'Tax Club' Bilked Consumers Launching Work-at-Home Businesses: FTC

'Tax Club' Bilked Consumers Launching Work-at-Home Businesses: FTCAn enterprise known as the Tax Club and operating under various other corporate entities took in more than $200 million since 2008 by calling people who wanted to start a home-based business, and selling them products and services in violation of federal and state laws, according to a complaint filed by the Federal Trade Commission and attorneys general from Florida and New York.
The enterprise allegedly claimed affiliation with other companies that already did business with the targeted consumer, and sold products and services they falsely claimed were essential for the business to succeed, such as tax return preparation and individualized tax advice, customized business planning and counseling, and business credit development services.
The operation’s telemarketers relied on lists of potential customers they bought from sellers of work-at-home or other business development services, including those that were the subject of numerous consumer complaints and law enforcement actions.
During long sales calls, telemarketers did not disclose promptly that their purpose was to sell something, and often used high-pressure sales tactics and false claims.
The complaint alleges that the scheme operations falsely claimed affiliation with other companies, misrepresented the cost of their services and consumers’ earnings potential, and falsely claimed to provide specialized business assistance, in violation of the FTC Act.
They also allegedly violated the FTC’s Telemarketing Sale Rule by misrepresenting material facts about their services and failing to disclose promptly to people they called the seller’s identity, the call’s purpose, and the nature of the services.  The complaint also alleges that the defendants violated the consumer protection laws of New York and Florida.
As alleged in the complaint, the enterprise encompasses at least 12 interrelated corporate entities, doing business under dozens of names, controlled by four individuals.

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