The Federal Trade Commission recently announced several actions under “Operation Empty Promises,” a campaign against companies that falsely promise opportunities to “be your own boss” and guaranteed jobs.
The agency joined forces with several other agencies, including the Department of Justice and the Postal Inspection Service, as well as 11 state attorneys general to announce a total of 90 enforcement actions.
The FTC filed complaints in three enforcement actions, including one against Ivy Capital and 29 named codefendants, which the agency alleged used telemarketers to convince consumers to purchase a business coaching program through available credit on their credit cards. The program was worthless, according to the FTC complaint, and some consumers paid up to $20,000 for software programs that did not work properly and coaches who did not have the expertise the company promised.
In a second complaint filed against the National Sales Group and its owners, the FTC alleged that the defendants used online job boards to advertise nonexistent sales jobs. According to the FTC complaint, telemarketers for the company claimed that they recruited for Fortune 1000 employers, and defrauded consumers out of at least $8 million by overcharging or charging on a recurring basis for background checks or other services.
The FTC alleged in a third complaint that one company, Business Recovery Services LLC, violated the Telemarketing Sales Rule by selling hundreds of variations of do-it-yourself kits to help consumers recover money they had lost to work-at-home schemes. Priced up to $499, the company’s kits misrepresented the nature and effectiveness of their services and took advance fees from consumers.
In addition to the three new cases, the agency announced the shutdown of one operation and settlements or final court orders in six other cases, as well as 48 criminal actions by the DOJ, 7 actions by the Postal Inspection Service, and 28 state law enforcement actions.
To view a video of FTC attorney Daniel Hanks discussing the campaign, click here.
For more details on the campaign and to read the complaints, click here.
Why it matters: “The victims of these frauds are our neighbors – people who are trying to make an honest living,” David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection, said at a press conference announcing the campaign. “Under pressure to make ends meet, they risked their limited financial resources in response to the promise of a job, an income – a chance at a profitable home-based business. But these turned out to be empty promises – and the people who counted on them ended up with high levels of frustration and even higher levels of debt.” The agency said Operation Empty Promises is an ongoing, multiagency campaign that has been ramped up due to the economic downturn and higher unemployment.