As a fast follow from last week’s announcement from the FTC about its $150 million settlement with marketers of a fraudulent business opportunity scheme, the FTC has just announced that it, along with the Utah Division of Consumer Protection, obtained a TRO against another. This one involves a Utah-based company, Zurixx, and its executives, who, in marketing and selling real estate-related investing products and services, are alleged to have conducted a get rich quick scheme.
Reminiscent of the claims asserted in an action against The Trump Corporation and its principals (POTUS and children), the FTC’s complaint filed in the district court of Utah, alleges that the defendants made false or unsubstantiated earnings claims regarding the products they market and sell to consumers teaching them how to "flip" real estate. Defendants also represented, falsely, that little time or effort would be required for consumers to earn thousands of dollars using their system, that consumers would have access to 100% funding for their own real estate investments regardless of their credit history, and that consumers who attended defendants' multi-thousand dollar workshops would learn all they need to know about real estate investing.
Defendants allegedly enticed consumers to enroll in these programs by hosting free live teaser events that included endorsement videos of celebrities from house flipping and home renovation television programs, including Peter Souhleris and Dave Seymour from "Flipping Boston," Hilary Farr from "Love It or List It," and Tarek and Christina El Moussa from "Flip or Flop."
The defendants also purportedly aggressively “up sold” consumers, promising them that by paying for the more expensive packages of workshops and other products, they'd earn more money. Defendants also allegedly used form agreements to bar or restrict consumers from reviewing defendants’ products, a violation of the Consumer Review Fairness Act, and failed to provide consumers the information required by Utah’s Business Opportunity Disclosure Act.
Stay tuned for more about this case and perhaps more enforcement actions from the FTC and the states against other business opportunity schemes.