FTC Opens All Out Assault on Economic Cyber-Scammers

Network World — The Federal Trade Commission today announced a wide-ranging attack on cyber-vultures looking to feast on the current moribund economic situation.

Dubbed “Operation Short Change,” the law enforcement sweep announced today includes 15 FTC cases, 44 law enforcement actions by the Department of Justice, and actions by at least 13 states against those looking to bilk consumers through a variety of schemes, such as promising non-existent jobs; promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; or putting unauthorized charges on consumers’ credit or debit cards.

“Thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection during a press conference today. “Their scams may promise job placement, access to free government grant money, or the chance to work at home. In fact, the scams have one thing in common--they raise people’s hopes and then drive them deeper into a hole.”

At the heart of Operation Short Change, are new FTC cases against companies the agency says have conned consumers out of millions of dollars. In each case, the FTC alleged that the defendants’ practices were deceptive or unfair and/or made illegal electronic funds transfers or violating the Telemarketing Sales Rule.

In the law enforcement actions include:

-John Beck/Mentoring of America, two principals, and three purported “inventors” marketed three get-rich-quick schemes, duping hundreds of thousands of consumers into paying approximately $300 million. The defendants marketed “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.” The defendants allegedly made false and unsubstantiated claims about potential earnings for users of these systems. They used frequently aired infomercials to sell the systems for $39.95 and then contacted the purchasers via telemarketing to offer “personal coaching services,” which cost several thousand dollars and purportedly would enhance their ability to earn money quickly and easily using the systems. Some consumers also continued receiving unwanted sales calls after they told the defendants’ telemarketers to stop calling.

-Wagner Ramos Borges, through a host of front companies, including “Job Safety USA,” allegedly systematically targeted people seeking maintenance and cleaning work. Luring job seekers with print and online classified advertisements in newspapers throughout the country, Borges allegedly tricked them into paying $98 for a worthless and needless credential called a "certificate registration number" supposedly so that the consumers could get maintenance or cleaning jobs–jobs that Borges did not provide.

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