The FTC's shutdown of a bogus envelope stuffing scam
The FTC has announced "a set of final judgments and orders settling charges against two Florida-based principals and the corporations they ran for misleading consumers into believing they could earn up to $3,000 per week stuffing envelopes at home." It is useful to compare the sanctions and redress that the FTC obtained with the recent Ohio case, the Josic case. In the later case, Ohio was able to recover approximately $750,000 in assets from a scam which they believed took in around $2 million from consumers. The individuals will serve jail time, which may be up to four years. The FTC, on the other hand obtained orders which, "contain monetary provisions, imposing a $2,058,027.41 judgment against the defendants, which represents the estimated amount of consumer injury caused by their scam. The judgment has been suspended, based on their inability to pay. Defendant Marte, however, will give up approximately $1,300 in frozen assets as part of the settlement. The judgments and orders also contain record-keeping and reporting provisions to ensure the defendants comply with their terms". (my emphasis.)
This is what I personally find disturbing about the FTC's new Business Opportunity Rule. It signals that the Federal entity intends to pre-empt the local State entities with respect to a large amount of scams and frauds, but their own track record in collecting and returning money to consumers is not that impressive. As I pointed out, in the FTC's last annual report they have not done an impressive job of returning funds to consumers.
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