Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Telemarketers settle claims they deceptively marketed a wealth-building program, (Jul 31, 2013)
By Jody Coultas, J.D.
The Federal Trade Commission and Colorado Attorney General have settled charges filed against telemarketers Russell and Catherine Dalbey who allegedly violated the Federal Trade Commission Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act by defrauding consumers.
The Dalbeys and the three companies they controlled advertised a wealth-building program called “Winning in the Cash Flow Business.” About one million consumers spent $40 to $160 on the initial program and were encouraged to spend hundreds or thousands of dollars more on additional products or services such as multi-day seminars, coaching sessions, and promissory note holder lead lists. The infomercials made deceptive claims that consumers would experience quick and easy success underscored by allegedly atypical, and sometimes false, testimonials from consumers who claimed to have made a great deal of money. Very few actually made the money the Dalbeys promised.
The order bans the Dalbeys from telemarketing, marketing or selling business opportunities, and from producing or distributing infomercials. The order also prohibits the Dalbeys from making deceptive claims about the efficacy, benefits, price, or availability of any product, program, or service, and bars them from using deceptive endorsements or failing to disclose restrictions regarding any product, program, or service.
The Dalbeys must disclose their assets in sworn financial statements, repatriate all foreign assets, and cooperate fully as the FTC and the Colorado Attorney General’s office determine how much of an agreed-upon $330 million judgment they can pay.
Under a separate stipulated order against the Dalbeys’ three companies, the companies are jointly and severally liable along with the Dalbeys for the $330 million judgment.
News: ConsumerProtection