FTC Alleges Companies Made Deceptive Claims About Locations and Earnings
The Federal Trade Commission is charging a “location services” operator with falsely promising to find locations for their customers’ vending machines and display racks and making false earnings claims.
The operators, working under the names Prime Time Marketing, Prestige Marketing, Metropolitan Placement Services, and Best Locations, promised customers they would secure “profitable locations” in “high volume” or “high traffic” areas. One pitch promised locations in “sports bars, night clubs, grocery stores . . . convenience stores . . . gift stores in large hotels . . . restaurants . . . golf courses and country clubs . . .” The companies charged consumers $150-$6000, depending on the number and types of locations they were hired to find. In fact, the companies often did little or nothing for their customers. Many times they failed to find any locations for vending machines and display racks, or did not find as many as they had been hired to find.
The FTC alleged the companies also falsely claimed that their customers were likely to achieve significant sales and earn substantial income by using locations the company could secure. At least one company promised customers a return on their investment in one year or less. Customers rarely, if ever, made the kind of sales promised in the pitches or ever achieved a full return of their investment.
The defendants, Cornerstone Marketing LLC, Sidney Putnam, Carol Putnam, Christopher Putnam, and Melanie Putnam, are based in South Carolina. The FTC charged that their business practices violated federal law and is seeking an asset freeze to provide for consumer redress and a preliminary and permanent end to the deceptive practices.
The Commission vote to authorize staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of South Carolina on June 28, 2006.
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 finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.
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