FTC Charges Defendants Misrepresented Available Jobs, Potential Income
An operation that told consumers they could be hired as mystery shoppers and earn a substantial income, and the telemarketing firm working for them, are facing Federal Trade Commission charges that their claims about job availability and income potential were deceptive. The FTC also charged the mystery shopping operation with contempt for violating a previous FTC order, and is seeking redress for consumers, who lost millions of dollars.
The FTC alleged that in exchange for the $99.95 fee for one year of service, consumers thought they would be trained and certified as mystery shoppers, and would gain access to job postings available through the company, with enough paid assignments available to ensure a steady part-time or full-time income. Instead, consumers received a worthless certification and access to re-postings of other mystery shopping assignments posted by other companies, who were unrelated to the defendants. Consumers still had to apply for these jobs, most of them low-paying, and had no advantage over anyone else who found the postings elsewhere for free. According to the FTC, the defendants misrepresented that:
- the operation itself was hiring mystery shoppers, or hiring mystery shoppers on behalf of others;
- there were a specific number of mystery shopping jobs available in the consumers’ area;
- a large percentage of mystery shopping jobs go unfilled due to a lack of mystery shoppers; and
- consumers who paid the defendants’ fee were likely to earn a substantial income.
The operation advertised in newspapers, radio, and cable television, inviting consumers to call a toll-free number for more information. The telemarketers assured consumers that there were a specific number of mystery shopping jobs available in their area, often a number in the
hundreds or even thousands, and that consumers could make as much money as they wanted by deciding how many assignments to accept. The telemarketers promised consumers that they would make from $200 to $500 a week, and would earn their money back within one to two weeks. They also told consumers that there was a shortage of mystery shoppers in their local area, allowing them to pick and choose from the large percentage of shopping assignment that go unfulfilled.
In fact, there was no shortage of mystery shoppers. There were far fewer jobs available than what consumers were told, most were low paying, and very few consumers who signed up even made enough money to cover the fee.
While the agency has reason to believe that the operation recently stopped making sales, the FTC is asking a District Court to enter an order barring the defendants from making the deceptive claims, in case they start up sales again.
The FTC complaint names the companies and individuals responsible for the mystery shopping operation – Mystery Shop Link, LLC, Tangent Group, LLC, Robin Larry Murphy, Kenneth Johnson, and Andrew Holman – and those responsible for the telemarketing firm that handled the majority of the inbound telemarketing calls from consumers responding to the ads – Harp Marketing Services Inc., Aiden Reddin, and Marc Gurney. In addition, the FTC is charging the defendants behind the mystery shopping operation with contempt. Robin Larry Murphy is already under FTC order from FTC v. Stratified Advertising and Marketing, Inc. In that case, the FTC charged the defendants falsely pitched the availability of government jobs in consumers’ chosen fields and geographic location and misrepresented to consumers the ease of obtaining a refund if they failed to obtain a job. The defendants, including Murphy, settled FTC charges and entered into Consent Judgments. The FTC is alleging Murphy violated the Consent Judgment by making material misrepresentations of fact in connection with telemarketing. The FTC also is alleging that because the other defendants in the mystery shopping operation were aware of the order entered against Murphy, they too are subject to contempt for assisting him and working with him.
The Commission votes authorizing staff to file the complaint and a civil contempt action were 5-0. The complaint and civil contempt action were filed in the U.S. District Court for the Central District of California.
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 documents 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 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. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.
Office of Public Affairs
Guy Ward or David O'Toole
FTC’s Midwest Region