At the request of the Federal Trade Commission, a U.S. district court ordered the marketers of three get-rich-quick systems, including “John Beck's Free & Clear Real Estate System,” to pay a record $478 million for deceiving close to one million consumers with phony claims that they could make easy money using their programs. The Order also imposes a lifetime ban that puts three of the defendants permanently out of the infomercial and telemarketing businesses.
The Order comes about four months after the court granted the FTC's request for summary judgment against the marketers, concluding that they misled consumers using the infomercials for the John Beck program, as well as "John Alexander's Real Estate Riches in 14 Days," and "Jeff Paul's Shortcuts to Internet Millions." The court found that despite the marketers' easy-money claims for the systems, which cost $39.95 each, nearly all the consumers who bought them lost money. In addition, the defendants sold personal coaching services, which cost up to $14,995, to consumers who purchased any of the three systems.
The case is part of the FTC’s ongoing efforts to stop scams that prey upon financially distressed consumers. The Order represents the largest litigated judgment ever obtained by the agency.
Jeffrey Klurfeld, Director of the Western Region of the Federal Trade Commission, issued the following statement regarding the Order:
“This huge judgment serves notice to anyone thinking of using phony get-rich-quick schemes to defraud consumers. The FTC will come after you if you violate the law. It’s also a reminder to consumers that they should be skeptical about these types of easy-money claims.”
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