May 16, 2012
Utilizing its “shock and awe” practice of filing a complaint under seal, and getting a TRO, asset freeze and expedited discovery, the Federal Trade Commission halted an operation that allegedly lured consumers into spending thousands of dollars for Internet websites and advertising by misrepresenting that they could make lots of money by linking the sites to major retailers. Such operations are commonly referred to as business opportunity or “biz opp.” businesses.
According to the FTC’s complaint against North AmericaMarketing and Associates LLC and many other entities and individual defendants, for fees ranging from $100 to $400, the defendants promised to build and host websites for consumers, who would earn commissions when Internet users clicked through the consumers’ websites to make purchases from “Fortune 500″ retailers such as Wal-Mart, Best Buy, and Starbucks. The defendants also claimed consumers would get free, full-time marketing expertise to help them make substantial profits.
Thereafter, the defendants would engage in “up selling:” consumers got a follow-up sales pitch from the defendants, who tried to get them to pay even more money for an advertising package that typically cost from $5,000 to $20,000, the FTC alleged. The defendants claimed the package would help generate sales of $3,000 to $20,000 per month, depending upon the size of the package consumers bought.
The defendants are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule (TSR) by misrepresenting that consumers who bought and used websites and advertising packages would earn substantial income, and that experts would help them operate their business.
To learn more about FTC litigation and defense, you can contact Reza Sina at firstname.lastname@example.org or 213-417-3661. Sina Law Group represents individuals and businesses in all stages of enforcement actions brought by the FTC in federal courts nationwide, including defending allegations of false/misleading advertising and marketing, unlawful billing practices, telemarketing violations, and EFTA violations.