FTC Closes Envelope On Work-At-Home Firms
The Federal Trade Commission has announced the conclusion of cases against firms targeting "work at home" employers. We wrote about the initial
FTC charges earlier this year.
Since then, the federal agency has amended its complaint and judgments have been entered against multiple defendants at an individual and corporate level. The new FTC statement does not accuse any of the entities of wrongdoing, but instead says that monies were received when that they were not entitled to.
We believe that more important than any particular fine or criminal case the agency could have pursued through the Justice Department is the warning sent to the lucrative industry of luring unsuspecting consumers into an arrangement where the consumer not only doesn't make any money, but often is the only party paying any money. With repeated crackdowns, those engaged in improper business activities designed to cheat consumers have clear notice from the federal government that consequences will occur when caught.
Meanwhile, if a work from home or envelope stuffing deal sounds too good to be true, call your state's local employment commission and your local or state consumer protection office to check out the company before doing anything. Deals that sound too good often aren't good.
Labels: FTC, work at home
Spanish Speakers Still Scam Target
The Federal Trade Commission reviewed 300 work-at-home opportunities this week that targeted Spanish speaking candidates. The government agency found that nearly
two-thirds of those ads were "deceptive". One company had such egregious problems that the FTC sought an emergency restraining order, forbidding the company from operations.
“Ads promising big earnings by working from your home can look very attractive to many consumers,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “But, we know that most of the promises never come true and the opportunities never pay off. The FTC is using every tool in its arsenal, including law enforcement, education, and media monitoring, to protect consumers from these types of scams.”
We applaud the FTC's actions because many smart consumers do find themselves wondering if these operations can be true. After all, if a company can afford to keep advertising, then it must be legitimate, goes the reasoning. That is just not true, says Consumer Help Web's George Bounacos.
"Too many operations can quickly slip through the cracks of an overburdened protection system," Bounacos said. "We saw that in the CPSC's struggle against budget cuts ending up in massive recalls. The same difficulties plague the FDA, USDA and other agencies whose job is to protect consumers. Remember the words your parents taught you: if it sounds too good to be true, then it probably isn't."
Bounacos said that Consumer Help Web has worked with consumer regulatory agencies once the consumer agrees to release their information. "We've shared data at the state and federal level because those agencies have too much to focus on. If our complaint letter service uncovers systemic issues, we will ask our consumer for permission to share their information and turn the data over to regulatory authorities."
Consumer Help Web has sent information about lottery schemes originating from Canada and the U.K. among other more sensitive issues.
"Every company makes mistakes," agreed Consumer Help Web President Joan Bounacos. "What makes a company great is how they resolve those mistakes. As for those who target people with deceptive advertising, we resolved as a private organization to help the public sector protection agencies whenever appropriate."
ENVELOPE STUFFING SCHEMEOne of the FTC's latest victories is a law enforcement action against an alleged work-at-home scam. This enterprise advertised envelope stuffing jobs nationwide, including in Spanish-language newspapers. The advertising promised consumers a whopping $17.50 for each envelope they stuffed and guaranteed consumers a weekly paycheck of up to $1,400, or more.
One ad stated:
$1400/week stuffing envelopes @ home!
Easy work, awesome income, FT/PT,
No experience necessary. $200 Cash Hiring Bonus!
However, according to the FTC, after consumers paid a $45 “registration deposit,” most consumers never heard from the company again. Other consumers were ultimately told by the defendants that the only way to earn the promised money was to replicate the fraudulent envelope-stuffing scheme by making the same false claims to other consumers, a so-called Ponzi scheme or multi-level marketing scheme.
The FTC’s complaint names Integrity Marketing Team, Inc., Byron C. Peterson, and Min Sung Kim, doing business as Home Business System, as defendants and charges that they misrepresent that consumers who participated in their envelope stuffing opportunity are likely to earn substantial income, and that they would pay consumers at least $17.50 for each envelope the consumers stuff.
Labels: FTC, Spanish language, work at home
