Jesse Willms Loses Everything to FTC

Profile picture of the author LukePeerFly by LukePeerFly Posted: 02/23/2012
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
#ftc #jesse #loses #willms

  • Profile picture of the author pacelattin
    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
    Mike Hlatky
    I am confused as to what he actually did?
  • Profile picture of the author J Bold
    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
    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 Marhelper
    Marhelper
    Originally Posted by Mike Hlatky View Post
    I am confused as to what he actually did?

    How about this for a starter:

    Debiting consumers’ bank accounts without first obtaining their express verifiable authorization;
  • Profile picture of the author Centurian
    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 Brian John
  • Profile picture of the author sbucciarel
    sbucciarel
    Originally Posted by Mike Hlatky View Post
    I am confused as to what he actually did?
    Con artist took in $359 million with bogus 'free-trial' offers
    Life Inc. - Con artist took in $359 million with bogus 'free-trial' offers
  • Profile picture of the author J Bold
    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
    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.
  • Profile picture of the author HeySal
    HeySal
    Originally Posted by Marhelper View Post
    How about this for a starter:

    Debiting consumersÂ’ bank accounts without first obtaining their express verifiable authorization;

    Oh yeah - that'll do it. Sorry. Not gonna shed tears for this guy. You want to do the crime, you better get used to the idea of consequences. This guy is not a victim.
  • Profile picture of the author sbucciarel
    sbucciarel
    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 sunray
    sunray
    Originally Posted by sbucciarel View Post
    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.
    As I said, it very usual that a trial offer must be canceled, and if not, it is taken as an order and the account is charged. It's SO common.
  • Profile picture of the author r30ducez
    r30ducez
    I'm surprised he got away with it for as long as he did, $350 Million doesn't happen over nite.
  • Profile picture of the author Brian John
    Brian John
    Originally Posted by sbucciarel View Post
    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 Marhelper
    Marhelper
    Originally Posted by HeySal View Post
    Oh yeah - that'll do it. Sorry. Not gonna shed tears for this guy. You want to do the crime, you better get used to the idea of consequences. This guy is not a victim.
    Yeah, it's a particularly sensitive issue to me as I have had to deal with someone just like him. I finally got my money back but only after countless hours haggling with my bank.
  • Profile picture of the author sunray
    sunray
    Originally Posted by r30ducez View Post
    I'm surprised he got away with it for as long as he did, $350 Million doesn't happen over nite.
    It really doesn't. There must have been something else that triggered it now. Maybe he decided to use his money in politics in a politically incorrect way? Or maybe some of his info-products exposed somebody?
    Could a Canadian shed some light on it?
  • Profile picture of the author mightiest
    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 Acai 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 Acai 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 acai 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 acai / colon cleanse combo.
  • Profile picture of the author Paul Myers
    Paul Myers
    It really doesn't. There must have been something else that triggered it now. Maybe he decided to use his money in politics in a politically incorrect way? Or maybe some of his info-products exposed somebody?
    Investigations like this don't happen overnight either. And there has to be some time involved in the selling before they start.

    I understand skepticism. Really, I do. But why would you need to reach for conspiracy theories in a case like this? If he did what they say, he was way over the line.

    I don't know this guy's business practices. I do know that the things they're describing are disturbingly common in the CPA end of online advertising. Enough so that I feel dirty even going into the CPA sub-forum of this forum to deal with a reported spam there.

    Wouldn't hurt my feelings if Allen just deleted the whole section.


    Paul
  • Profile picture of the author sunray
    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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