FTC Charges Jeff Paul, Others with Deceptive Practices Enough with the get-rich-quick schemes already!

Easy Internet Millions
And a pot of gold at the end of the rainbow
By Susan Hindman

Scammers have snared many in schemes that somehow sounded lucrative but over time turned into financial nightmares for the person who needed the help most. These attracted the attention of the Federal Trade Commission (FTC), which in July announced a crackdown on scammers trying to bilk vulnerable consumers by promising nonexistent jobs or promoting get-rich-quick plans, bogus government grants, and phony debt-reduction services.

“Operation Short Change” is a law enforcement sweep that includes eight new FTC cases, 44 law enforcement actions by the Department of Justice, and actions by at least 13 states and the District of Columbia.

“Thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection, in a press release. “Their scams may promise job placement, access to free government grant money, or the chance to work at home. In fact, the scams have one thing in common—they raise people’s hopes and then drive them deeper into a hole.”

One of those charged may sound familiar. We wrote about it in April: “Jeff Paul’s Shortcuts to Internet Millions.” He’s the one with the infomercials about how easy it is to get started on an Internet marketing path and earn $50K a month. The infomercials, which have aired for the past three years, indicated that people would receive “proven, turnkey Internet businesses” and that the system is so simple that consumers did not need any prior experience with Internet businesses to make it work.

The FTC begged to differ. They found that the Jeff Paul materials did not contain step-by-step instructions for accessing or using the “proven, turnkey Internet business.” Instead, the materials told consumers to create their own informational products from scratch, and then market those products on the Internet. The system’s “instant” Web sites were simplistic, requiring users to learn how to do extensive work to enhance them. Once the sites were activated, consumers had to do all of their own marketing to attract customers. “Few, if any, consumers who purchase and use the Jeff Paul system quickly and easily earn substantial amounts of money,” the FTC determined.

The “Jeff Paul system” is intertwined with two other schemes that the FTC says duped “hundreds of thousands of consumers into paying approximately $300 million”: “John Beck’s Free & Clear Real Estate System” and “John Alexander’s Real Estate Riches in 14 Days.” All three used frequent infomercials to sell their systems for $39.95 and then contacted the purchasers via telemarketing to offer “personal coaching services,” which supposedly would enhance their ability to earn money.

The coaching services for all three were provided by Mentoring of America LLC, which was also charged by the FTC, and cost anywhere from $195 to $14,995. Another company charged, Family Products, LLC, was part of the sales effort of the Jeff Paul system.

Thousands of consumers across the United States purchased the John Beck, John Alexander, or Jeff Paul systems as well as the personal coaching services. Purchasers were also signed up for “continuity programs” (in Paul’s case, under the name Jeff Paul’s Big League) that were free the first month but cost $39.95 a month after that, much to the surprise of the consumer.

The FTC accused all of the companies of operating together “as a common enterprise while engaging in the deceptive acts and practices . . . through an interrelated networks of companies that have common ownership, officers, managers, addresses, and/or business functions.”

FTC Charges Jeff Paul, Others with Deceptive The FTC also brought cases against the following individual and companies:

• Wagner Ramos Borges (Job Safety USA, Sparkle Industrial, Sparkle Maintenance, Star Maintenance, Aim Janitorial & Flooring, and United Maintenance) targeted people seeking maintenance and cleaning work through print and online classified ads and then tricked them into paying $98 for a worthless credential called a “certificate registration number” in order to get the job—which was then not provided.
• Grants for You Now operated Web sites such as GrantsForYouNow.com, GrantOneDay.org, and EasyGrantAccess.com that allegedly deceived consumers by promising them free government grant money to use for personal expenses or to pay off debt. Consumers’ credit or debit account information was taken to process a $1.99 fee, but then, unbeknownst to them, they were enrolled in a membership program that cost up to $94.89 a month.
• Cash Grant Institute allegedly waged an automated robocall campaign promoting bogus claims that consumers were qualified for grant money from the government, private foundations, and wealthy individuals that they could use to fix their financial problems. They made similar misleading claims about “free grant money” on their Web sites, CashGrantSearch.com and RequestAGrant.com.
• Mutual Consolidated Savings used telemarketing robocalls and the Internet to push a phony “Rapid Debt Reduction” program. For $690 to $899, consumers were told they could reduce credit card interest rates, save thousands of dollars, and pay off their debt three to five times faster than they could under their current payment schedule. The defendants also failed to make good on promises that they would refund the fees paid if the consumers’ credit card interest rates were not reduced.
• Google Money Tree (Infusion Media, Inc.; West Coast Internet Media, Inc.; 2 Two Warnings, LLC; Two Par Investments, LLC; Platinum Teleservices, Inc.) allegedly misrepresented that they were affiliated with Google and lured consumers into divulging their financial account information by advertising a low-cost kit that would supposedly enable them to earn $100,000 in six months. They failed to mention that the fee for the kit would trigger monthly charges of $72.21.
• Penbrook Productions (Make You Famous Consulting; Process from Home) promoted a work-at-home scheme online that charged $197 for the opportunity to become a certified rebate processor who could earn as much as $225 per hour. But after paying the fee, consumers were instead instructed on how to become an affiliate marketer. And they couldn’t get a refund despite the “ironclad” money-back guarantee.
• Classic Closeouts charged consumers’ accounts continuously for months or years after they bought low-cost clothing or household goods from classiccloseouts.com. Consumers’ efforts to contact the company to contest the charges, which ranged from $59.99 to $79.99, were unsuccessful. If the disputed charges were reversed by their financial institutions, the company contested these disputes, falsely claiming that consumers had chosen to join the Classic Closeouts “frequent shopper club.”

You can read the full complaint at the FTC’s site.

The FTC has produced a consumer education video that shows how easy it is to be conned and how to avoid fraud:

Another investigation report found here:

http://www.internetbizhelper.com/internet-business-opportunity-scams-tv-infomercial-pitches/#more-181