FTC Alleged False Claims Regarding Earnings, Success Rates, Travel Benefits
David Eugene Mueller has agreed to settle Federal Trade Commission charges that he falsely promised purchasers of his training program that they would be "licensed" or "certified" to operate home-based travel agencies, achieve earnings of $25,000 in their first year of operation, and receive, among other things, benefits such as free computers and free or deeply-discounted travel. In February 1995, the FTC filed a complaint charging that Mueller and his companies engaged in a host of deceptive practices, including making unsubstantiated success and earnings claims. The FTC also charged the defendants with violating the FTC’s Franchise Rule by failing to provide potential franchisees with required pre-purchase information. The federal district court for the Southern District of Florida issued an injunction against the defendants shortly thereafter. Under the proposed settlement, Mueller would be permanently banned from participating or assisting in the promotion or sale of travel industry business opportunities and violating the Franchise Rule in the future.
Mueller was the sole owner and operator of the now-defunct Independent Travel Agencies of America Association, Inc. (ITAA) and the Travel Industry Council, Inc. (TIC), of Fort Lauderdale, Florida. According to the complaint allegations, the defendants sold their program through classified ads that ran in newspapers nationwide beginning in 1988. The defendants offered for sale a training and "certification" or "licensing" program, together with a package of services, all of which purportedly would enable purchasers to become fully-functional home-based travel agents. The defendants allegedly offered substantial assistance to purchasers, including a member help line and a 24-hour traveler assistance line, and advice on topics such as completing the program, establishing an agency, booking travel and otherwise servicing clients. Contrary to the defendants' representations, the FTC alleged that numerous consumers who purchased programs from ITAA and TIC were unable to open and operate independent travel agencies.
The proposed consent decree settling the charges with defendant David Mueller would prohibit him from making the specific claims alleged in the FTC’s complaint in connection with the sale of any franchise or business opportunity. Mueller would also be permanently banned from engaging or participating in the marketing, promotion, sale, or offering for sale of any franchise or business opportunity involving the travel industry. Further, Mueller would be prohibited from violating the FTC’s Franchise Rule and from selling or otherwise disclosing any information about purchasers of his program. The proposed settlement also contains recordkeeping and reporting requirements designed to assist the FTC in monitoring compliance.
The corporate defendants, ITAA and TIC, are presently in Chapter 7 dissolution proceedings in the bankruptcy court in the Southern District of Florida. Because both companies have been out of business since the FTC obtained an injunction against Mr. Mueller in 1995, the FTC has asked the court to dismiss the complaint against the companies.
The FTC filed the proposed settlement in U.S. District Court for the Southern District of Florida, in Miami, today. The proposed settlement is subject to approval by the court. The Commission vote to authorize filing of the settlement with Mueller and dismissing the complaint against TIC and ITAA was 4-0.
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.
Copies of the proposed settlement, as well as previous documents regarding this case are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202- 326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
(Civil Action No.: 95-6137)
(FTC File No. X950028)
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