But mentor group thanked by ERSP for positive steps on disclosure
High-Five
Clever Investor, a real estate investment mentoring and education company, boasts a rather intense website. A video banner on the site's front page sports seminar participants high-fiving each other in a large conference room; brusque and charismatic speakers deploying emphatic gestures to pump their crowds; and most important, students – students rapt with attention, students staring at monitors with furrowed brows, students in the field – all soaking up the wisdom that the Clever Investor programs have to offer.
Along with these inspirational images, the site makes a number of claims regarding its products, which include training programs like "Quick Flips For Big Profits" and "Fast-Track Profit System." Consider the following case studies:
"18 year old Hunter teams up with his brother to make real estate a family business . . . Their systems are foolproof and the flow charts eliminated a huge learning curve for us."
"Michelle is on pace to do $350k this year & has a goal of 1.2 million next year! . . . Within a few months I had achieved a six-figure income."
"Sean talks about how (sic) he's making 'stupid easy' money in real estate."
Slow down, says Electronic Retailing Self-Regulation Program. ERSP reviewed Clever Investor's marketing based on an anonymous challenge, and expressed some important reservations.
After checking out the claims made by the company over email and online advertising, ERSP staff recommended that "unqualified earnings claims...including consumer testimonials, success stories, and representations regarding the success of [a] company spokesperson" be discontinued. Additionally, ERSP told Clever Investor to cease making claims that might lead consumers to believe that its programs promised easy money, or a risk-free experience.
The Takeaway
In an unusual development, ERSP noted its appreciation for Clever Investor's cooperative response. The mentoring company informed ERSP at the outset of the investigation that it was conducting routine surveys measuring participant success, and was creating a new earnings disclosure based on them.
"ERSP appreciated the marketer's willingness to conduct surveys...and voluntarily [include] the results in a comprehensive disclosure."
In one last tweak, ERSP staff asked Clever Investor to include this new disclosure conspicuously alongside all testimonials and earnings claims.
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