The FTC today announced that a group of people who had run a get-rich-quick-on-Amazon scheme have agreed to pay $102 million in fines and restitution. The people, operating under different names in Nevada and Massachusetts got people to pay from $995 to as much as $35,000 for “secrets” that were supposed to let them make big money on Amazon’s marketplace, although they had no real connection with Amazon at all.
According to the FTC, the people behind the scheme had taken their victims for at least $36.1 million, and possibly significantly more.
But we’re not talking about sophisticated corporations or businesses advertising without control over those who fake traffic and ad views. The subjects of this scheme were people who desperately wanted to get ahead and were taken by well-faked stories about how much the founders had made and come-ons pretending to have expertise they lacked.
If you’ve ever thought of getting into online reselling and marketing or otherwise trying to build a side business to start, pay attention. There are lots of people out there who want your money and whose claim to fame is really selling virtual snake oil.
The FTC alleged in a complaint in March that Christopher Bower, Adam Bower, and Jody Marshall were doing business as a number of companies: AWS, LLC; FBA Distributors; FBA Stores; Info Pros; and Online Auction Learning Center, whether in Nevada, Massachusetts, or both. Here’s the core set of charges:
Defendants prey on consumers who seek the American dream of starting a new business. Defendants lure consumers into purchasing expensive business opportunities with purported “secrets for making money on Amazon.” They represent that purchasers are likely to “create financial freedom” and earn thousands of dollars a month by implementing Defendants’ “systems for success on Amazon.” Contrary to Defendants’ promises, most, if not virtually all, purchasers do not earn the advertised income. Moreover, many elements of Defendants’ “system” violate Amazon.com Inc.’s policies. As a result, purchasers who deploy Defendants’ “system” often experience problems with their Amazon stores, including suspension and the loss of their ability to sell on Amazon.com.
The details are worse. The $995 package was for a three-day workshop, videos, and webinars for “tips, tricks, and techniques.” The top package, $34,995, included 16 one-on-one coaching sessions as well as additional videos and webinars. The contents of the coaching sessions were apparently largely what was delivered in online, video, and webinar sessions.
If you a little prowling around online, you find things like a WordPress-hosted blog that claimed these people were legitimate. Uh, yeah. You can also see a Massachusetts Better Business Bureau post stating that Online Auction Learning Center would not respond to BBB questions about their business claims and that the company was now out of business.
The three defendants did not admit to any criminal charges but agreed to pay the walloping fine and to a permanent restraining order keeping them from making any earnings claims unless they can prove them and from misrepresenting anything material to consumers about a product or service.
There are scoundrels everywhere, looking to part you from your hard-earned cash. Here are some things to consider the next time you see a business “opportunity”:
- If something sounds too good to be true — in this case, for example, spending 30 to 60 minutes a day to make an “extra $5,000 to $10,000 a month” — then it is. Not it probably is. It is. Success in business is hard work.
- Anyone who has really succeed has details they can share and prove.
- They should be able to show success in business beyond selling systems on how to make money. Don’t take someone’s word for it. There should always be public records or information for insight. If someone claims to have made a bundle in real estate, then there have to be details showing ownership of property.
- Do some research and find others who have done this before and ask how they’ve done. Don’t settle for references the people touting the opportunity offer.
- Recognize that building a business takes time. Don’t expect shortcuts that are illusory.