Legal Library: Cases and Proceedings

The Federal Trade Commission is taking action to stop Lurn, a Maryland-based online business coaching seller, from making unfounded claims that consumers can make significant income by starting an array of online businesses. The company, its CEO Anik Singal, and spokespeople Tyrone Cohen and David Kettner have agreed to court orders that will require them to stop their unlawful practices, and require Lurn and Singal to turn over $2.5 million to the FTC to be used to refund money to consumers they harmed.

The Federal Trade Commission is sending more than $2.4 million in refunds to consumers who paid for Lurn’s business consulting programs and were deceived about the amount of money they could make from these services. 

The Federal Trade Commission is taking action against DK Automation and its owners, Kevin David Hulse and David Shawn Arnett for using unfounded claims of big returns to entice consumers into moneymaking schemes involving Amazon business packages, business coaching, and cryptocurrency. The FTC’s complaint alleges that the defendants promised consumers that they could “generate passive income on autopilot” when the truth was that few consumers ever made money from these schemes.

A proposed court order would require the defendants to turn over $2.6 million to be used to refund consumers harmed by their deception, as well as requiring them to stop their deceptive earnings pitches and follow the law.

The Federal Trade Commission is sending $2.8 million in refunds to consumers who were harmed by DK Automation and its owners, Kevin David Hulse and David Shawn Arnett, who used unfounded claims of big returns to entice consumers into moneymaking schemes involving Amazon and Walmart business packages, business coaching, and cryptocurrency.

As a result of a lawsuit filed by the Federal Trade Commission and the Utah Division of Consumer Protection (DCP), the principals of a Utah-based real estate investment training company will pay $15 million and be banned from selling money-making opportunities under a court order they have agreed to. In addition, two of the primary real estate celebrities who endorsed the training have agreed to orders that require them to pay $1.7 million.

The Federal Trade Commission is sending more than $10 million in refunds to consumers who paid for a real estate investment training program that allegedly made empty promises about earning big profits “flipping” houses.  

In February 2023, the FTC took action against a marketer of vitamins and other supplements called The Bountiful Company for abusing a feature of Amazon.com to deceive consumers into thinking that its newly introduced supplements had more product ratings and reviews, higher average ratings, and “#1 Best Seller” and “Amazon’s Choice” badges. The case against Bountiful marks the FTC’s first law enforcement challenging “review hijacking,” in which a marketer steals or repurposes reviews of another product. The company agreed to pay $600,000 in consumer redress to settle the FTC’s complaint. In March 2024, the Commission announced it was sending more than $527,000 to impacted consumers.

The Federal Trade Commission and 10 states are suing sham charity Cancer Recovery Foundation International, also known as Women’s Cancer Fund, and its operator, Gregory B. Anderson, for deceiving generous donors who sought to offer financial support to women battling cancer and their families.

In a complaint filed in federal court, the FTC and states allege that, from 2017 to 2022, Women’s Cancer Fund collected more than $18 million from donors. The sham charity claimed that it would use the donated funds to help women who were undergoing treatment for cancer and their families pay for basic needs. Instead, the complaint charges, only about a penny of every dollar donated went to provide such support, while the overwhelming majority went to pay for-profit fundraisers and Anderson.

The Federal Trade Commission has obtained proposed orders against the operators of a wide-ranging scheme known as “The Sales Mentor” that made millions by falsely promising consumers that they could make big money from telemarketing sales.

The defendants have agreed to proposed court orders that would require them to pay a total of $1 million for consumer refunds.

In a federal court complaint, the FTC charged the Tennessee-based group of companies, their owners, their officers, and a former sales director with deceiving consumers to pay hundreds or even thousands of dollars for supposed telemarketing training programs that rarely, if ever, delivered on what was promised. In addition, the FTC said the companies continued to make deceptive earnings claims even after they received the FTC’s Notices of Penalty Offenses on money-making opportunities and on endorsements and testimonials warning them that such conduct is illegal.

The operators of an alleged grant scam called Grant Bae that targeted minority-owned businesses will face a permanent ban from grant-writing and business consulting services as a result of a lawsuit brought against them by the Federal Trade Commission and the State of Florida.

In their complaint against Grant Bae, the FTC and Florida alleged that Grant Bae and its owner, Treashonna P. Graham, scammed businesses out of money, sometimes thousands of dollars each, with false promises of “guaranteed” grant funding and COVID-19 economic benefits that did not materialize.

In January 2023, the FTC issued an order requiring Denver-based HomeAdvisor, Inc. – a company affiliated with Angi, formerly known as “Angie’s List” – to pay up to $7.2 million for using a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesses operating in the “gig” economy. The Commission announced approval of the final consent order in April 2023.

In December 2019, the FTC announced The University of Phoenix and its parent company agreed to pay a record $191 million to resolve allegations that they used deceptive advertisements falsely touting their relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross. The settlement order requires UOP to pay $50 million in cash, as well as cancel $141 million in debts owed to the school by students harmed by the deceptive ads.

In March 2021, the FTC sent payments totaling nearly $50 million to more than 147,000 UOP students who may have been lured by allegedly deceptive advertisements.

In late September 2023, the U.S. Department of Education announced that it will forgive nearly $37 million in federal loans for more than 1,200 students affected by the University of Phoenix’s deceptive practices, based in part on the FTC’s 2019 case.

The FTC announced a settlement Celsius Network that will permanently ban it from handling consumers’ assets and charged three former executives with tricking consumers into transferring cryptocurrency onto the platform by falsely promising that deposits would be safe and always available.

As a result of a Federal Trade Commission lawsuit, Publishers Clearing House (PCH) has agreed to a proposed court order will require it to pay $18.5 million to consumers who spent money and wasted their time, and make substantial changes to how it conducts business online.

In a complaint against PCH, the FTC charges that the company uses “dark patterns” to mislead consumers about how to enter the company’s well-known sweepstakes drawings and made them believe that a purchase is necessary to win or would increase their chances of winning, and that their sweepstakes entries are incomplete even when they are not. The FTC also charges that the company has added surprise shipping and handling fees to the costs of products, misrepresented that ordering is “risk free,” used deceptive emails as part of its marketing campaign, and misrepresented its policies on selling users’ personal data to third parties prior to January 2019. Many consumers affected by these practices are older and lower-income.

Online fashion retailer Fashion Nova, LLC is prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle FTC allegations that the company blocked negative reviews of its products from being posted to its website

In a case first filed in January 2020, the FTC alleged that Success By Health and its executives James “Jay” Dwight Noland, Jr., Lina Noland, Scott A. Harris, and Thomas G. Sacca were operating an “instant coffee” pyramid scheme that used false promises of wealth and income to entice thousands of consumers to join.

The amended complaint alleges that the defendants were operating an additional pyramid scheme known as VOZ Travel. According to the amended complaint, the defendants sold consumers VOZ Travel “memberships” for at least $1,000 each. In exchange, they allegedly promised consumers access to a discount travel booking platform and the ability to earn rewards for recruiting other consumers to buy memberships. The complaint alleges that the defendants told consumers that some VOZ Travel members would be “making $1.53 [million] per year.”