Closing the door on a money-making scheme that promised big bucks for “closers”

It’s troubling enough for a company to claim that consumers who take their course can make major money by learning “high demand” sales skills as a telemarketing “closer.” (Insert your favorite David Mamet quote from Glengarry Glen Ross here.) But to keep on making those representations after receiving Notices of Penalty Offenses Concerning Money-Making Opportunities and Endorsements from the FTC? That’s brazen. Proposed settlements with operators of a scheme called “The Sales Mentor” serves as a reminder that the law looks askance at outfits that bilk consumers out of their savings through false or unsubstantiated earnings claims.

The Tennessee-based defendants conveyed their big-bucks pitches online, in social media (mainly YouTube and Facebook), and through telemarketing. Using a variety of names – in addition to The Sales Mentor, consumers may know them as the Sales Closer Academy, Inbound Closer, Inbound Closer Accelerator, and Sales Pro Academy – the defendants claimed to have “helped over 25,000 people find secure, dependable, consistent and life-changing incomes,” often between $10,000 and $20,000 per month. From a low of $97 for access to a video library and sales script to as much as thousands of dollars for “private” coaching, consumers shelled out cash based on the defendants’ wallet-grabbing claims:

• “These commissions can get so massive . . . it’s virtually IMPOSSIBLE NOT to enjoy a job-replacing six-figure income, even part-time.”
• “This High-Demand Skill Puts You Dead-Center in A Thriving, $129 Billion-Dollar Industry That Will Stuff Your Pockets With Daily Commission Checks of $980 or More.”
• “And if you follow the steps that I’m gonna show you in this video, you’ll have an army of entrepreneurs with multi-million dollar businesses practically beating down your door . . . DESPERATE TO HAND YOU A GIANT COMMISSION CHECK OF $980 OR MORE SIMPLY BECAUSE YOU HAVE THE ONE EASY TO LEARN SKILL THAT THEIR BUSINESS CAN’T SURVIVE WITHOUT.”

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In one marketing video, co-CEO Taylor A. Welch represented that “10-20 thousand dollars a month in earning potential is what we’re seeing on average.” In another video, co-CEO Christopher A. Evans claimed, “As a high-ticket closer, you’d earn around 8-12 % of every deal closed,” yielding “an average of “$700-$1000 for every single deal that you finalize,” which “often happens in about 45-60 minutes or less.” In addition, Sales Director Payton Welch claimed to tout his own experience with the program:

“Within a week, I had people lining up to pay me. Within two weeks, I had already made $15,460 in commissions. And within 21 days, I looked in my bank account and I saw something crazy . . . I had earned more money in those 21 days than I had earned in SIX MONTHS at my old job. Not to mention I did it part-time, on my own schedule, using nothing but a cell connection. So I could earn a stable six-figure income on my own terms from anywhere I wanted.”

One of the defendants’ telemarketers told a consumer that after taking the training, people could expect to make “about $1,000 bucks a day, 5 grand a week, 20K a month.” Another telemarketer offered that consumer this dizzying calculation:

“If we’re working 40 hours a week, okay, that means we could probably take 40 calls. Average show-up rate is 80 percent. So out of that, you get 32 calls. Average close rate, we’ll say it’s like 30 percent, but since you’re newer, we’ll say 25. So 25 percent of those 32 calls would be an average close for someone newer to the game, right? So that comes out to around 7. My math might be a little low, but 7. Okay? So 7 times 1,000 is weekly income for someone who has a full-time calendar of calls inbound closing. . . . So that comes out to about 28 a month; annual, around 300.”

“300” as in earnings of $300,000 a year. What the telemarketers didn’t know was that the “consumer” to whom they were making those pitches was an undercover FTC investigator.

According to the FTC, those pie-in-the-sky promises were false or unsubstantiated. In fact, the defendants had no reasonable basis to support their money-making claims because they never systematically tracked the results of the more than 55,000 people who paid for their Sales Mentor products. What’s more, the FTC contacted The Sales Mentor on October 27, 2021, with the two Notices of Penalty Offenses. But as the complaint alleges, the defendants “continued to make deceptive or unsubstantiated earnings claims in marketing their Sales Mentor program.”

The complaint, which names Traffic and Funnels, LLC, various other corporations, Taylor Welch, Christopher Evans, Payton Welch, and Ashton Shanks, alleges violations of the FTC Act and the Telemarketing Sales Rule. Citing the Notice of Penalty Offenses Concerning Money-Making Opportunities, a third complaint count charges the corporate defendants with “violations of prior commission determinations known to defendants.”

In addition to prohibiting a broad swath of money-making claims and telemarketing conduct, the proposed settlements contain a monetary judgment of $16,363,073 against all of the defendants other than Ashton Shanks. Although the total will be partially suspended based on the defendants’ inability to pay the full amount, Taylor Welch will turn over $600,000 and Christopher Evans will turn over $400,000, which the FTC will use to provide money back for consumers.

The most important takeaway for any company or individual who has received a Notice of Penalty Offenses is that the FTC has already used its statutory authority in six recent cases and will continue to seek appropriate relief for consumers when defendants are aware of conduct that previous FTC cases has established as illegal and yet choose to flout the law.

If you know someone thinking about sinking their savings into a money-making “program” or “system,” share advice from the FTC about how to protect themselves from big-bucks sales pitches.