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Friday, May 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

FTC Slaps Wrist of Company That Netted $6.8M on False ‘Mystery Shopper’ Job Ads

LOS ANGELES (CN) - After netting $6.8 million by falsely promising mystery marketing jobs for an initial fee, eight defendants agreed last week to collectively pay $850,000 in a settlement with the Federal Trade Commission.

"A job as a mystery shopper sounds like fun to a lot of people, so there's a receptive audience for offers of this kind of work" says Betsy Lordan, the FTC's media contact.

"It's common for wrong doers to change the names of their businesses and try the same scam again" she said, when answering whether the settlements would stop the defendants from committing future fraud.

Mystery Shop Link, Tangent Group, and Harp Marketing Services advertised job openings for mystery shoppers in exchange for a $99 fee. Mystery shoppers are paid to report on their experiences as consumers, dining and shopping.

Despite the promise of a steady full-time or part-time job, clients who paid the $99 fee received only a certificate and links to mystery shopper job-listings of other companies.

Most clients did not get a job as mystery shoppers.

In addition to their charges of deceptive marketing, Robin Murphy, Andrew Holman, Kenneth Johnson, Mystery Shop Link, and Tangent Group settled their charges of contempt of a 1997 judgment against Murphy on a case involving telemarketing fraud promising government jobs.

This first settlement permanently banns Murphy from telemarketing except to businesses of telecommunications equipment and allows the FTC to collect the proceeds of Murphy's $100,000 bond. A $17.8 million judgment was made, but suspended since the defendants couldn't pay.

Harp Marketing Services, which is based in Melbourne, Florida, handled most of the telemarketing and sales of Mystery Shop link, which is based in Portland, Maine.

In the second settlement, Harp Marketing Services and its directors, Aiden Reddin and Marc Gurney, must pay $750,000 in redress. A $6.8 million settlement was suspended because of an inability to pay.

Despite Murphy being the only one involved in the 1997 fraud, the four others were held in contempt of the judgment because they knew of the judgment while committing the more recent fraud.

The settlement involving Mystery Shop Link was presided over by United States District Court Judge Terry Hatter Jr. Laurence Strick of Stolar and Associates is defending Mystery Shop Link, Tangent Group, and Holman.

For the second settlement, Jon Hill from Venable LLP represents Harp Marketing Services, Reddin, and Gurney.

Guy Ward represents the FTC in both settlements.

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