The Federal Trade Commission (“FTC”) recently charged two Utah individuals and their telemarketing operation with violating the FTC Act and the FTC’s Telemarketing Sales Rule by deceptively claiming that their business coaching services could help consumers start home-based businesses that could earn thousands of dollars a month. According to the FTC, the defendants targeted consumers who purchased bogus work-at-home programs online for less than $100, encouraging these consumers to contact a “specialist” or “expert consultant” to see if they qualify for an “advanced” coaching program. Once these consumers called to speak with the specialist/expert consultant, they were routed to the defendants’ telemarketers who sold consumers phony business coaching programs and business development services for up to $13,995, largely based on information available to consumers for free on the internet, leaving consumers heavily in debt with no functioning business. The U.S. District Court for the District of Utah entered a stipulated temporary restraining order freezing the defendants’ assets and prohibiting them from selling business coaching services. The FTC seeks to permanently end the defendants’ alleged illegal practices and obtain money for injured consumers.
Takeaway: Part of the FTC’s 2018 agenda is to bring cases which show actual harm to consumers or businesses. This case, along with recent cases brought by the FTC for similar conduct, is evidence of the FTC’s continued enforcement of deceptive work-from-home schemes that in fact harm consumers.