The Federal Trade Commission has obtained an order against companies that allegedly ran ads on Facebook and Instagram to market a bogus get-rich-quick scheme.
Digital Altitude, Aspire Processing and other related companies sold paid memberships to a program that was supposed to help consumers make extra money from home, the FTC alleged in a complaint unveiled Thursday. Some consumers paid more than $50,000 for their memberships, the FTC alleged in its complaint, filed in U.S. District Court for the Central District of California. In total, the companies allegedly raked in more than $14 million by duping consumers, according to the FTC.
On February 1, U.S. District Court Judge John Kronstadt in the Central District of California entered a temporary restraining order banning Digital Altitude and the other companies from misrepresenting their program. Kronstadt also froze the assets of the companies and their officers.
Digital Altitude and the other companies typically ran ads promising people that they could earn six figures in 90 days. The companies also posted testimonials from people who supposedly made money with the program, according to the FTC.
The program itself consists of a series of training videos, some PDF files and what was marketed as a mentorship from a coach, the FTC says.
"The videos ... are designed to convince consumers to purchase higher-tier memberships, and the 'coach' is really a salesperson for defendants, paid on commission," the FTC alleges. The agency adds that consumers only get paid when they convince additional people to sign up for memberships.
"Most consumers who join defendants’ program never make six figures, or any substantial amount of money," the agency alleges. "Defendants’ 'system' consists of little more than high-pressure sales tactics to get consumers to pay hundreds or thousands of dollars."
The FTC also says that consumers who sign up for the program are encouraged to place their own ads on social media platforms. "A substantial number of consumers have created marketing websites of their own, posted YouTube videos, and/or placed advertisements and marketing posts of their own on social media, all touting defendants’ program," the complaint alleges.