FTC Wins Case Against ‘Get-Rich-Quick’ Infomercials

A federal court judge has ruled that the marketers behind get-rich-quick infomercials – peddling real estate and Internet riches – misled consumers in violation of federal law, according to the Federal Trade Commission.
Despite the marketers’ claims regarding their money-making “systems,” which cost $39.95 each, nearly all consumers who bought them lost money, the FTC said.
Nearly 1 million consumers lost more than $450 Million, the agency said.
U.S. District Judge Jacqueline Nguyen, of the U.S. District Court for the Central District of California, asked the FTC and the three defendants to submit arguments on the appropriate remedy for the violations.
The targeted marketers are behind the infomercials for “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.”
The court found that the John Beck falsely represented that consumers could purchase homes at tax sales in their own area for pennies on the dollar, and that they could make money easily with little financial investment.
The court also found that the infomercials of John Alexander and Jeff Paul misled consumers by creating an overall impression that “a typical consumer can easily, quickly, and ‘magically’ earn thousands of dollars per week simply by purchasing and using” their systems.
Consumers who purchased the systems were automatically enrolled in programs that charged recurring fees and cost an extra $39.95 per month.
The court found that the three men failed to adequately disclose that consumers who purchased the systems would be enrolled in the continuity plans, and submitted consumers’ payment information “without their express informed consent,” in violation of the FTC Act and the Telemarketing Sales Rule.
The court found John Beck Amazing Profits LLC, John Alexander LLC, Jeff Paul LLC, Family Products LLC, and Mentoring of America LLC liable for the misrepresentations in the infomercials and those made by the defendants’ telemarketers.

Leave a Reply

Your email address will not be published. Required fields are marked *