The Federal Trade Commission has charged National Business Consultants Inc. with making false and misleading claims in the sale of business opportunities for business consulting services. At the FTC's request, a federal court has issued a temporary restraining order forbidding further alleged misrepresentations and alleged violations ofthe FTC's Franchise Rule, and freezing the defendants,assets.
According to the Commission's complaint, National Business Consultants (NBC) sold opportunities to individuals to become business consultants or sales associates. The complaint charges that the defendants misrepresented that:
- They provide consulting assignments and that consultants need not market their own services. In fact, the defendants provided few, if any, consulting assignments.
- They provide exclusive or protected territories, when, in fact, they appointed more than one consultant to the same territory.
- Consultants and sales associates are likely to earn from $35,000 to more than $100,000 per year. In fact, few, if any, consultants and sales associates earned substantial sums of money.
- They refund performance deposits to consultants who earn a specified amount of money within a specific time, and that 97 percent of the consultants have qualified for these refunds. In fact, less than one percent of the consultants generated enough income to qualify for the deposit refunds.
- They provide prospective purchasers with references that are successful NBC consultants. In fact, many, if not all, of the references provided were paid by NBC to provide false andexaggerated reports of their success as NBC consultants.
In addition, NBC failed to disclose to prospective purchasers in Washington State that a court order prohibits NBC franchisees from operating in that state, and also failed to disclose that NBC is not registered or licensed to operate in numerous states.
The complaint also charged that NBC violated the FTC's Franchise Rule, which requires a franchiser to provide each prospective purchaser with specified information on the nature of the business and the terms ofthe proposed business relationship. NBC did not make any of the required disclosures.
The FTC asked the U.S. District Court for the Eastern District of Louisiana, in New Orleans, to issue a permanent injunction forbidding such alleged misrepresentations and any violations of the franchise rule. The Commission also asked the court to order the defendants to pay refunds to consumers who purchased consulting business and marketing opportunities.
NBC is based Metairie, La. The complaint also names Robert Namer, who also uses the names Robert Behar and Mark Simon, who is the company's president, chief executive officer, director and sole shareholder.
The FTC's Denver Regional Office handled the investigation.
NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a fmding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies ofthe complaint are available from the FTC's Public Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W. Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.
Office of Public Affairs,
Claude C. Wild III,
Denver Regional Office,