The FTC filed a lawsuit earlier this month in the U.S. District Court for the District of Utah charging telemarketers with violating the FTC Act and the Telemarketing Sales Rule. The FTC alleges that defendants deceptively claimed their “business coaching” would help consumers earn thousands of dollars a month by starting a home-based Internet business.
According to the complaint, the defendants’ telemarketing operation relied on “leads” supplied by other companies. Typically, these were consumers who had purchased some work-from-home-related product or service online for less than $100. For a fee or a percentage of defendants’ sales, the company that sold the product or service would encourage the buyer to contact an “expert consultant” or “specialist” to see if they qualify for an “advanced” coaching program. However, when the consumer called to speak to a “specialist” they were merely routed to defendants’ telemarketers.
According to the lawsuit, the defendants then charged consumers up to $13,995 for their purported business coaching program, which merely provided information that was already freely available on the Internet. Ultimately, most people who bought the service did not develop a functioning business, earned little or no money, and ended up deeply in debt.