FTC Bans Prominent Marketer of Business Opportunities

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dollar_sign1The Federal Trade Commission (FTC) has banned work-at-home marketer Christopher Andrew Sterling from marketing and selling his prominent business opportunity software, which promised consumers the prospect of staying at home, making their own schedule and making thousands of dollars in income.  In addition to the bar on Sterling’s future activities, a $70,000 judgment was imposed for his violations of the FTC’s amended Business Opportunities Rule.

Business Opportunities Crackdown

In recent years, the FTC has engaged in a program that it calls “Operation Lost Opportunity,” the aim of which is to crackdown on increasingly prevalent advertisements targeted at underemployed and/or unemployed individuals.  The FTC has brought several actions against marketers under its recently updated Business Opportunity Rule, which requires business opportunity sellers to provide specific information to help consumers evaluate a business opportunity. The purpose behind the rule is to protect consumers from making bad investment and business decisions stemming from the declining economic conditions around the country.

Specifics of Sterling’s Business Opportunities Case

Sterling was conducting business through the use of the following websites: rebatedataprocessor.com, sterlingvisa.com and creditcardworker.com.  Through these websites he was marketing business opportunities to underemployed and/or unemployed consumers.  Specifically, Sterling claimed that consumers could work from home and earn up to $1,000 per day by creating Internet ads for credit card offers, which would generate income for consumers if other end-users saw their ad and made a purchase.  According to the FTC’s complaint, Sterling promised that, for a minimum fee of nearly $50, he would provide customers to view the consumer’s ads and make applicable purchases.  However, the only service, if any, that Sterling provided to consumers was generalized information on how to create the work-from-homeads.

By way of example, one of Sterling’s websites stated, “Rebate Processing Jobs – You Can Process Simple Customer Rebates from Home and Earn $15 each GUARANTEED!”  Sterling’s claims also included a statement that people could earn “$15,526 in 29 days” when few, if any, consumers were likely to make that level of income due to the highly complicated and competitive nature of the affiliate marketing business, none of which was disclosed to consumers.

In a stipulated final judgment and order entered in the U.S. District Court of the Southern District of California on July 22, 2013, Sterling agreed not to: 1) sell any further business opportunities; 2) misrepresent material facts about any products and services; or 3) otherwise benefit from his consumers’ personal information.  In addition, a monetary judgment of $69,289.00 was imposed, which was suspended due to Sterling’s inability to pay.  However, should it ever be found that Sterling misrepresented his income, an “avalanche clause” will be triggered and the entire judgment will immediately become due.

If you are interested in learning more about this topic, or need to review your marketing practices based on the FTC’s amended Business Opportunities Rule, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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