Jeff Paul, John Beck, & Other Infomercials Charged by FTC July 1

[Bruce NewMedia]

Hey, don't know how I missed this:

Looks like the FTC has mounted a big crackdown and gone after 15 biz-opp infomercials for alleged scams. They include some pretty famous infomercials....

like Jeff Paul’s "Shortcuts to Internet Millions" infomercial, John Beck’s "Free & Clear Real Estate System", John Alexander’s "Real Estate Riches in 14 Days" and , plus other biz ops and real estate deals.

here's the FTC link: Federal Trade Commission v. John Beck Amazing Profits, LLC, a California limited liability company, et al

_____
Bruce

[Jeremy Kelsall]

Yeah, I was reading about this ealier...

From the looks of it, Uncle Sam is looking to kick a little ass.

FTC Cracks Down on Scammers Trying to Take Advantage of the Economic Downturn

[Alice Seba]

Can they also crack down on the spam Jeff Paul's organization sends to my blog?

Back on the topic. This sounds like what other Internet marketers we may know do too:

"The defendants allegedly made false and unsubstantiated claims about potential earnings for users of these systems. They used frequently aired infomercials to sell the systems for $39.95 and then contacted the purchasers via telemarketing to offer “personal coaching services,” which cost several thousand dollars and purportedly would enhance their ability to earn money quickly and easily using the systems. In addition, all purchasers were signed up for continuity programs that cost an additional $39.95 per month, but which were not adequately disclosed to consumers. Some consumers also continued receiving unwanted sales calls after they told the defendants’ telemarketers to stop calling."

[Steven Carl Kelly]

Act properly and be upfront with your customers and don't make false claims and you won't have anything to worry about.

[Lance K]

Those guys are in some BIG RISK, BIG REWARD markets. It will be interesting to see what comes of it.

It's hard to predict. Didn't the FTC go after Enzyte not too long ago? But just the other night, I saw "Smilin' Bob" back on my TV. I haven't followed that case so I don't know what happened. Just that Enzyte is running commercials again.

[Bill Jeffels]

Originally Posted by brucerby

Hey, don't know how I missed this:

Looks like the FTC has mounted a big crackdown and gone after 15 biz-opp infomercials for alleged scams. They include some pretty famous infomercials....

like Jeff Paul’s "Shortcuts to Internet Millions" infomercial, John Beck’s "Free & Clear Real Estate System", John Alexander’s "Real Estate Riches in 14 Days" and , plus other biz ops and real estate deals.

here's the FTC link: Federal Trade Commission v. John Beck Amazing Profits, LLC, a California limited liability company, et al

_____
Bruce

It's about time.

Jeff Paul has been scamming people... sitting at his kitchen table making $4000 a day sitting in his underwear... for years.

Best,

Bill Jeffels

[Bill Jeffels]

Originally Posted by Lance K

Those guys are in some BIG RISK, BIG REWARD markets. It will be interesting to see what comes of it.

It's hard to predict. Didn't the FTC go after Enzyte not too long ago? But just the other night, I saw "Smilin' Bob" back on my TV. I haven't followed that case so I don't know what happened. Just that Enzyte is running commercials again.

Hey Lance,

The owner of Enzyte, Steven Warshak was sentenced to 25 years in prison.

His business Berkely Premium Nurtraceuticals was sold to a private company. Steve was ordered to forfeit over 500 million dollars.

So, for the next 25 years Steve will be in prison getting a different kind of "Natural Male Enhancement".

Take care,

Bill Jeffels

P.S. Steve was convicted of mail fraud, bank fraud and money laundering. Also, he had his 75 year old mother in on the deal, and she got 2 years in prison.

[Floyd Fisher]

Originally Posted by Lance K

Those guys are in some BIG RISK, BIG REWARD markets. It will be interesting to see what comes of it.

It's hard to predict. Didn't the FTC go after Enzyte not too long ago? But just the other night, I saw "Smilin' Bob" back on my TV. I haven't followed that case so I don't know what happened. Just that Enzyte is running commercials again.

Enzyte was never actually shut down, just some of the principals hauled off to jail.

[Randy Bheites]

About time the FTC did something about these scumbags, especially the nasty hidden rebill scammers like Google Tree and the grants. I see Angela Penbrook is finally getting shut down as well.

Smilin' Bob, on the other hand, why, that's just patriotic, helping all those poor guys salute again!

[Rich Struck]

How soon they forget...

Free Chantal: Help us Free Chantal McCorkle, Wrongly Imprisoned for 24 Years

[Mark Riddle]

Its really bad, there is no need to rip people off.

The Sad part to me is that I met John Beck back in the days when few people knew who he was, and at that time was really doing deals.

I attended auctions with him and visited a collectors office where we proceeded to have deal after deal thrown in our lap.

He and about 3 other guys drove around the Dallas TX area in my old cadi taking pictures and talking with people.

He purchased several properties during the tour, and made arrangements to get about 25 lake front lots if he agreed to "Urge" the buyers to place homes on them.

Mark Riddle

[Bruce NewMedia]

I think many of these guys started out as fairly straight businessmen, but their greed got out of control.

I had a business transaction with Jeff Paul, when he was a financial planner and lived just few miles from me, in 1990.
This was long before he was 'famous'. He always impressed me as a decent fellow. I think his early courses on marketing were decent and sold in a reputable way.

However, these recent infomercials make other marketers look shady as well. ...too bad.

Here's Tommy Vu, who I think was able to avoid jail.

YouTube - Tom Vu, the Legendary Asian Pimp

[WareTime]

"Looks like the FTC has mounted a big crackdown and gone after 15 biz-opp infomercials for alleged scams. They include some pretty famous infomercials....'

To quote the great Nelson, "Ha Ha"

[Bill Jeffels]

Originally Posted by brucerby

I think many of these guys started out as fairly straight businessmen, but their greed got out of control.

I had a business transaction with Jeff Paul, when he was a financial planner and lived just few miles from me, in 1990.
This was long before he was 'famous'. He always impressed me as a decent fellow. I think his early courses on marketing were decent and sold in a reputable way.

However, these recent infomercials make other marketers look shady as well. ...too bad.

Here's Tommy Vu, who I think was able to avoid jail.

YouTube - Tom Vu, the Legendary Asian Pimp

It's amazing, guy's like Jeff Paul, Vincent James ( Passafiume ), Tom Vu and Don Lapre, they're intelligent guy's. They really are.

They chose to run their business's a certain way. And as John Carlton has said in his Scuttle Butt cd's... "you can market your business so that you will make money long term... or you can scam people, you will make money short term and probably go to jail.

Vincent James went to jail, all of his assets got seized, he lost 48 million dollars, lost 4 mansions, Ferrari's, hell even his fiances engagement ring.

But guy's like Joe Polish, Russel Brunson and many others think he's the greatest thing since sliced bread. Even Gary Halbert explained when he met Vinny James that it was like direct marketing meeting the Sopranos.

Life is all about choices, some people want to be like Donald Trump and Warren Buffett, and some people want to be like Conrad Black and Bernie Madoff.

Regards,

Bill Jeffels

[Scott Ames]

The major offense in the complaint seems to be a continuity plan without disclosure.

At no point before consumers provide their payment information as
14 part of the automated ordering process do Defendants disclose that John's Club is 15 actually a continuity plan, and that once the 30-day free membership expires, 16 consumers will be charged $39.95 per month unless they contact Defendants to
17 cancel their memberships. At no point prior to providing their payment
18 information do consumers give their consent to be charged for their memberships 19 in John's Club once the 30-day free memberships expire.

They probably could keep going if they didn't get greedy and hide the continuity. I'm sure they would still make plenty of money too.

[Sfrew]

While the FTC is going after big fish right now, they may or not be guilty of anything -- the FTC approach is smash and grab, and then go to court. Usually folks settle with them -- just like the IRS. That may be ok when you are dealing with folks with the resources to pay a "settlement" aka extortion, but plenty of small fry get hit along the way, and it can destroy someone whether they are guilty of anything or not.

The FTC should be protecting the public -- I am good with that. I am just concerned that they fail to distinguish innocent technical issues and malicious competitor complaints from intentional scams on the public.

As a retired attorney, I think the day is long past when folks on this forum can run their internet business without a good compliance attorney. The free-wheeling days of everyone starting business on the net to work at home in their undies is ending rapidly.

Your sites, offers, and products are a business and they need to be run like a business -- and the US government is your business partner regardless of whether you received bailout money, you just don't know it. Innocent or ignorant mistakes will still get you killed.

And NO...I will not recommend a good lawyer.

[marmo]

Glad there going after the scammers , putting poor people on auto re bill without disclosure is kinda immorally bankrupt IMO.

[JoMo]

Originally Posted by Bill Jeffels

Hey Lance,
...
So, for the next 25 years Steve will be in prison getting a different kind of "Natural Male Enhancement".

Take care,
...

LMMFAO!!! I always hated those commercials.

[Jeremy Kelsall]

I didn't really think the continuity was really hidden with a lot of these offers so, it would suck if the continuity was the cause...

If that was it, basically a bunch of people are getting picked up because people ordering products online are too illiterate to actually read the terms and conditions.

[Bill Jeffels]

Originally Posted by Sfrew

While the FTC is going after big fish right now, they may or not be guilty of anything -- the FTC approach is smash and grab, and then go to court. Usually folks settle with them -- just like the IRS. That may be ok when you are dealing with folks with the resources to pay a "settlement" aka extortion, but plenty of small fry get hit along the way, and it can destroy someone whether they are guilty of anything or not.

The FTC should be protecting the public -- I am good with that. I am just concerned that they fail to distinguish innocent technical issues and malicious competitor complaints from intentional scams on the public.

As a retired attorney, I think the day is long past when folks on this forum can run their internet business without a good compliance attorney. The free-wheeling days of everyone starting business on the net to work at home in their undies is ending rapidly.

Your sites, offers, and products are a business and they need to be run like a business -- and the US government is your business partner regardless of whether you received bailout money, you just don't know it. Innocent or ignorant mistakes will still get you killed.

And NO...I will not recommend a good lawyer.

Oh ya, your exactly right.

There has been plenty of legitatment business people... direct mail, internet people that are innocent, but have had their bank accounts frozen and their assets seized just because they are making large amounts of money a month.

As soon as the government observes someone is making a substancial amount of money they immediately put on their "RICO" radar and presume you're either working with Pablo Escobar or John Gotti, ( ya, I know they're dead ).

Then it's up to the innocent business person to pay their lawyer hundreds of thousands, possibly millions of dollars to prove their innocence.

Let's say your in direct mail,you can even phone your bank and tell them that your rolling out a huge mailing and to expect large amounts of money coming into your bank account.

It doesn't matter, phone calls will still be made and innocent people will still get nailed.

Best,

Bill Jeffels

[Richard Tunnah]

One of the first info products I got in 96 I think was a Jeff Paul audio set. Thought it was pretty good. However he seems to have turned to hard selling recently - like making it hard to un-subscribe to the hundreds of lists he places you one when you subscribe. Sounds like his info commercials are 'fun' but not living in the US I've never seen them!

Rich

[Bill Jeffels]

Originally Posted by Jeremy Kelsall

I didn't really think the continuity was really hidden with a lot of these offers so, it would suck if the continuity was the cause...

If that was it, basically a bunch of people are getting picked up because people ordering products online are too illiterate to actually read the terms and conditions.

Vincent James would not stop charging your credit card, even if you did phone and canel your "membership".

Thousands of people actually had to cancel their credit cards altogether just to get the payments to stop.

Regards

Bill Jeffels

[ppcpimp]

^^That in itself is criminal.

But I have been to all of these sites in the past and I found the disclosures. Maybe the people that called in from just watching the commercial did not receive a disclosure.

Originally Posted by Bill Jeffels

Vincent James would not stop charging your credit card, even if you did phone and canel your "membership".

Thousands of people actually had to cancel their credit cards altogether just to get the payments to stop.

Regards

Bill Jeffels

[Paul Schlegel]

Originally Posted by Jeremy Kelsall

I didn't really think the continuity was really hidden with a lot of these offers so, it would suck if the continuity was the cause...

If that was it, basically a bunch of people are getting picked up because people ordering products online are too illiterate to actually read the terms and conditions.

It depends on when you looked at the offers. Many of the products - like Google Money Tree and quite a few others on the list started changing their continuity disclosure placement once they suspected (or knew) that the FTC had a case file open on them.

Also, the FTC sometimes treats the disclosure differently depending on the demographic market. Many of the recent grant offers were targeting a less educated and internet savvy market, so the FTC likely would tend to lean more heavily in the consumers' favor than something like an internet marketer targeting an internet marketing audience.

"Second, we examine the practice from the perspective of a consumer acting reasonably in the circumstances. If the representation or practice affects or is directed primarily to a particular group, the Commission examines reasonableness from the perspective of that group."

- From the FTC policy statement on deception

The FTC also talks about "net effect" to consumers, so I asked Lesley Fair - an attorney in the FTC's division of Consumer and Business Education how the FTC determines "net effect" to consumers and this is how she explained it:

"Hi, Mr. Schlegel. You raise an interesting question about how the FTC determines the “net impression.” Because the FTC deals daily with the question of what’s deceptive, the Supreme Court has said that it has the expertise in most cases to make that determination: “As an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is deceptive within the meaning of the Act. This Court has frequently stated that the Commission's judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a violation in this field rests so heavily on inference and pragmatic judgment.”

Sometimes the process depends on whether it’s an express claim or a subtler implied claim. Here’s how the United States Court of Appeals described the process in Kraft v. FTC: “In determining what claims are conveyed by a challenged advertisement, the Commission relies on two sources of information: its own viewing of the ad and extrinsic evidence. Its practice is to view the ad first and, if it is unable on its own to determine with confidence what claims are conveyed in a challenged ad, to turn to extrinsic evidence. The most convincing extrinsic evidence is a survey of what consumers thought upon reading the advertisement in question, but the Commission also relies on other forms of extrinsic evidence including consumer testimony, expert opinion, and copy tests of ads.”



One of the best summaries of what makes an advertising claim deceptive us the FTC’s long-standing Deception Policy Statement: www.ftc.gov/bcp/policystmt/ad-decept.htm

[FlightGuy]

Last night I stayed up a bit and caught Jeff Paul's "Shortcuts to Internet Millions" infomercial.

Wow. What an absolute load of crap. It's amazing how easy it is to see through his crap. Maybe it's because I'm involved with internet marketing, but I'd like to think anyone with half a brain could see through that infomercial.

I just don't understand how peoples red flags don't go up after seeing nothing but sexy babes, Lamborghini's, HORRIBLY scripted (and acted) testimonials, locale, and pitch heavy, claim making narrations.

It's like all the FTC would need to present in front of a competent court would be that infomercial for them to really lay down some charges.

And we thought certain subject lines of emails were scamming... this makes those marketers look like saints.

Kindest,
John Dennis

[Josh Anderson]

From the news release:

http://ftc.gov/opa/2009/07/shortchange.shtm

The defendants allegedly made false and unsubstantiated claims about potential earnings for users of these systems.

In addition to the hidden forced continuity unsubstantiated earnings claims is one of the main charges.

I watched a Jeff Paul commercial where a IM Goober we all know who speaks at a lot of big IM events.

This Goober was used as a testimonial on the Jeff Paul infomercial. He was saying how he made $500,000 over a weekend using Jeff's strategies.

The problem was that he did not mention that he was already a top IM Goober, that he had hundreds of thousands of clients already, that he had also been a top promoter in many online business opportunities and MLM for years and years...

The kicker? This Goober did not even use his full name on the infomercial. Instead they showed his name as First Name Last initial.

There was no mention that the results were not typical and that they were in no way related to taking Jeff's course nor anything that Jeff had done with this guy.

I was shocked to see him participating in such deceptive marketing as a testimonial since he was not really one of Jeff's students from his course and obviously was just doing it as a buddy favor and would not even use his full name. They were pretending he was just average Joe Blow and not an experienced IM goober.

To top it off this particular IM Goober is a lawyer.

YouTube - Fraud: An Inside Look

And yes though the forum changes the word... goober is pretty accurate description ;-)

[Ram]

Jeff Paul's "shortcut" commercials are pretty bad.

But ...

One of the every first marketing courses I ever bought was Jeff's old mail order course. And I still say it's one of the best I ever read and studied. I learned a lot from that course.

A big problem, IMHO, is the outsourced coaching programs. Some of the telemarketing firms are ruthless and will extract anything they can. And the coaching is worthless as well - usually minimally trained home-based operators who have no real experience.

There are a few decent telemarketing firms out there. But there are a lot of boiler rooms too.

[Rezbi]

I'm not surprised considering all the complaints I've seen about these guys.

[seasoned]

Originally Posted by Scott Ames

The major offense in the complaint seems to be a continuity plan without disclosure.





They probably could keep going if they didn't get greedy and hide the continuity. I'm sure they would still make plenty of money too.

They ARE exagerating the potential gain and simplicity. For the free & clear, for example, the auctions may have a lot of restrictions, require you to be present, and some big bidders may be there. They point IS to drive the price UP after all.

"Continuity" is just the latest gimic. The FTC will NOT try you for violations they prove that caused the investigation! They will try to build a case for every violation that they find when they try to. In other words, a customer could complain about the "continuity", and the FTC may find you INNOCENT, but find that claims are exagerated, etc.... and charge you with THAT!

Steve

[ahlexis]

An interesting reason to use prepaid Visa and Mastercard gift cards . . . unexpected forced continuity!

And just think, there are congressmen/women who would like to do away with them! (Your tax dollars at work.)

[mikeyman120]

If Jeff Paul is in trouble he can hire the best lawyers money can buy!

[JennJessop]

This is really interesting. FTC has been cracking down on a lot of stuff. I remember just the other day reading about a women who was going to be charged some insane fine for illegally downloading music. It was like 80 thousand per song or something.

But I'm glad they are cracking down on scams, they really just give the rest of us who run legitimate businesses a bad name.

[mywebwork]

Wow - if they take Jeff's "Shortcut to Internet Millions" commercial off the air what will happen to 30% of our late night television? It's amazing how many times that comes on every night - it sometimes airs on 5 channels simultaniously!

I for one applaud the crackdown, scam artists like this give legitimate marketers a bad name. With the current economic crisis more people are turning to the Internet to make money and if their chosen introduction is Jeff's "Shortcut to Internet Millions" crap they are in for a rude (and expensive) surprise.

I won't miss Jeff's commercials. I will, however, miss his two co-hosts... perhaps they can get a job with Smiling Bob on the Enzyte commercials!

Bill

[adamv]

Originally Posted by mikeyman120

If Jeff Paul is in trouble he can hire the best lawyers money can buy!

That's true but will his lawyers be as good as O.J. Simpsons or only as good as Bernie Madoff's?

[reverendro]

I checked out Jeff's website. He's got nothing on there that says that it gets billed monthly when you order. The only thing he has on there is *you will be billed $39.95 after the first month. You may cancel at any time." I'm no attorney but I don't think that's going to cut it as a disclosure.

[Steven Carl Kelly]

Originally Posted by mywebwork

Wow - if they take Jeff's "Shortcut to Internet Millions" commercial off the air what will happen to 30% of our late night television? It's amazing how many times that comes on every night - it sometimes airs on 5 channels simultaniously!

I don't know if I've ever seen it even once.

[adamv]

Originally Posted by Steven Carl Kelly

I don't know if I've ever seen it even once.

I would reccomend watching it once. It's so unbelievable that it's funny.

Well, funny until you realize that a lot of people that don't know any better buy into his crap and get stuck in a forced continuity program or conned into some expensive coaching that's not worth a crap.

But if you can put that aside the infomercial is pretty funny.

[Steven Carl Kelly]

Originally Posted by adamv

I would reccomend watching it once. It's so unbelievable that it's funny.

How does it stack up against Don Lapre?

[Steven Carl Kelly]

Ok, now I found it on YouTube. Yeah, I've seen it. I clearly remember the AMPLE CLEAVAGE but I never remembered the product.

[adamv]

Originally Posted by Steven Carl Kelly

How does it stack up against Don Lapre?

I'd say it's better. It's certainly more up to date. I honestly can not comment on some of the more recent Lapre stuff ie. hawking vitamins because I saw about 2 minutes of that one 4 or 5 years ago but the old Don Lapre classic of "tiny classified ads can make you rich" was pretty good and for pure entertainment value the Jeff Paul infomercial beats the old Don Lapre stuff hands down.

A lot of people seem to like the Jeff Paul infomercial because of the hostesses but the "ladys" with their huge fake breasts don't really do much for me (I prefer a more natural look). I'm entertained by the terrible acting by the people that are supposedly making 6 figures every week from a bunch of pre-made template web sites selling who knows what.

There's one guy that says something like "I get 10 new websites every month and my income goes up every month, I'm making up to $100,000 every week" (or something like that). It's comical if you don't think about the poor souls pinning their hopes and dreams to a bunch of crappy websites that are exactly the same as the ones that are sold to a few thousand other people.

I don't see how anyone can possibly make money with this program but to be fair, I have not invested my $39.95 so maybe it really is a good business opportunity. (Note: heavy sarcasm.)

[Steven Carl Kelly]

Give me Tom Vu's commercials any day:

"Don't listen to your friends. They're losers!"
"Do you think these girls like me? NO, they like my money!"

Classic.

[adamv]

Originally Posted by Steven Carl Kelly

Give me Tom Vu's commercials any day:

"Don't listen to your friends. They're losers!"
"Do you think these girls like me? NO, they like my money!"

Classic.

That is classic. I was just a kid when Tommy Vu's infomercials were on but I still remember them all these years later. "I make u mil on air"

I forgot about the lines you quote though, those ARE classic. LOL

[Josh Anderson]

Since we are on the topic of forced continuity...

I am consulting on and helping set up the ecommerce automation and upsell funnel for a major new health supplement company that will be doing high volume.

They are in the diet industry and the initial offer is a trial offer so its forced continuity.

The platform that my company developed lets the business owner choose whether or not to display a cancel link inside the customer's billing management account. Much like paypal we designed this to give the customer control.

However, we also know that some companies want to make it more difficult for you to cancel... not impossible just a little inconvenient like requiring you to call into their customer service line to request to cancel.

Business owners know that people just put it off because they don't want to go through the hassle of a simple call to customer service even though its clear to the consumer they are being charged and all it takes to cancel is a call.

For this reason we let the business decide if they want to display the cancel link. Our system makes it easy for the client to update billing info and it makes it easy for them to cancel with a one click cancel option should the publisher decide to make that visible in the billing info update are for the customer.

We have to make this optional because we know that companies want control over when, where, and how a customer cancels a subscription.

I suggested to the owner of the company that he try a strategy that I believe could increase conversions...

But it also may increase cancellations.

That strategy is to create a small screen capture video explaining that its easy to cancel and that they can cancel at any time without having to call customer service by simply logging in and clicking the cancel link.

That video can then be put on the order page to increase customer confidence and put them in control and to be more aware of the continuity part of the offer.

This video could also be used on a customer service faq page and eliminate most billing customer service calls (except for refunds) automating the billing and billing management process. Additionally the client could update their cc info in the same place if they needed to and our system reminds them several times to update a CC if it fails on rebill.

Our system integrates with the fulfillment house and the fulfillment house also handles returns and will manually cancel subscriptions and process a refund on a return by logging into the CMS in our system.

He is hesitant to try my strategy because he wants to go with the more traditional call to cancel route so he will likely be hiding the cancel link and instead offering a call in number for customer service... there is always a chance though that he might try it or split test it.

I would really like people to try out this strategy more in many industries. Give the control to the client, boost confidence, and reduce overhead because of eliminating the majority of billing customer service automating as much of the entire operation as well.

This is no little operation either. The last company he built did 24m a month and the goal is 8m monthly 1000 orders daily with this one all of which will be run through our platform.

Many of our online digital content publishers use this great feature to automate and eliminate any billing and cancellation customer service but no one yet has tested the "don't worry you don't have to call customer service to cancel or manage your billing info. We make it easy for you." video as a conversion rate boosting tool.

I think its worth a test since in this environment given the economy, prevelance of scams, and reality that most everyone hesitates on subscriptions due to this very reason.

Why not change the norm and have a more open and customer confidence oriented way of managing billing and cancellations.

We developed it for this very reason.

[raiko]

I can't believe no one has mentioned the Rice Brothers. They were classics. Both about 3 feet tall and identical twins. Their infomercial made me realize that the general public would basically believe just about anything that was told to them as long as you showed a yacht, a Ferrari, and a mansion in the background at the time you were making your "pitch" - even if the Ferrari was driven by a 3 foot tall guy in a suit and tie.

[Don Schenk]

I just read through the FTC's complaint, all 38 pages of it. (I've never claimed to be sane.) It is fascinating. The scripts for all three defendants' infomercials are in there.

I was wondering why the FTC went after these three marketers all together in one complaint rather than individually. It seems the common thread is a company called Mentoring of America, LLC. This is the company selling the coaching and requiring the hidden, forced continuity.

The main complaints center around...
1- unsubstantiated claims in the infomercials,
2- forced continuity while not telling consumers about it before the consumers
give their credit card details.
3- the outrageously expensive coaching $195 to almost $15,000 - while telling consumers they can easily earn back the cost of coaching in a few months.

There would be a "Help Desk" toll-free phone number in with each defendant's initial sales package that would actually lead the confused consumer to a coaching telemarketer when someone would call for help.

The FTC complaint filed with the courts says, "Hundreds of thousands of consumers throughout the United States have purchased the John Beck system, paying approximately $92,000,000, including continuity plan charges."

And it also says, "Since January 2004, consumers have paid approximately $175,000,000 for personal coaching services for the John Beck system."

Wow!

I know a particular IMer who offers a coaching system after getting would-be newcomers into a continuation. He has "qualifier" sales people call to see if the person paying into the continuity would have money to put into coaching. He then has "closers" call the customer and try to sell a coaching system that ranges from about $3,000 to as much as $9,000.

It looks like a similar type of system.

:-Don

[Steven Carl Kelly]

Originally Posted by raiko

I can't believe no one has mentioned the Rice Brothers.

I ran into the Rice brothers as they were tooling around on their Segways.

[adamv]

Can they see over the handlebars of the Segways? Maybe they have to stand on a couple of phone books.

[Bill Jeffels]

Also, many complaints regarding Jeff Paul's Mentoring Of America and Membership Millions.

One woman explained how she was convinced to purchase a more exspensive package that was several thousand dollars, and she was told she would be walked through the program step by step by Jeff Paul.

And when she received her first "phone call" from Jeff Paul it was a recorded message. She Immediately smelled a rat and asked for her money back.

And Jeff's company refused her a refund.

Best

Bill Jeffels

[bobsedge]

I don't know about the practices of these people because I have not had any personal dealings with them, but when it comes to the FTC, guilt or innocence really doesn't matter. When they are out to make a point about a particular industry (in this case the biz op industry), they find the biggest fish and fry them. They are in it for the headlines and are pretty lazy, so infomercials make people a perfect target because there is a ton of exposure. The infomercial almost writes the complaint for them.

As for beating the FTC, it doesn't happen. To my knowledge the last company to defeat the FTC in court is Amway in 1979. You need a minimum of $1 million in legal fees to start.

Now what these guys need to hope is that the postal inspector doesn't want in on the case. The FTC are pussy cats compared to the postal service. They rip you a new one in federal criminal court and they are hard to beat.

There is a lesson here that we should all take notice of. When it comes to FTC enforcement, it is all about substantiating claims. They will kill you if you can't back up your claims and your testimonials better be real. We should all run our business as though someone is watching because you never know, someone may be.

[Don Schenk]

Originally Posted by bobsedge

There is a lesson here that we should all take notice of. When it comes to FTC enforcement, it is all about substantiating claims. They will kill you if you can't back up your claims and your testimonials better be real. We should all run our business as though someone is watching because you never know, someone may be.

Good point. In fact, excellent point.

Go read the entire complaint and you can see what the FTC has as evidence. IMHO it sounds like Mentoring of America really caused the tipping point.

:-Don