LAS VEGAS (CN) – The Federal Trade Commission wants to shut down dozens of companies that have fraudulently induced customers to buy bogus home-based Internet “business coaching services” since 2007. “Consumers who continue to make refund requests are often berated and insulted,” the FTC says in its federal complaint.
Twenty-eight institutions, including Ivy Capital, Fortune Learning and the Enrich Wealth Group and 12 people are named as defendants.
The FTC says the defendants marketed a program they claimed would help consumers create their own businesses, but that “consumers rarely, if ever, make any money as a result of the program or end up with a viable business of any kind.”
The companies get telephone numbers from consumers who responded to unrelated email or ads about work-at-home or Internet business opportunities, according to the 30-page complaint.
During sales calls, the defendants’ sales reps use “high pressure sales tactics” to sell the coaching program, and tell consumers that they can make millions of dollars if they “act quickly because there are hundreds of people waiting to purchase the program,” according to the complaint.
The reps do not identify themselves, nor do they specify what type of Internet business the consumers will run or what will be expected of them, the FTC says.
The sales reps falsely claim that their sucker can earn $3,000 to $10,000 a month, the FTC says, adding that “the vast majority of purchasers … are unsuccessful in establishing Internet businesses.”
For $2,000 to $20,000, depending on the consumer’s credit, the defendants promise to provide a personal business coach, coaching sessions, unlimited email support, access to “Webinars” and articles, and technical and Web design help.
But the coaches provide “little or no substantive guidance,” and many of the videos contain “merely common-sense advice or inspirational videos,” the FTC says.
In some instances, consumers were pressured into signing an electronic contract during the sales call without giving them time to read the contract.
“Within days, weeks or months of purchasing the program, consumers discover that it is nearly impossible to establish a profitable Internet business, even if they work substantially more than 5 to 10 hours a week and follow all the steps of the program,” the FTC says.
Defendants have a strict 3-day refund policy and a “non-disparagement” contract that forbids their victims from saying or doing anything that could “embarrass” defendants, according to the complaint.
And because the defendants rarely provide any products or services in the first 3 days of the contract, consumers have no way of evaluating their purchase until it’s too late.
Victims who ask for a refund face a series of obstacles, the FTC says, including being unable to reach a sales rep within the 3-day window. If they do get through, they are often told conflicting information on how to get their money back.
To top it off, the FTC says: “Consumers who continue to make refund requests are often berated and insulted.”
The FTC wants the defendants’ assets frozen, rescission of contracts, disgorgement and penalties.
Here are the defendants: Ivy Capital Inc.; Fortune Learning System; Fortune Learning; Vianet Inc.; Enrich Wealth Group LLC; Business Development Division LLC; Nevada Corporation Division Inc.; Corporate Credit Division LLC; Credit Repair Division LLC; Tax Planning Division LLC; Zyzac Commerce Solutions Inc.; The Shipper LLC; 3 Day MBA LLC; Global Finance Group/ Virtual Profit LLC; Dream Financial; ICI Development Inc.; Ivy Capital LLC; Logic Solutions LLC; Oxford Debt Holdings; Revsynergy LLC; Sell It Vizions LLC; Kyle G. Kirschbaum; John H. Harrison; Steven E. Lyman; Benjamin Hoskins; Christopher Zelig; Steven Sonnenberg; James Hanchett; and Joshua Wickman.
Here are the relief defendants: Cherrytree Holdings LLC; Oxford Financial LLC; S & T Time LLC; Virtucon LLC; Curva LLC; Mowab Inc.; Kierston Kirschbaum; Melyna Harrison; Tracy Lyman and Leanne Hoskins.