Company Touting Work-From-Home Opportunities Must Pay $25M To Consumers Who Made No Money

(Listener42)

Here are a few clues that the employment “opportunity” you received in that email is a scam: 1) you’re required to pay your new employer hundreds of dollars for a starter kit or computer program; 2) once that program was purchased you’re encouraged to buy more programs for thousands of dollars; and 3) your new employer promises that you’ll be able to make thousands of dollars in a short period of time without ever leaving your couch. That’s about how it worked for a company the Federal Trade Commission recently ordered to repay consumers $25 million.

The FTC announced today that a federal district judge ordered business opportunity company, Zaken Corp. and its president to pay more than $25 million in refunds to consumer who fell victim to bogus claims that they could earn substantial income working from home.

According to the summary judgment, the court found that more than 99.8% of the 110,000 consumers affected by the alleged scheme didn’t make a penny.

Zaken Corp. and its president, Tiran Zaken, were found by the court to be in violation of the FTC Act and the FTC’s Business Opportunity Rule, which requires business opportunity sellers to provide specific information to help consumes evaluate a business opportunity.

The company allegedly claimed that, for a fee of $148 or more, their “QuickSell” program would help consumers find businesses with excess inventory to sell, and that they would find a buyer for the inventory and pay consumers half the sales price.

Consumers were promised they would earn at least $4,000 or more in the first 30 days and, on average, $4,280 per deal.

After consumers bought the program, they were inundated with ads to buy more business tools that cost hundreds or thousands of dollars. According to the FTC, consumers were encouraged to spend an extra $2,300 if they were serious about making money. However, consumers who made the additional investment received only a directory of defunct companies’ telephone numbers.

The company and Zaken were previously banned from advertising or selling work-at-home or other business opportunities.

FTC Action Results in Court Order Requiring Work-At-Home Scammers to Pay More Than $25 Million for Consumer Refunds [FTC]

by Ashlee Kieler via Consumerist