Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC stops allegedly bogus envelope-stuffing scheme, (Nov 30, 2015)

By Greg Hammond, J.D.

The federal district court in New York has entered a stipulated preliminary injunction prohibiting a company that bilked more than $7 million from consumers from making false claims consumers could earn up to $5,000 or more in weekly income by stuffing and mailing “special advertising letters” from home (FTC v. Capital Enterprises, Inc., File No. 142 3269, Dkt. 1:15-cv-08407-ER).

In its complaint, the FTC alleged that Capital Enterprises, Inc., Carson Lord Enterprises, LLC, Java Enterprises, LLC, Mason Grace Enterprises, LLC, and Preston Lord Enterprises of New York, LLC and the companies’ owner marketed various work-at-home programs to consumers, misrepresenting the terms of the programs and requiring up-front fees. In particular, consumers would purportedly receive an unsolicited flyer, stating, “Get paid for mailing our special letters from home!”; “Potential earnings of up to $5000 or more weekly!”; “Free postage, free circulars, free envelopes.”; “Pay checks mailed every Tuesday”; and “Don’t Get Left out! Give us a try & receive a check in as little as ten days!”

After consumers paid an up-front enrollment fee, the FTC claims the consumers would receive instructional materials that stated different terms than those described in the initial flyers. The FTC additionally claims that consumers would not receive a refund and that the earnings claims in the flyers were false. The defendants took millions of dollars from tens of thousands of consumers through the supposed work-at-home schemes, the complaint alleges.

The stipulated preliminary injunction prohibits the defendants from advertising, marketing, promoting, or selling any work-at-home opportunity, from assisting others in doing the same, and from releasing customer information or customer lists. The order also freezes the defendants’ assets and requires that the defendants disable and preserve their websites.

Companies: Capital Enterprises, Inc.; Carson Lord Enterprises, LLC; Java Enterprises, LLC; Mason Grace Enterprises, LLC; Preston Lord Enterprises of New York, LLC

News: Advertising ConsumerProtection FederalTradeCommissionNews