Business Coaching Scheme Operators in $1.2 Million FTC Settlement

On May 12, 2020, the FTC filed a settled complaint in federal court against five defendants, alleging that they ran a deceptive campaign to sell internet marketing products and services to consumers, claiming that those products and services would ensure that the consumers could build a successful online business, in violation of the FTC Act, the Telemarketing Sales Rule, and the CFRA. 

The defendants’ misrepresentations allegedly concerned affiliations, false earnings, and product claims, and the defendants allegedly contractually limited the consumer’s ability to review or complain about the products and services.  The defendants claimed to need a consumer’s financial information in order to provide the services, but would allegedly use that information to determine how much they could charge the individual consumer.

All five of the defendants have entered into settlements with the FTC, which total more than $1.2 million, and include stipulated injunctive relief prohibiting defendants from “advertising, marketing, promoting, offering for sale, or selling” any Business Coaching Service, and from using telemarketing without communicating the seller’s identity, the purpose of the call, and the nature of the good and services being sold.  The Stipulated Orders for Permanent Injunction and Monetary Relief were entered by the court on May 19, 2020.