AG Zoeller joins FTC in ‘Operation Lost Opportunity’

Nov. 15, 2012

Indiana lawsuits filed after three victims lost more than $14K

INDIANAPOLIS – Indiana Attorney General Greg Zoeller teamed up with the Federal Trade Commission (FTC) today in Washington, D.C. to announce a joint effort to crack down on business opportunity fraud.

Would-be entrepreneurs are often deceived by phony get-rich quick scams that promise easy money for a small upfront investment. The FTC’s continuing “Operation Lost Opportunity” includes asking state attorneys general to ramp up their investigations into these illegitimate companies. This effort by the Consumer Protection Working Group of the Financial Fraud Enforcement Task Force includes 22 actions brought by the U.S. Department of Justice, 21 actions by the U.S. Postal Inspection Service, and 15 actions by state attorneys general in Indiana, California, Arizona and Colorado.

“Today’s announcement is a great example of how consumer protection agencies on the state and national level work together to connect the dots and combat fraud against those seeking economic opportunity,” Zoeller said. “As part of this effort, the Indiana Attorney General’s Office aggressively investigated consumer complaints regarding business opportunity scams and recently filed lawsuits against three out-of-state companies which all made promises of attractive profits to consumers before taking off with their money.”

The FTC announced seven new law enforcement actions and developments in five other cases involving scams that falsely promise jobs and opportunities to “be your own boss” to people who are unemployed or underemployed. The defendants in the FTC’s cases allegedly lured consumers with deceptive offers to help them start businesses as mystery shoppers, credit card processors, website operators and government insurance refund processors.

Zoeller’s office filed lawsuits in Marion County against companies accused of ripping off three Indiana consumers for more than $14,400. Zoeller said the large dollar amount taken from so few victims is only a small slice of the overall negative impact of these scams. In the past two years, the Attorney General’s office has received nearly 130 consumer complaints regarding various business opportunity scams.

In the Indiana lawsuits, defendants include All American Web Consulting of Florida, Sean Moriarty with All Value Network of Arizona and Wasatch Summit, LLC, doing business as Professional Marketing International and PMI Coaching of Utah.

All American Web Consulting is accused of offering phony media marketing services to help an Indiana consumer start her business. The victim was told Google would buy her 79,300 hits on her business website at 35 cents per hit. If she invested $7,000 in marketing services, All American represented she would make more than her initial investment because the number of hits would increase. The consumer paid the money upfront, but defendants failed to provide services or a refund.

· All Value Network sold web marketing services to an Indiana consumer who paid $515 upfront. Although the consumer told the company “he does not know how to use the Internet or a computer,” he was sold a “VIP Savings Network and Financial Software Package.” The company promised the consumer he would make more than his investment back in 30 days. The victim was unable to cancel the services and the promised refund was not given.

· Wasatch Summit sold coaching services to an Indiana resident to help start a business. The victim paid $6,945 upfront for media and marketing services, but the company failed to provide all the promised services or a refund.

All three companies are accused of violating the Indiana Business Opportunity Act which regulates the sale of business opportunities in the state if they require an initial investment of more than $500. The lawsuits also allege the defendants violated the Indiana Deceptive Consumer Sales Act. The Attorney General’s Office is seeking injunctions, consumer restitution, investigative costs and civil penalties.

To help protect consumers from falling victim to the business opportunity scam the Attorney General’s Office offers the following advice:
•Before soliciting or advertising the sale of a business opportunity, a seller must register and post a bond with the Indiana Attorney General’s Office. Consumers can contact the office to check if a company is registered. Legitimate sellers must use the Attorney General’s Office registration number in any advertisements;
•Be wary of investment amounts just under $500 as this is likely an indication that the seller is trying to avoid regulation;
•If you see an advertisement or receive a call about buying into a limited time business opportunity throw it away or just hang-up. If you think you might be a victim of a scam, file a complaint with the Attorney General’s Office by visiting www.indianaconsumer.com or by calling 1.800.382.5516.