FTC Targets Deceptive Business Opportunity Schemes

(James Limbach Consumer Affairs) More than 70 actions brought by FTC and law enforcement partners! A Washington, D.C., reporter for more than 30 years, Jim Limbach covers the federal agencies for ConsumerAffairs. Previously, he was a reporter and news anchor for Associated Press Broadcast Services, where he covered business and consumer news as well as space shots and other major spot news events. Read Full Bio→

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The Federal Trade Commission (FTC) is going after scammers promising job opportunities and the chance “be your own boss” to people are unemployed or underemployed.

The agency is taking seven new law enforcement actions -- six of which are the first cases brought under its recently updated Business Opportunity Rule -- which requires business opportunity sellers to provide specific information to help consumers evaluate a business opportunity and provides a simple, one-page disclosure form.

As part of a continuing federal-state crackdown, “Operation Lost Opportunity” targets scams that took millions of dollars from more than two million consumers. The defendants in the FTC’s cases allegedly lured consumers with deceptive offers to help them start businesses as mystery shoppers, credit card processors, Website operators, and government insurance refund processors.

Widespread action

This joint effort by the Consumer Protection Working Group of the Financial Fraud Enforcement Task Force also includes 22 actions brought by the Department of Justice, 15 administrative actions by the U.S. Postal Inspection Service, and 20 actions by state attorneys general in Indiana, California, Arizona, Colorado and Ohio.

Earlier federal-state enforcement efforts against consumer financial fraud include Operation Empty Promises, Operation Bottom Dollar and Operation Short Change.

“The scam artists the FTC shut down lied to people trying to make an honest buck, and robbed them of their money as well as their hopes,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “We brought these cases on behalf of millions of people who wanted to jumpstart their incomes and rebalance their budgets -- people who placed their hopes in a business opportunity so they could better provide for their families.”

The defendants in the FTC cases allegedly committed multiple violations of the FTC Act, including misrepresenting how much money people could make through the business opportunity. The defendants in six of the cases also allegedly violated the amended Business Opportunity Rule.

FTC law enforcement actions

The agency took actions against the following companies

  • Shopper Systems, LLC; Revenue Works, LLC, also doing business as Surplus Supplier; EMZ Ventures, LLC; The Veracity Group, LP; Brett Brosseau; Michael Moysich; and Keith R. Powell allegedly sold the business of providing mystery shopping services to retailers, offering lists of merchants seeking mystery shoppers in the buyer’s area.
  • American Business Builders LLC; ENF LLC, also doing business as Network Market Solutions; UMS Group LLC; United Merchant Services LLC; Universal Marketing and TrainingLLC; Unlimited Training Services LLC; Shane Michael Hanna, also known as Shane Michael Romeo; and Stephen Spratt took tens of thousands of dollars from consumers, allegedly falsely promising that they would set up a profitable credit card processing business for the consumers.
  • The Online Entrepreneur Inc., also doing business as The Six Figure Program and Ben and Dave’s Program; Ben and Dave’s Consulting Associates Inc.; Benjamin Moskel; and David Clabeaux allegedly sold consumers a no-risk, money-back guaranteed opportunity to make money via their own Website.
  • Career Advancement Group. According to the FTC’s complaint, the defendants have operated a nationwide job scam by placing ads in classified sections of newspapers and on job search Websites that appear to be postings for jobs with the U.S. Postal Service.
  • Smart Tools LLC and Kirstin Hegg allegedly sold a home-based business opportunity thatpromised purchasers they could become “Government Insurance Refund Processors.”
  • Rebate Data Processor. Christopher Andrew Sterling, doing business as rebatedataprocessor.com, sterlingvisa.com, and creditcardworker.com, and via links to those Websites from other Websites, allegedly claimed consumers could earn from $200 to more than $1,000 per day by processing applications for rebates or credit cards offered by certain marketers.
  • The Zaken Corp. and Tiran Zaken allegedly used direct mail and a Website to sell a plan that, for a fee of $148 or more, supposedly would enable consumers to earn thousands of dollars per month.