Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Online business opportunities marketers settle FTC charges of work-at-home scheme, (Mar 20, 2014)

By Linda O’Brien, J.D., LL.M.

The operators of a business opportunity scheme have agreed to settle FTC charges that they defrauded consumers through the sale of a work-at-home program, the FTC announced today. The operators purportedly provided consumers with their own websites that would enable them to earn a significant income by affiliate marketing with websites of well-known companies such as Prada, Sony, Louis Vuitton, and Verizon (FTC v. The Online Entrepreneur, Inc., File No. 122-3186).

The settlement is part of a federal-state crackdown on scams that falsely promise jobs and business opportunities to consumers who are unemployed or underemployed. Under the settlement, the defendants behind the operation will be banned from selling business and work-at-home opportunities.

The FTC filed its complaint in November 2012, against The Online Entrepreneur, Ben and Dave’s Consulting Associates, and their owners, David Clabeaux and Benjamin Moskel. According to the FTC complaint, the defendants sold the “Six Figure Program” to consumers as a purportedly no-risk, money-back guaranteed opportunity to make money using their own website, falsely claiming that, for a $27 fee, they would enable consumers to affiliate with well-known companies’ websites and earn commissions. After purchasing the program, consumers learned that they had to pay $100 or more in additional costs just to set up their websites. The court subsequently halted the allegedly deceptive practices, froze the defendants’ assets, and put the companies into receivership pending a court hearing.

The settlement order permanently prohibits The Online Entrepreneur Inc., Ben and Dave’s Consulting Associates, Inc., and David Clabeaux from selling business and work-at-home opportunities, misrepresenting that consumers are likely to earn money and misrepresenting any material fact about a product or service. They also are barred from failing to clearly disclose the terms of any offer before consumers provide billing information, and making a representation unless it is true and the defendants have competent and reliable evidence to substantiate the claim. In addition, the order prohibits the defendants from selling or otherwise benefitting from consumers’ personal information, and failing to properly dispose of customer information.

The order imposes a judgment of more than $2.9 million, which will be suspended when Clabeaux has surrendered real estate, personal property, and bank and investment accounts. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. Litigation continues against the remaining defendant, Benjamin Moskel.

Companies: The Online Entrepreneur, Inc.; Ben and Dave’s Consulting Associates, Inc.

News: ConsumerProtection FederalTradeCommissionNews