Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Marketer of work-at-home scheme settles FTC charges, (Aug 6, 2014)

By Linda O’Brien, J.D., LL.M.

A business opportunity operator has agreed to settle FTC charges that he falsely claimed that the business opportunity would enable consumers to earn a significant income by affiliate marketing with websites of well-known companies such as Prada, Sony, Louis Vuitton, and Verizon, the agency announced today. Under the settlement, Benjamin Moskel, a former officer of The Online Entrepreneur, will be banned from selling business and work-at-home opportunities (FTC v. The Online Entrepreneur, Inc., File No. 122-3186).

In its complaint, the FTC alleged that the scheme, called the “Six Figure Program,” was sold as a purported no-risk opportunity for consumers to make money via their own website, by falsely claiming that, for $27, they could affiliate with well-known companies’ websites and earn commissions. After paying, consumers learned it would cost an extra $100 or more just to set up their websites. The complaint was filed in the U.S. District Court for the Middle District of Florida in November 2012.

The FTC action was part of a federal-state crackdown on scams that falsely promise jobs and business opportunities to consumers who are unemployed or underemployed.

The settlement order permanently prohibits Moskel from having ownership in any non-publicly traded company that sells business or work-at-home opportunities; misrepresenting that consumers are likely to earn money and misrepresenting any material fact about a product or service; failing to disclose the terms of any offer before consumers provide billing information; and making a business opportunity, product, or service claim unless it is true and he can substantiate it. The order also bars Moskel from selling or otherwise benefitting from consumers’ personal information and requires him to properly dispose of customer information.

The order imposes a judgment of more than $2.9 million, which will be suspended when Moskel has paid the income he earned from the scheme ($259,394), and surrendered certain bank accounts and personal property. The full judgment will become due immediately if he is found to have misrepresented his financial condition.

In March 2014, the FTC announced a settlement with other defendants in the scheme.

The Commission vote authorizing the staff to file the proposed final order was 5-0.

Companies: The Online Entrepreneur, Inc.; Ben and Daves Consulting Associates, Inc.

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