The Federal Trade Commission announced that the U.S. District Court for the Eastern District of Louisiana has permanently enjoined National Business Consultants, Inc. (NBC), and Robert Namer (who has also used the name Robert Behar) from making false and misleading claims or omitting material facts in the sale of business opportunities for business consulting services, and from violating the FTC's Franchise Rule.
In April 1989, the FTC filed a complaint charging that Namer and NBC, his company based in Metairie, Louisiana, sold opportunities to individuals to become business consultants or sales consultants. The FTC's complaint charged that Namer and NBC falsely represented that: they provide consulting assignments so consultants need not market their own services; they provide exclusive or protected territories; consultants and sales consultants were likely to earn from $35,000 to more than $100,000 per year; they refund performance deposits to consultants who earn a specified amount of money within a specific time, and 97 percent of the consultants have qualified for these refunds; and they provide prospective purchasers with references who are successful NBC consultants.
In the written ruling, entered March 19, 1990, the Court found that Namer and NBC violated the Federal Trade Commission Act by making material misrepresentations, essentially as alleged in the complaint, among others. The Court also found that Namer and NBC misrepresented or omitted material information about pending litigation and Better Business Bureau complaints involving NBC, and provided "bogus references" to prospective associate consultants. The Court further found, as charged in the complaint, that Namer and NBC violated the FTC's Franchise Rule, which requires a franchisor to provide each prospective purchaser with specified information on the nature of the business and the terms of the proposed business relationship. Namer and NBC did not make any of the required disclosures. They specifically failed to disclose to prospective purchasers that they were prohibited from selling nregistered franchises in Washington and California, and that NBC is not registered or licensed to operate in several states. The Court found that "NBC and Namer had a positive duty to know in which states it could do business and, if it was prohibited from doing business in a particular state to so advise an applicant before accepting his money."
The assets of NBC and Namer remain frozen by court order. Still pending before the Court is the FTC's request that the Court order Namer and NBC to pay refunds to consumers who submitted $7500 or $750 performance deposits to NBC to become consultants with the company.
Copies of the written findings and conclusions ordering the injunction 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.
Brenda A. Mack,
Office of Public Affairs,
Claude C. Wild III,
Denver Regional Office,