November 18, 2004
Under the terms of a court order announced by the Federal Trade Commission, a set of defendants with mail drops in Willowbrook, Illinois are permanently barred from selling work-at-home business opportunities, and will pay $420,000 in consumer redress in connection with allegedly deceptive pitches made to consumers between 2001 and 2003.
According to the Commissions complaint, in promoting their program to consumers, the defendants violated the FTC Act through a variety of misrepresentations, including claims that consumers could earn between $500 and $5,000 per week stuffing envelopes at home, guaranteed.
Consumers typically paid between $55 and $150 for the defendants business-opportunity information, with almost none receiving return of the registration fee, let alone earning the income promised in the defendants ads.
The stipulated final order announced today settles the FTCs civil case against:
1) Financial Resources Unlimited, Inc.;
2) Supreme Mailing Services, Inc.; and
3) Mark E. Shelton, individually and as an officer of the corporate defendants.
The defendants did business as L. Lewis & Associates and A. Joseph & Associates.
According to the FTCs complaint, since at least 2001, the defendants sold envelope-stuffing business opportunities throughout the United States, claiming that consumers could make $500 WEEKLY by mailing sales brochures from home.
Calling their plan a Genuine opportunity, the defendants claimed that no experience was necessary and that they would provide consumers who called the toll-free number in their classified ads all the supplies they needed to earn guaranteed paychecks.
Consumers who responded to the defendants ads were connected to a recorded message that instructed them to leave their name and address. According to the FTC, consumers then received a form letter stating that they could earn $550.00 to $3,000 AND MORE WEEKLY!, based on $10 for each circular they mailed.
The defendants program was organized into five different groups, each promising a higher level of income, ranging from $550 per week in Group #1 to $5,000 weekly in Group #5, with sign-up fees ranging from $55 for Group #1, to $150 (originally $300) for Group #4. Group #5 was only for home workers who started under income Group #4" and received their 5th $3,000 paycheck.
The defendants allegedly identified Group #4 as the BEST DEAL! and provided consumers with examples of how much money they could earn at each level. The FTC alleged that consumers did not make the money promised and that the defendants did not pay $10 per envelope for all or many of the envelopes stuffed and mailed by consumers. The FTC also alleged that the defendants did not pay the cost of postage as they promised consumers.
The final judgment and order bans the defendants from promoting work-at-home business opportunities, prohibits them from making misrepresentations in connection with the advertising and sale of any goods or services, and bars them from providing anyone else with the means of engaging in the deceptive conduct alleged in the complaint.
In addition, the order requires the defendants to pay $420,000 for use as consumer redress, with an avalanche clause that requires the payment of $6.5 million the estimate of total consumer harm if the defendants are found to have misrepresented their financial condition. Finally, the order prohibits the defendants from distributing their mailing lists and contains terms related to monitoring and compliance to ensure that they meet the terms of the order.
