Feds Settle With Work-at-Home Marketer

Scams, disguised as work at home “opportunities,” have become more widespread in a worsening economy. Many consumers desperate for income jump at what seem to be easy ways to earn extra money.

The Federal Trade Commission (FTC) has reached a settlement with Independent Marketing Exchange, Inc., which it says made deceptive about its work at home and mystery shopping opportunities. The FTC’s complaint against the defendants was part of a broader crackdown in 2010 on work-at-home scams called “Operation Bottom Dollar,” which resulted in law enforcement actions against seven operations that targeted job seekers.

Settlement

The settlement order against Independent Marketing Exchange, Inc. and its principal, Wayne Verderber, II, imposes a judgment of $919,000, which will be suspended when the defendants turn over three rental properties, a Mercedes Benz, precious metals, and other assets.  If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgment will become due.

The settlement order also bans the defendants from marketing or selling work-at-home and mystery shopping opportunities and from assisting others in doing so.  They also are barred from making deceptive claims about goods and services and are required to provide proof for earnings claims they make.

The FTC says this alleged scam, and others targeted in Operation Bottom Dollar, harmed consumers nationwide. ConsumerAffairs.com receives a steady stream of reports from consumers who think they are improving their financial fortunes, but end up doing just the opposite.

“We ordered the Anthony Morrison Profits from Home books from an infomercial for only $20,” Henry, of Las Vegas, told ConsumerAffairs.com recently. “After we bought the books the phone calls started. We read the books and this guy really makes it sound like this is the greatest thing on earth. After reading the books and talking it over we decided to go with the program. We failed to Google the guy and read what other people were saying. Needless to say $11,680 later they won't let us cancel or get a refund.”

Parsing the pitch

Donald, a reader from Aurora, Ill., recently wrote ConsumerAffairs.com with his in-depth analysis of QuickProfit.com's work-at-home pitch. A careful reading of the company's material, he says, reveals the truth. You just have to read it.

“The very first part of any 'work-at-home' promo I read is the company's disclaimer,” Donald told ConsumerAffairs.com. “Without exception disclaimers disavow the objective validity of testimonials and/or the account or featured 'story' of the pitch spokesperson, if not the very existence thereof.”

As an example, he points to a glowing success story about the program on the company's website, followed by the disclaimer “the story depicted on this site and the person depicted in the story are not real.”

“Furthermore, the trademarks of corporations of Google, Yahoo!, Bing, ABC, CNBC and MSN, ostensibly endorsing this "LIMITED TIME OFFER," are prominently displayed throughout this Internet promo,” Donald said. “It is only in fine print that you find the admission, 'This offer does not intend to offer employment with Google,” Google does not endorse or sponsor this site.

Donald says most of these sites, somewhere on the site, have an “earnings disclaimer,” pointing out the obvious: “Your level of success in attaining the results claimed in our materials depends on the time you devote to the program, ideas and techniques mentioned, your finances, knowledge and various skills.”

In other words, it's probably going to work only for the fraction of individuals who could start their one business from scratch, without the help of an expensive work-at-home scheme.

The FTC spent the better part of 2010 going after companies that unfairly exploited consumers with deceptive or non-existent employment opportunities. Donald's point is a good one – consumers' best protection is their common sense. Read everything about the company you can find before making any commitment and remember that offers that sound too good to be true almost always are.