Making money is something everyone wants to do but unfortunately, it's not as easy as it sounds. Just ask anybody who has ever shelled out good money to buy some plan, program or franchise that is just bound to make them scads of loot in their spare time.
One of the latest examples is a Utah-based real estate investment training company that will pay $15 million and be banned from selling money-making opportunities under a court order they have agreed to. In addition, two of the primary real estate celebrities who endorsed the training have agreed to orders that require them to pay $1.7 million.
According to the complaint filed by the Federal Trade Commission and the state of Utah against Response Marketing Group, LLC and its principals, the group known as Response Marketing used false promises to sell consumers a series of expensive real estate investment training programs.
The complaint also named two real estate celebrities as defendants – Scott Yancey, who was the star of the home-flipping show Flipping Vegas on A&E, and Dean R. Graziosi, the author of Millionaire Success Habits.
Yancey and Graziosi promoted the training programs and were involved in efforts to bury online customer complaints that said Response Marketing failed to deliver on its promises or was a scam.
“Today’s order against Response Marketing and its owners permanently bans them from the wealth creation business and returns $15 million to consumers, on top of the $1.7 million already secured through this litigation,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. "We will continue cracking down on deceptive moneymaking opportunities and unlawful endorsement practices.”
Infomercials, social media
Response Marketing attracted consumers to free events around the country through infomercials and social media advertisements in which real estate celebrities promised to share their investing techniques.
At these events, Response Marketing enticed consumers to purchase three-day workshops for around $1,000 by falsely representing that it would provide consumers with access to special tools that would enable them to become successful real estate investors. At the three-day workshops, Response Marketing deceptively pitched additional training programs that cost tens of thousands of dollars, according to the complaint.
Response Marketing then upsold consumers by pitching a purported coaching program through telemarketing that could cost as much as an additional $30,000. The program was marketed as exclusive “Inner Circle” training that supposedly had limited spots and would allow consumers to work one-on-one with a purported real estate expert.
The complaint alleged that the vast majority of consumers who purchased Response Marketing’s products and services did not become successful real estate investors and did not even recoup the money they spent on Response Marketing’s training programs.
Response Marketing sold its training programs under a variety of names, including Affluence Edu, Cash Flow Edu, Flip for Life, OnWealth, Renovate to Rent, and Visionary Events.
The company’s predecessor began selling real estate investment training packages in the early 2010s. In December 2019, Response Marketing agreed to stop selling these packages following the filing of the initial complaint in this case by the FTC and the Utah DCP.