The FTC and Due Diligence for Business Opportunities
It is worthwhile to review this document to see what the FTC thinks can be done to avoid business opportunities scams and frauds. (The complete document is available here.)
The report states:
"The FTC pursues a vigorous law enforcement program that combats a wide range of fraudulent and deceptive practices. From April 2005, through February 2006, the FTC filed 60 actions in federal district court and obtained 66 judgments ordering defendants to pay $590 million in redress to consumers. In many of these cases, the FTC worked with local, state, federal, and international law enforcement partners. " (my emphasis)
What is ironic about this statement, given that it is the FTC's job to "combat deceptive practices"?
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Judgments can be little more than pieces of paper. How much money was actually returned to consumers?
The annual report does not say. Here is one example worth considering:
"In January 2006, the FTC settled its action against Andris Pukke, the founder of defendants AmeriDebt and DebtWorks, and the other remaining defendants. The FTC settlements shut down the corporate defendants,
permanently banned Pukke from the credit counseling business, and imposed a $172 million suspended judgment. In addition, Pukke agreed to relinquish virtually all of his assets for consumer redress, a fund that could ultimately total $35 million. "
So between 18 and 20 cents on the dollar may be returned to consumers in the Debtworks scam. The ETS Payphones scam restitution was less than 5 cents on the dollar. How much money did the FTC actually return to consumers? If the FTC cannot collect on its judgments, should they contract out the execution phase of litigation? Shouldn't they at least tell the public clearly how much money didn't get returned?
Technorati Tags: ftc, deceptive practices, law enforcement program, international law enforcement, annual report, judgments, consumers, federal district court, state federal, report states, section spring, frauds, redress, combats, antitrust, vigorous, scams, aba
