FTC Charges Miami Company Operating a Work-At-Home Business Opportunity with Engaging in Fraudulent Activities

A Miami-based company that advertised for home workers to help assemble "Native American" or "hand-crafted bracelets" has been shut down temporarily by a federal district court as a result of charges by the Federal Trade Commission that the company misled consumers about their prospects for profits in making the jewelry. The FTC alleges that National Crafters Corp. and its owner, Thomas F. Diaz, Jr., engaged in deceptive practices by falsely advertising that the assembly work was easy and required no prior experience, and that prospective assemblers could reasonably expect to earn $360 to $720 or more per week. The FTC also alleges that the defendants falsely advertised that they would provide all of the supplies the prospective assemblers would need to make the bracelets.

The FTC has asked the court to freeze the defendants' assets for possible consumer redress and to issue a permanent injunction against them to halt the allegedly deceptive practices.

In its complaint detailing the charges, the FTC alleges that National Crafters directly solicited consumers nationwide, sending consumers a letter, claiming to be looking for bracelet assemblers to supplement the company's workforce during its peak season. In the letter, the defendants represented that the prospective assemblers could "easily" or "potentially earn $360 weekly up to $720 or more per week." The defendants also stated that they would provide the home assemblers with the necessary tools and materials to make the bracelets. To become an assembler, however, the consumer was required to pay approximately $44.00 as a "reimbursable" deposit for the materials and instructions.

In fact, the FTC said, few, if any, of the work-at-home assemblers ever realized the earnings promised. The FTC also alleged that the defendants frequently provided materials that were inadequate in quality and quantity, which prohibited the assemblers from making commercially salable bracelets in accordance with the defendants' instructions and specifications. On numerous occasions, according to the complaint, the defendants rejected the bracelets sent to them by the work-at-home assemblers, stating that the bracelets did not meet the defendants' specifications, and then refused to pay for the work completed or to issue a refund for the materials deposit.

Specifically, the complaint alleges that National Crafters violated the FTC Act by misrepresenting:

• the amount of money a person can reasonably expect to earn from the bracelet-making opportunity; and
• that prospective work-at-home assemblers will receive adequate materials and instructions to be able to construct commercially salable bracelets.

The Commission vote to authorize staff to file the complaint in federal district court was 5-0. It was filed in the U.S. District Court, Southern District of Florida, Miami Division, on November 27, 2001 under seal. The seal was lifted on December 4, 2001. The FTC's Southeast Region - Atlanta handled the investigation, and received assistance in the investigation from the Miami-Dade Police Department and the United States Postal Inspection Service.

NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at https://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 002-3317)
(Civil Action No: 01-4826-CIV-Graham-Turnoff)