Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC obtains TRO against perpetrators of deceptive work-from-home scheme, (Feb 24, 2014)

At the request of the FTC, a federal district court in Salt Lake City has entered a temporary restraining order freezing the assets of a work-from-home business coaching scheme, pending the outcome of a preliminary injunction hearing set for March 20, 2014. The FTC has alleged that the defendants violated the FTC Act by misrepresenting likely earnings and the nature of their services, and also violated the FTC’s Telemarketing Sales Rule by misrepresenting material aspects of their investment opportunities.

According to the FTC, the defendants, who did business under a variety of names, including Essent Media, Net Training, YES International, and Apply Knowledge, ran a deceptive scheme that duped consumers into thinking they could earn thousands of dollars working from home. Consumers were induced by numerous false “rags to riches” stories to incur large credit card charges to pay for useless work-at-home kits and business coaching services, the FTC stated.

The defendants’ scheme had three inter-connected phases, the FTC alleged. First, consumers were induced by deceptive emails and websites to purchase relatively inexpensive work-at-home kits, typically priced at $37 to $99, presented as “a certified, proven and guaranteed home job to make $379 per day from home”.

Second, defendants promised consumers that they would earn thousands of dollars a month using defendants’ coaching program, costing $3,000 to $10,000, to assist them in establishing their own online businesses. Consumers were encouraged to pay for their program costs by credit card, promising that the skills learned from the program would enable them to repay this debt within a few months.

Third, while purportedly providing the consumers with their coaching services, the consumers were “up-sold” to additional costly add-on services such as business formation, website design, website development, accounting and tax filing services, and drop-shipping services.

According to the FTC, most people who bought the defendants’ services did not get a functional online business, earned little or no money, and ended up heavily in debt.

Companies: Apply Knowledge LLC, d/b/a Apply Knowledge Institute and Coaching Department; Dahm International LLC; Dominion of Virgo Investments Inc.; eCommerce Support LLC; Essent Media Inc.; eVertex Solutions LLC; EVI LLC, d/b/a Members Learning Center; Nemrow Consulting LLC; Novus North LLC, d/b/a Mymentoring, Yes International LLC, Your Ecommerce Support International LLC; Purple Buffalo LLC, d/b/a Netmarketing; Supplier Source LLC; 365DailyFit LLC, d/b/a Net Training; Vensure International LLC; VI Education LLC.

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