FTC Sues to Prevent Sale of Franchise Promoting "U.S. Consumer Protection Agency" Business Opportunity

While it’s been said that imitation is the sincerest form of flattery, the Federal Trade Commission announced that it has sought a permanent injunction in federal District Court to stop the sale over the Internet of a franchise promoting sales to "... individuals interested in owning and operating a local agency" -- the U.S. Consumer Protection Agency (USCPA).

"Just when you think you’ve seen it all, someone tries to scam consumers by passing themselves off as a champion of consumer protection," said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. "The FTC is committed to protecting consumers from fraud and deception -- especially from those whose conduct destroys the public trust."

In its complaint filed by the Department of Justice on behalf of the FTC, the government alleges that Robert M. Oliver, doing business as U.S. Consumer Protection Agency and Consumer Protection Agency of Bay County, violated Section 5 of the FTC Act by falsely representing that his franchise was a government agency, and by failing to make disclosures required by the Franchise Rule.

According to the complaint, Oliver, based in Panama City, Florida, promotes the USCPA franchise through material posted on an Internet site and promises potential purchasers that in exchange for a minimum investment of $6,000, he will provide training, licensing, certification, and support so the purchaser can set-up the "Consumer Protection Agency" for the city or county chosen by the purchaser.

In addition, the complaint states that Oliver represents that purchasers of a USCPA franchise can earn large sums by selling their membership services to businesses within their franchise area for an initial charge of $149 plus a yearly fee of $250. Oliver’s promotional materials also claim that even a small "agency" should initially earn $6,000 weekly gross income, for a total yearly gross income of $303,240, based on the experience of an actual "agency." The complaint alleges Oliver violated the Franchise Rule by failing to provide prospective franchisees with complete and accurate disclosure documents.

The complaint asks the court to issue a permanent injunction to prohibit Oliver from violating the FTC Act in connection with the offering, promotion, and sale of franchises and in connection with the sale of "consumer protection" services. It also requests that the court permanently enjoin Oliver from violating the Franchise Rule and award civil penalties for each of his alleged violations of the rule.

The Commission vote to file the complaint was 4-0, with Commissioner Mary L. Azcuenaga not participating. The FTC acknowledges the assistance of the Department of Justice’s Office of Consumer Litigation and the U.S. Attorney for the Northern District of Florida in Pensacola. The complaint was filed in U.S. District Court for the Northern District of Florida on June 8, 1998.

NOTE: The Commission authorizes the filing of 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 finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the complaint and consumer education material about franchises and other business opportunities are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

Betsy Broder,
Bureau of Consumer Protection
202-326-2968  

Frank Gorman,
Bureau of Consumer Protection
202-326-3282

(FTC File No. 982-3156)
(Civil Action No. 5:98cv00160)