focus” or “Mentor Group.” Thus, consumers typically were not even aware that Guidance provided the purported coaching services they purchased.

According to the complaint, Utah-based company provided the Sales Floors with marketing materials that describe the “Business Coaching Program” to include individualized training from “experienced instructors” with access to a “curriculum” consisting of online video tutorials and webinars about eBay, affiliate marketing, dropshipping, and building a website.

Guidance’s marketing materials also included testimonials of people purportedly having success and making money from the “Business Coaching Program”. The Sales Floors placed these testimonials on their own websites and referred to these success stories in their sales calls.

The FTC alleges in two separate complaints that Guidance and two of the sales floors – Discover and PLI – violated the FTC Act and the Telemarketing Sales Rule. According to the lawsuits, most people didn’t get the advertised services or the promised earnings.

According to the press release, to settle the case, the defendants have agreed to broad injunctive provisions and lifetime bans from business coaching or work-at-home opportunities, with narrow exemptions for certain lawful business activities. The orders include financial judgments which, based on the defendants’ financial condition, will be partially suspended after they turn over a total of $2.1 million in cash and assets worth as much as $300,000.

Source: FTC

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