MANHATTAN (CN) – A federal class action claims Rich Dad Education and its affiliates use their “free classes” and $199 seminars about financial success as a come-on in a high-pressure “sales scam” to sell worthless courses for tens of thousands of dollars.
Named plaintiff Robert Crewe says Rich Dad’s “sales scam is built on a misleading three-tiered sales pitch where customers are sold increasingly expensive financial training programs using pressures tactics and false promises.”
Crewe says he paid $199 to attend a “Rich Dad Education Stock Success 3-day Training program, which was supposed to provide training and education in trading stocks.”
But he says, “Defendants did not provide any training or education at the workshop. Instead, the sole purpose of the workshop was to up-sell ‘students’ into additional useless but more-expensive coursework and monitoring, which costs up to $64,899 per enrollee.”
Also sued are Cashflow Technologies, Tigrent Learning and two entities, two Rich Dad affiliates, and Robert Kiyosaki, who lives in or around Phoenix and allegedly “approved, authorized, either expressly or tacitly directed, ratified and/or participated in the acts complained of herein”.
Crewe says the defendants advertise their 3-day program as “‘designed to help you effectively pursue the many wealth-building opportunities provided by the stock and options market. You now have the entire Rich Dad education team to share their knowledge and experience in the markets with you. …
“Your 3-Day Training is comprehensive. It will cover everything from thinking like the rich to developing a personal plan and executing on that plan.”
But Crewe says, “Rich Dad Education workshops and training do not provide attendees with any financial education that leads to financial success or independence. Rather, they comprise an aggressive sales scam where attendees are encouraged to spend up to tens of thousands of dollars and encumber themselves with crippling debt to buy useless courses.
“Defendants’ sales scam is built on a misleading three-tiered sales pitch where customers are sold increasingly expensive training programs using pressure tactics and false promises concerning the programs’ ability to produce financial results for trainees. Initially, customers are lured to attend one of two free workshops that are advertised as providing a financial education to attendees in a specific area of investing. However, the workshops do not provide any financial education, and their whole purpose is to sell attendees the paid 3-day training programs that are associated with those free classes. In turn, the purpose of the paid 3-day training programs is not to provide financial education and skills training as promised, but to sell attendees on additional ‘advanced’ training courses and personal mentoring. This is the laddered sales pitch, or up-sell, that forms the core of defendants’ business.
“In large part, the up-sell is executed by defendants’ training instructors who hold themselves out as experts in their investment field but have no discernible investing expertise or successful track record.”
The defendants are Rich Dad Education LLC, Rich Global LLC, Rich Dad Operating Co. LLC, Cashflow Technologies Inc. Tigrent Inc; Tigrent Learning Inc., Tigrent Brands Inc., and Robert Kiyosaki.
Crewe seeks costs and damages for breach of contract, breach of implied covenant of good faith and fair dealing, violation of the Florida Deceptive and Unfair Trading Practices Act, unjust enrichment, negligent misrepresentation, and fraud.He is represented by Scott A. Bursor with Bursor & Fisher.