Tag: Consumer Protection

The Federal Trade Commission has taken action against coffee shop franchise Qargo Coffee and its founders for failing to disclose critical information required by the Franchise Rule, including one founder’s ties to burger franchise BurgerIM, leaving prospective franchisees in the dark when deciding whether to invest in the franchise.

In its complaint, the FTC alleged that Qargo and founders Mark Bastorous, Bernadette Bastorous, and Samir Shenouda violated the FTC’s Franchise Rule—the agency’s second case in recent years alleging violations of the Franchise Rule.

Under proposed order, the company and its founders are required to pay $30,000, provide franchisees the right to rescind contracts, and void noncompete agreements.

In February 2022, the FTC took action in federal court against a Florida-based group of defendants it alleges called hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” using deceptive telemarketing tactics. According to the FTC complaint, American Vehicle Protection Corp. and related defendants bilked consumers out of more than $6 million over the last four years.  Under the terms of proposed court orders, three companies and their owners that were charged by the FTC with running the operation that scammed consumers out of millions of dollars would be permanently banned from participating in the extended automobile warranty market, as well as from any further involvement in outbound telemarketing. An additional court order announced in July 2023 bans an additional corporate defendant and its owner.

The Federal Trade Commission is sending more than $449,000 in refunds to consumers who were harmed by American Vehicle Protection Corp., which engaged in a telemarketing scam that involved calling hundreds of thousands of consumers nationwide to pitch expensive “extended automobile warranties” using deceptive telemarketing tactics.