call them scamEntrepreneur – A marketer who uses hyped promises to sell business opportunities to people who aspire to be their own bosses. As part of a federal and state blitz against counterfeit bizopps, the Federal Trade Commission (FTC) announced the development of seven enforcement actions and five additional cases that the agency says used illegal tactics to steal from 2 million Americans trying to make ends meet. Earned more than $500 million in a challenging economy.
The Financial Fraud Enforcement Task Force Consumer Protection Task Force’s crackdown also includes 38 criminal actions by the Department of Justice, 15 cease and desist orders by the U.S. Postal Inspection Service, and an additional 20 by state attorneys general in Arizona, California and Colorado. Action, Indiana and Ohio.
The FTC’s actions illustrate a number of questionable business opportunities: mystery shopping services, credit card processing operations, websites purporting to be associated with high-end brands, promoters promising Postal Service jobs, business activities related to mortgage insurance premium refunds , rewards and credit card application processing, and an operation that claims to match companies with excess inventory with businesses looking to buy. But according to the FTC, they all have one thing in common: They all use deceptive tactics to peddle their bizopps.
The new cases coincide with related FTC actions, including a $478 million judgment against John Beck Amazing Profits in August 2012, as well as lawsuits against Infusion Media Inc., AED Inc. and Abili-Staff Ltd. Nearly $6 million was returned to buyers.
The tactics targeted in today’s case are not new — the FTC has a history of challenging counterfeit bizopp — but this time, the agency has a new tool to use against entrepreneurs: the revised Business Opportunity Rule, which requires broad bizopp sellers disclose key information upfront in a streamlined one-page document.
A message to those who aspire to be their own boss: before investing a dime, consult the Federal Trade Commission’s free resources to help you evaluate your existing situation and avoid Bizoop Barracuda.
What do bizopp sellers need to know? First, federal and state partners take bizopp deception seriously. Illegal activity can result in severe restraining orders, multi-million dollar judgments, and jail time. But for sellers eager to avoid law enforcement conflicts, we have information to help them comply with the law more easily. Watch this video to learn more about your obligations under the revised Business Opportunities Rules.
