As alleged in a recent complaint filed by the FTC and the State of Minnesota, the marketers behind a purported money-making promotion called Sellers Playbook lured consumers into purchasing expensive business opportunities by deceptively offering them a "full-service, turnkey package" for getting their "piece of the $400 Billion Amazon Pie." The defendants, who have no affiliation with Amazon, represented that purchasers would earn thousands of dollars a month by implementing defendants' "customized system to perfect the individual's ability to sell on Amazon effectively and profitably."
However, the Complaint further alleges, defendants' earnings claims were false and unsubstantiated and the purchasers of these business opportunities were unlikely to earn the advertised income. Thus, defendants are charged with violating FTC law and the Minnesota Prevention of Consumer Fraud Act.
The complaint further alleges violations of the FTC's Business Opportunity Rule for defendants' failure to provide prospective purchasers with the requisite disclosure documents. And it charges defendants with violating the Consumer Review Fairness Act by including provisions in their form contracts intended to restrict consumers' ability to post reviews of their products and services: the contract with purchasers prohibited them from making "any oral or written public statements that are disparaging of [Sellers Playbook], [Sellers Playbook]'s products or services, or any of [Sellers Playbook] 's present or former owners, employees or independent contractors."
The court has issued a temporary restraining order against defendants with an asset freeze, the appointment of a temporary receiver, immediate access to business premises, expedited discovery, and other equitable relief.
Why is this case important to all marketers, not just those selling business opportunities? As noted in one of my earlier blog posts, as consumer reviews become a more important source of information for prospective purchasers, companies' efforts to keep them from public view will likely come under more and more scrutiny by regulators and others.
The FTC and the Minnesota Attorney General's Office allege that Sellers Playbook lured consumers into buying its expensive "system" by claiming that purchasers were likely to earn thousands of dollars per month selling products on Amazon. The company used false and unsubstantiated claims, such as make"$20,000 a month" and "Potential Net Profit: $1,287,463.38." Few, if any, consumers achieved these results, and most lost money.
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