The FTC charged that a business opportunity and coaching scheme bilked consumers out of tens of millions of dollars. The scheme grew on the back of baseless claims about how much money customers could make.
The company behind the scheme, Automators, AI, (operated by the former owners of Empire Ecommerce and Onyx Distribution), promised to set up for buyers profitable third-party stores on sites like Amazon, Walmart, and Facebook Marketplace, using artificial intelligence to pick top-selling products.
They said they were experts who’ve been doing this for years and that they’ve helped clients make a lot of money. In reality, most of the online stores the company managed for its clients were routinely suspended and shut down by Amazon and Walmart for policy violations. And despite their claims that customers could make thousands of dollars a month in passive income, most clients didn’t even recuperate the money they paid to buy in.
So, what should you do if you’re thinking about buying into a business opportunity? Ask the seller to give you a copy of the legally required 1-page disclosure document. It must
- identify the seller
- tell you about any lawsuits against the seller
- tell you if the seller has a cancellation or refund policy, and what the terms are
- give you a list of references
- tell you if the seller is making a claim about how much money you can make. If they are, they also must give you an earnings claim statement.
If the seller says anything that contradicts what’s in their disclosure document or earnings claim statement, that’s a sign of a shady operation that you should steer clear of.
To learn more, check out When a Business Offer or Coaching Program Is a Scam.
If you think a business opportunity or coaching program is a scam, report it to the FTC at ReportFraud.ftc.gov.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
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- We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
- We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to ReportFraud.ftc.gov.
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I thank You for all that You do and all of the work you complete and are in the process of completing to make our world in Consumer Protection a safer place.
I VALUE these emails!!!!?
Thanks for all you do!!!
I have found this article to be very important and helpful especially in identifying the signs of really business opportunity to the scam. More people reading this would be so much enlightened and avoid being robbed by the online fraudulent activities.