Blog Posts Tagged with Franchises, Business Opportunities, and Investments

The FTC is always working to know more about the types of fraud being committed and who spends money on them.  Periodically, we survey consumers and ask them to share details about their recent marketplace experiences and a bit about themselves.  Our most recent survey found that nearly 11% of U.S. adults — an estimated 25.6 million people — paid for fraudulent products and services in 2011.

Coaching isn’t just about clipboards, lanyards, and saying “Listen up” a lot.  What do winning coaches bring to a team? Leadership, personal attention, and a proven system for success.  The people who spent more than $100 million on “coaching” services sold by Ivy Capital and related companies thought that's what they were buying.  But according to an FTC lawsuit filed against dozens of defendants — and a settlement with all but five of them — that’s not what Ivy Capital delivered.

Call them contrepreneurs — marketers who use hyped-up promises to sell business opportunities to people eager to be their own boss.  As part of a federal-state blitz on bogus bizopps, the FTC announced seven law enforcement actions and developments in five other cases against outfits the agency says used illegal tactics to take more than half a billion dollars from two million Americans trying to make ends meet in a challenging economy.

It’s not an easy time to be a timeshare owner.  And the last thing they need is a company making false promises that corporate buyers and renters are clamoring for their timeshares — if owners will just pony up a “registration fee” between $500 and $2,000.  According to a lawsuit filed by the FTC and Florida AG, that’s what was going on with an Orlando-based outfit called Information Management Forum.

If you or your clients work in the multi-level marketing (MLM) arena, a decision by a federal judge in the FTC's lawsuit against BurnLounge, Inc., merits your attention. The defendants — the company, the CEO, and top salesmen — used claims of hefty profits to sell opportunities to run online digital music stores.  According to the FTC, the outfit masqueraded as a legitimate MLM program, but really was an illegal pyramid scheme.

In celebration of Halloween — and with apologies to Edgar Allen Poe — here’s our take on what companies can do to make sure spooky business practices don’t come back to haunt them.




Once upon a midnight lawful
Pondering practices, good and awful,
Reading through the U.S. Code
For dos and don’ts I parse and claw.

I came upon the Trade Commission’s
Section 5 with all revisions.

Savvy executives like to stay in the loop on FTC activities that could affect their industry.   They make it a habit to scan the headlines or check for relevant workshops or reports.  But there’s a third category of information a bit less understood: closing letters from BCP staff.

In the spirit of transparency, the agency posts them online.  Here in the BCP Business Center, recent letters appear in the Compliance Documents section of each topic area.

Perhaps you see cops on the beat when they pass by your office. Maybe you serve on a committee with the Chief of Police or have a relative in the Sheriff’s Department. However you cross paths with local law enforcement, do them — and yourself — a favor by telling them about Consumer Sentinel.

“If a tree falls in a forest and no one’s around to hear it, does it make a sound?”  Law enforcers often ask themselves a similar question:  “If a lawsuit reaches final judgment without concrete protections in place for the future, does it have any impact?”  That explains the FTC’s keen interest in remedies with the teeth necessary to do the job.  Simply put, when it comes to consumer protection, it’s all about the order.