Work-from-home schemes have been around for years, promising fortunes of various sizes through easy-to-launch startup businesses.
But usually its the schemers pushing these programs that make millions of dollars.
Case in point: a federal court has frozen the assets of persons and entities tied to a huge work-from-home opportunity promotion “that conned millions of dollars from consumers” by falsely promising big earnings through coaching services and their own Internet businesses, said the Federal Trade Commission Monday.
In the first phase of the scheme, outlined by the FTC, the operators used deceptive emails and websites to get consumers to purchase relatively inexpensive work-at-home kits.
They sold these kits, which typically cost from $37 to $99, with claims such as: “If You Can Spare 60 Minutes A Day, We Can Offer You a Certified, Proven And Guaranteed Home Job To Make $379/Day From Home!”
Then came the bigger hit.
Cost of Coaching: Up to $12,000
Instead of showing consumers how to earn this income, these websites tried to sell signed-up consumers more products or services. In the second phase of the scheme, the operators promised consumers that they would earn thousands of dollars a month via their coaching program to help them set up their own online businesses.
They also encouraged consumers to put the entire cost of the program, generally from $3,000 to $12,000, on their credit card, claiming they would be able to pay it off within a few months.
The FTC: “In the third phase of their scheme, the defendants pretended to provide consumers with the promised ‘coaching’ services, while pitching yet additional costly add-on services such as business formation, website design, website development, accounting and tax filing services, and drop-shipping services, none of which proved helpful.”
The U.S. District Court for Utah froze the assets of the defendants, who did business under a variety of names, including Essent Media, LLC, Net Training, LLC, YES International, Coaching Department, and Apply Knowledge, and appointed a temporary receiver to take control of the operations, pending the outcome of a preliminary injunction hearing set for March 20, 2014.
The FTC seeks to put a permanent stop to the operations and return money to consumers.
“This case halts a massive scam that bilked consumers out of millions for useless work-at-home kits and business coaching services,” said Jessica Rich, Director of the Bureau of Consumer Protection. “The defendants duped consumers into thinking they could earn thousands working from home. Protecting consumers from such pernicious schemes remains a top priority.”
Here’s the temporary restraining order.