Operators of a get-rich-quick scheme have agreed to a permanent ban on the marketing or selling of certain types of software as part of a settlement with the Federal Trade Commission (“FTC”) over allegations that the defendants deceived consumers by falsely claiming consumers could earn large sums of money working online utilizing the defendant’s products. The scheme falsely promised consumers that they could earn hundreds to thousands of dollars a day using the defendants’ “Mobile Money Code” software products, which were in fact generic software applications that help users make mobile-friendly websites. The FTC alleged that the defendants violated the FTC Act, by contacting consumers through deceptive spam e-mails, and the CAN-SPAM Act, by sending commercial email messages that included misleading subject lines; failing to identify themselves as advertisers; including no valid physical address of sender; and offering recipients no opt-out for future messages. The settlement order requires the defendants to pay $7,000,000, which will be suspended upon payment of $698,500 to be used to refund defrauded consumers; and bans the defendants from marketing or selling money-making software.
Takeaway: As we previously blogged, part of the FTC’s 2018 agenda is to bring cases which show actual harm to consumers or businesses. This settlement, along with recent cases brought by the FTC for deceptive work-from-home business coaching schemes, is evidence of the FTC’s continued enforcement of get-rich-quick schemes that in fact harm consumers.