Asher Afriat, Abraham Afriat, Oren Afriat and Rachel Edery, doing business as American Labor Services and "ALS," have been banned from the marketing and sale of any career advisory goods or services as part of a settlement with the Federal Trade Commission. The FTC charges stem from the "Operation Stamp Out Job Fraud" sweep conducted in January against deceptive career assistance scams.
"Operation Stamp Out Job Fraud" was a joint effort between the FTC and the U.S. Postal Service aimed at stopping private companies that falsely promise Postal Service jobs at generous wages. These companies, through classified ads and telephone pitches, misled consumers by masquerading as the Postal Service and implying they recruit for jobs in the areas in which the ads appeared.
The FTC's complaint, filed in federal district court, alleged that the defendants, in the marketing of Postal Exam preparation materials, misrepresented that:
- their program was affiliated with or endorsed by the Postal Service;
- permanent positions were available with the Postal Service in the geographic areas where the defendants placed the classified ads and the Postal Service was offering the exams for such positions;
- consumers were required to score 90 or higher on the Postal exam in order to qualify for a permanent position with the Postal Service;
- consumers who purchased the defendants' materials were likely to receive scores of 90 or higher on the Postal Service exam; and
- consumers who purchased the defendants' materials would receive permanent positions with the Postal Service within a short period of time.
The FTC alleged that in most instances, the defendants' representations about the availability of Postal Service jobs and the ability of the defendants' materials to help consumers obtain such jobs were false.
In addition to the ban, the settlement prohibits the defendants from making the misrepresentations alleged in the complaint. The defendants are also prohibited from falsely representing the terms and conditions of any refund policy; any material fact regarding employment with the Postal Service, employment opportunities with any federal, state or local government agency, or any other type of employment listings; and any material fact regarding any good or service sold or offered for sale by the business of telemarketing. Further, the settlement prohibits the defendants from violating the Telemarketing Sales Rule; engaging in the business of telemarketing without complying with all applicable federal and state registration and bond requirements; and assisting others who violate any of these provisions. The settlement also includes a $1,000,000 judgment if the court finds that defendants made any misrepresentations or omissions in their financial statements. Finally, it contains various other record keeping provisions to assist the FTC in monitoring the defendants' compliance.
The Commission vote to file the stipulated final judgment was 4-0. The stipulated final judgment was entered by the Honorable Lourdes Baird in the U.S. District Court, Central District of California, in Los Angeles, California, on October 22, 1998. The FTC's Denver Regional Office handled the investigation.
NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Court settlements have the force of law when signed by the judge.
Copies of the news release, the stipulated final judgment and other documents associated with this case 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. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC Matter No. X980007)
(Civil Action No.:98-0282 LGB (Ex))
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