A federal court entered a temporary restraining order halting an allegedly deceptive scheme that conned millions of dollars from consumers, the FTC announced Monday.
According to the FTC charges, the businesses’ websites told numerous false “rags to riches” stories and made unsubstantiated claims that consumers could earn thousands of dollars a month by purchasing business coaching services and establishing their own internet businesses.
The FTC seeks to put a permanent stop to the operations of the company — which did business under several names, including Essent Media, LLC, Net Training, LLC, YES International, Coaching Department, and Apply Knowledge — and for money to be returned to affected consumers.
The company allegedly violated the FTC Act by misrepresenting earnings and the nature of services. It also allegedly violated the FTC’s Telemarketing Sales Rule by misrepresenting material aspects of investment opportunities.
The scheme worked in three interconnected phases. In the first phase, consumers were enticed by deceptive emails and websites to purchase work-at-home kits costing $37 to $99. The second phase promised consumers would earn thousands of dollars a month using a coaching program to assist in their online business. The system generally cost $3,000 to $12, 000 and consumers were urged to put the cost on their credit cards, leaving many heavily in debt. During the third phase, the company pretended to provide consumers with coaching services while pitching additional costly add-on services.
A preliminary injunction hearing is set for March 20.
In a similar case last week, the FTC announced a series of settlement orders totaling $55.3 million stemming from a 2012 complain that several companies deceived consumers with business or work-at-home opportunities. In reality, the organizations in question tricked consumers into paying to join programs that then had recurring monthly charges.
FTC Halts Multi-Million Dollar Work-From-Home Business Coaching Scheme [Federal Trade Commission]