FTC says consumers struck out by deceptive business “coaching” pitches

Vision Solution Marketing and related defendants pitch services to prospective entrepreneurs and people looking to supplement their income. Among the defendants’ products is business “coaching” that sets people back as much as $13,995. But given the host of alleged misrepresentations cited in a lawsuit filed in federal court in Utah, the FTC says the defendants definitely aren’t playing on consumers’ team.

The defendants’ telemarketing operations rely on leads supplied by other businesses in exchange for cash or a percentage of their sales. According to the FTC, the typical customer targeted by the defendants has already bought a questionable work-at-home program advertised online that also encourages buyers to contact an “expert consultant” or “specialist” to see if they qualify for an “advanced” program. Consumers are thrown another curve when the defendants then approach them about buying a business coaching program and later pitch them an additional suite of business services, like marketing plans and tax guidance.

Many consumers were lured in with promises of big money. According to one of the defendants’ sales reps, the “expected range” of revenue for a new business was between $3,000 and $5,000 a month. What’s more, it’s a sure thing: “We don’t have any students we’ve built the business for that have ever failed. . . . [T]here’s literally no way to fail. As long as you have the right help, you’re going to be fine.”

But the FTC says consumers who fork over their savings are left in circumstances that are anything but fine. In many cases, the pricey training the defendants offer consists primarily of basic information available for free online – like how to sell stuff on eBay. According to the lawsuit, most people who buy the defendants’ services earn next to nothing, with many ending up deep in debt.

You’ll want to read the complaint for a behind-the-scenes look at the complex interrelationships that fuel operations like this. The lawsuit specifically charges that the defendants made misleading earnings claims, misrepresented the nature of their products and services, and committed multiple violations of the Telemarketing Sales Rule. In addition, the FTC alleges that the defendants tell prospective buyers they need detailed financial information to determine if the consumer qualifies for the coaching program. But according to the complaint, the defendants use those facts to figure out just how much they can charge the person for the purported coaching services.

A federal judge entered stipulated Temporary Restraining Orders that freeze the defendants’ assets and prohibit them from selling business coaching services. But even at this preliminary stage, the case offers object lessons for prospective entrepreneurs or people interested in supplementing their income with a home-based business.

Before shelling out for purported coaching services, consider close-to-home options that won’t cost you a penny. Approach successful business people in your community – for example, in your extended family, in local business associations, in alumni groups, or at your place of worship. Many people who have achieved success in the business world remember what it was like to be starting out and are willing to share their experience.

In addition, consider free business mentoring and consulting programs offered by state offices, Small Business Development Centers affiliated with colleges in your area, and the federal Small Business Administration. (The SBA’s Local Assistance page lists programs in your community.) The FTC also has resources to help you ask the right questions before committing your cash to business opportunities or services.