Jesse Willms Loses Everything to FTC

by 79 replies
I was just reading this and it absolutely blew my mind:
Jesse Willms Loses Everything to FTC

The settlement also fines him $359 Million in cash, which will be suspended as long as Willms turns over pretty much everything that he owns. The order requires him to sell his house, close the and sell all his companies, cars, furs, and expensive artwork.
No wonder the FTC is cracking down so hard on our industry
#main internet marketing discussion forum #ftc #jesse #loses #willms
  • Profile picture of the author pacelattin
    I spoke to a friend in the know, and they said that this includes his "hidden" bank accounts, etc. He needs to give all the money back, and if he doesn't.... I'm told as part of the deal, the Canadian Authorities are holding off a criminal prosecution.
  • Profile picture of the author Mike Hlatky
    I am confused as to what he actually did?
  • Profile picture of the author J Bold
    Yep, I'd like to know more about what he did constitutes as fraud, also.

    Guess Google is my friend on this one. Maybe some reading for much later tonight when I have time.
  • Profile picture of the author Robert Michael
    It sounds like he was an advertiser who didn't properly disclose all information.

    He pushed his offers via CPA networks, and unsuspecting "leads" were charged without notice.

    Long story short, of course. lol
    • Profile picture of the author Centurian
      Originally Posted by Mike Hlatky View Post

      I am confused as to what he actually did?
      Originally Posted by redicelander View Post

      Yep, I'd like to know more about what he did constitutes as fraud, also.

      Guess Google is my friend on this one. Maybe some reading for much later tonight when I have time.
      There are a number of issues here. These typically start with "health claims," which the medical establishment always targets. That's usually what attracts attention. A savvy copywriter can avoid crossing the line, but if you've got other issues they'll get you there.

      It sounds like he was doing "negative billing subscriptions;" where your forced in and have to opt out. By the time you call and cancel, they've collected a couple of months. And of course you were required to give 30 days notice to cancel. We all hate those anyway.

      Frankly, this rash of "negative opt-ins" we had for some time is why merchant banks became leery of internet marketing and recurring billing.

      Nevertheless, these agencies are targeting entrepreneurs at all levels, online and offline. Some deserve it. Some don't.
  • Profile picture of the author larksky000005
    Banned
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  • Profile picture of the author J Bold
    I think "bogus" is the key here.

    And the debiting of bank accounts without the proper permissions. Um, yeah.

    Doesn't damn the whole industry, of course. Just be ethical and do things by the book. These things don't scare me because I know I'm not going to get into anything like that.
  • Profile picture of the author sunray
    It's very usual that trial offers must be canceled when no interest in buying the full product. Health subjects are under the control of Big Pharma which operates quite like a mafia, financing governmental institutions so they prohibit alternative methods, natural remedies etc.

    I'm just not buying the story presented by Canadian socialist authorities. Maybe they have a point, maybe the guy did something wrong, I have no information. But what I see on his website, gives a picture of a caring man with dozens of charity projects. Criminal minds usually do not run charities.
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    • Profile picture of the author sbucciarel
      Banned
      Originally Posted by sunray View Post

      I'm just not buying the story presented by Canadian socialist authorities. Maybe they have a point, maybe the guy did something wrong, I have no information. But what I see on his website, gives a picture of a caring man with dozens of charity projects. Criminal minds usually do not run charities.
      Criminal minds who bilked people out of millions of dollars by charging them for stuff they did not want and did not order can put whatever public relations propoganda on their websites that they want to ... he's still a lowlife scam artist.
    • Profile picture of the author mightiest
      Originally Posted by sunray View Post

      It's very usual that trial offers must be canceled when no interest in buying the full product. Health subjects are under the control of Big Pharma which operates quite like a mafia, financing governmental institutions so they prohibit alternative methods, natural remedies etc.

      I'm just not buying the story presented by Canadian socialist authorities. Maybe they have a point, maybe the guy did something wrong, I have no information. But what I see on his website, gives a picture of a caring man with dozens of charity projects. Criminal minds usually do not run charities.
      No offense, but you're just terribly misinformed. Jesse Willms was the first guy to launch the Wu Yi Tea diet as a product back in 2006. He pushed these pills onto affiliate networks (Advaliant was the first) and then started running huge volume. He quickly switched to **** berries + colon cleanse and was the driving force behind its surge in 2007-2009.

      That's not illegal, but the rest of it is.

      He sold his product as a "free" trial. You pay $5.00 shipping and get 10 days to evaluate the product. If you don't want it you must call in and cancel your subscription. This tactic is called negative option rebilling and is completely legal. What isn't legal is when you make it nearly impossible for people to cancel.

      Jesse's companies would typically take 3-4 days to process your order and then it would take 3 more days for it to arrive at your house. He started your evaluation period the second you ordered the product, which means you had less than 4 days to evaluate it. Most people didn't even realize it was a rebill because they buried their terms and conditions in a tiny link at the bottom of their landers.

      Anyway, that wasn't the worst part. To boost profits, Jesse would upsell customers and, at it's worst, people were getting nailed with a $400 dollar bill for a "free" product ($80 for product + $320 in automatic upsells). That's illegal.

      Even if you realized you had to cancel, doing was nearly impossible. At Affiliate Summit West in 09 there was a famous meeting between people I won't name, including Jesse. They were negotiating the terms of the next series of **** Berry offers and the networks, which were getting heat at this point for carrying these products, basically asked all the merchants to pull out their cell phones and call their call centers right there on the spot to see how long it took to get a person on the phone. Two hours later and most of the phones were still on hold.

      If you got through to someone, they made your life a living hell when you tried to cancel. Cancelling online was equally as convoluted.

      To add insult to injury, Jesse ran a lot of these products directly. He and two other guys were the originators of the Becky's Weight Loss style of Flog and they were the first guys to push out landers that pushed both **** and colon cleanse at the same time. The FTC has called this type of marketing, where you create fake profiles, make insane claims, and pretend to be a customer to be completely illegal.

      Here is the bulk of the complaint:

      -debiting consumers' bank accounts without first obtaining their express verifiable authorization;
      -misrepresenting any product or service or the terms and conditions associated with any offer, specifically including claims of "free," "risk-free," or "trial offer;"
      -failing to clearly disclose the terms and conditions of any offer, including refund terms, before requesting consumers' payment information;
      -making misleading or unsubstantiated disease-prevention, weight-loss, and other health-related claims;
      -using false or deceptive endorsements and testimonials;
      -failing to monitor the activities of marketing affiliates and affiliate networks involved in the marketing of any Willms product or service; and
      -making misrepresentations in order to obtain services from payment processors, banks, and other third parties.
      Oh and Jesse got sued out of the ass by Microsoft a few years earlier for buying education versions of software in Canada and then reselling it in the US at retail price. I can't post links yet, so the complaint is titled:

      Microsoft Corp. v. eDirectSoftware, Jesse Willms, Linda Willms, Dave Willms, 1016363 Alberta Ltd., 1021018 Alberta Ltd. and John Does 1–10

      Edit: I just want to add that he scammed upwards of 4 million people with the **** / colon cleanse combo.
  • Profile picture of the author sunray
    mightiest,

    I see. Well, yes, what you have described seems indeed over the line, as Paul said. Thank you taking the time to explain it to me :-)
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  • Profile picture of the author Mikal Laster
    You can Never Hide!
  • Profile picture of the author THK
    If those claims are true, the guy is not really an honest person. Good to know that the problem here is the person, not the industry.

    It should not be that difficult to not commit a fraud.

    Tanvir
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  • Profile picture of the author Ben Gordon
    This guy is talented, he just misused his talent. He saw openings in the market and went for them to make some quick bucks; typical action that young marketers make. Honestly, he definitely deserves the punishment and I totally agree with what the FTC is doing, but he's going to get his money back and probably start business again in another niche. We just have to beware of these kinds of business practices and not encourage them.
  • Profile picture of the author tayuyaa
    He had it coming...these kind of people need to be stopped and reap what they sow...I'm glad I never promoted such offers...

    edit: Let's hope Ben Gordon is wrong and that he'll never start business again!
  • Profile picture of the author nickdamodda
    Sounds like he didn't know how to protect himself.
  • Profile picture of the author KenThompson
    The FTC should mandate that no business may ask for CC info for a 'free trial offer.'

    Re Paul Myers' comments about CPA...

    I got burned so badly by CPA networks back in 06 that it cured me of them. Many of them are just as sleazy and criminal as the guy talked about in the OP.

    I was acquainted with someone years ago who walked out of a CPA network, well known at the time, over things she thought were highly improper and wrong (on the part of the network house). She was an account manager.

    Then there's this article that arrived in my inbox just this morning.

    Is Epic the Next COPEAC? Non-Payment Stories Grow.

    I think those who are serious and professional in the CPA industry should form an oversight group or watchdog group to whom all networks should be accountable. It's like this... if there is no internal oversight within an industry with chronic and visible problems, rest assured some other agency will do it for them.


    Ken
    • Profile picture of the author ShaneGorry
      Originally Posted by KenThompson View Post


      I think those who are serious and professional in the CPA industry should form an oversight group or watchdog group to whom all networks should be accountable. It's like this... if there is no internal oversight within an industry with chronic and visible problems, rest assured some other agency will do it for them.


      Ken
      It certainly makes sense to take control of your own industry rather then to have controls forced onto you from the outside.

      Also I have to wonder who gets the "everything" he is losing any of it going to the "victims?"
  • Profile picture of the author tryinhere
    Jesse Willms Loses Everything to FTC

    How does a man loose something that was never his in the first place ?
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    Why are people posting stupid articles everywhere? reminds me of the backlink farms of yesterday, Don't start me on the spammers. What drugs are people on?

  • Profile picture of the author skagenweb
    I must say, he is a freaking genius though. Evil, but simply genius. One-third of a billion dollars through online marketing is something to be proud of.
    • Profile picture of the author sbucciarel
      Banned
      Originally Posted by skagenweb View Post

      I must say, he is a freaking genius though. Evil, but simply genius. One-third of a billion dollars through online marketing is something to be proud of.

      Yeah, the genius can be very proud of himself for bilking millions out of unsuspecting customers and having the law remove everything he owns from him. Pure genius. Seriously. :rolleyes:
    • Profile picture of the author dcristo
      Originally Posted by skagenweb View Post

      I must say, he is a freaking genius though. Evil, but simply genius. One-third of a billion dollars through online marketing is something to be proud of.
      wow some people really are stupid, just when i thought i had seen it all.
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    • Profile picture of the author pacelattin
      No its not, and I'm tired of seeing people glorify people like this. There are legit ways to make money, and doing things illegally or preying on customers, consumers is not the way.

      He's a fraudster and was caught - he has been under investigation for years. Consumers are smart now, they report fraud, they go after the fraudsters.

      Originally Posted by skagenweb View Post

      I must say, he is a freaking genius though. Evil, but simply genius. One-third of a billion dollars through online marketing is something to be proud of.
  • Profile picture of the author Fraggler
    Freaking genius?

    Stealing from people while you hide from contact doesn't make you a genius. It makes you a thief - that got caught. Hardly smart!
    • Profile picture of the author ryanmilligan
      Banned
      Originally Posted by Fraggler View Post

      Freaking genius?

      Stealing from people while you hide from contact doesn't make you a genius. It makes you a thief - that got caught. Hardly smart!
      I agree with you. Thiefs are disgusting.

      But like said, not many people can make this kind of money through online marketing. He was smart, just not smart enough to not get caught.
  • Profile picture of the author Gary Huynh
    Luke, was this advertiser a part of the Peerfly network? If any networks allow this person to be a customer, then they should accept some of the consequences. Just sayin...
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  • Profile picture of the author Kierkegaard
    The Willms settlement order also permanently prohibits Willms from ever engaging in any business that works by:
    • debiting consumers’ bank accounts without first obtaining their express verifiable authorization;
    • misrepresenting any product or service or the terms and conditions associated with any offer, specifically including claims of “free,” “risk-free,” or “trial offer;”
    • failing to clearly disclose the terms and conditions of any offer, including refund terms, before requesting consumers’ payment information;
    • making misleading or unsubstantiated disease-prevention, weight-loss, and other health-related claims;
    • using false or deceptive endorsements and testimonials;
    • failing to monitor the activities of marketing affiliates and affiliate networks involved in the marketing of any Willms product or service; and
    • making misrepresentations in order to obtain services from payment processors, banks, and other third parties.
    Wasn't he (along with everyone else) already permanently prohibited from doing this? :confused:
    • Profile picture of the author sbucciarel
      Banned
      Originally Posted by Kierkegaard View Post

      Wasn't he (along with everyone else) already permanently prohibited from doing this? :confused:
      Yes of course, but there's plenty of people who don't abide by the law, particularly when they think they can make millions.

      This kind of marketing is precisely why the FTC has deemed it necessary to create more rules and oversight of the industry. We can all thank criminals like him for that.
    • Profile picture of the author pacelattin
      Yes, of course - however, it means that if he ever does it, the settlement is out the window and he gets %&$#ed really hard by the FTC

      Originally Posted by Kierkegaard View Post

      Wasn't he (along with everyone else) already permanently prohibited from doing this? :confused:
  • Profile picture of the author planetlubs
    I think for Jesse, he saw it coming. But the only irony is where it says he failed to monitor the activities of his affiliates and how they were promoting his services.

    I think we need to pay attention to that. Do you monitor the way your affiliates market your products? And how they represent it to the prospective customers?
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    • Profile picture of the author CDarklock
      Originally Posted by planetlubs View Post

      I think we need to pay attention to that. Do you monitor the way your affiliates market your products? And how they represent it to the prospective customers?
      I thought this needed to be in a bigger font.
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    • Profile picture of the author koolphoto
      One done and quite a few more to go. I don't like govt intervention, but if that what it takes to keep an industry clean then so be it.
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