What is New in Greeting Cards?
Scammer Says Goodbye to False Claims about Greeting Card Business Opportunity
Not much, according to the FTC Press Release, "A businessman has settled Federal Trade Commission charges that he sold his greeting card display rack business opportunities by misrepresenting the potential earnings that consumers could make. The FTC also alleged he did not provide any disclosure documents to purchasers, as required. The settlement bars the businessman from making false earnings claims, using shills, and misrepresenting the profitability of secured locations in the future, and prohibits him from violating the Franchise Rule or Business Opportunity Rule.
Thomas E. Richardson, the man behind Mid-South Distributors, advertised his greeting card display rack business opportunities in classified ads in local newspapers, claiming that purchasers could earn as much as $65,000 a year. Based in Florence, Alabama, he sold distributorships in Georgia, Alabama, Tennessee, Mississippi, Florida, and Kentucky. Richardson promised potential purchasers that for an investment of $8,500 or more, they would receive everything they needed to start a business: an initial inventory of greeting cards, display racks for the cards, and profitable locations where he would supposedly place the cards and racks for the purchaser.
According to the FTC, consumers never earned anything close to the income levels they were promised. The Commission alleged that in almost every case, consumers made less than $100 per month. The highest earning purchaser only returned $2,006 for the entire year by investing in 20 locations. In addition, Richardson often did not provide his customers with the promised number of locations for their display racks. Typically, the locations he did provide were not in high traffic areas, and resulted in few greeting card sales for the consumers. Also, the FTC accused Richardson of not providing any of the disclosures that are required by the Franchise Rule."
These are the standard elements of a business opportunity fraud, the only thing a bit unusual is that Richardson was still using the classified ads. We see a lot more use of the internet, list brokering, and trade show attendance these days -the use of biz ops in the classifieds seems to be disappearing.
