The U.S. Federal Trade Commission (FTC) and the Utah Division of Consumer Protection (DCP) announced a settlement with the principals of a Utah-based real estate investment training company that involves a $15 million penalty and a permanent ban from being involved in the marketing of so-called “wealth creation” opportunities.
According to the complaint filed by the FTC and the Utah DCP, Response Marketing Group, LLC and its principals used bogus promises in selling a series of expensive real estate investment training programs to a consumer audience through infomercials and social media advertising. Consumers were encouraged to purchase three-day workshops for around $1,000 under the false claims that participants would receive access to special tools enabling them to become successful real estate investors. At the three-day workshops, Response Marketing peddled additional training programs that cost tens of thousands of dollars.
The complaint added that Response Marketing then upsold consumers by with a purported coaching program costing 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 most of the consumers who purchased Response Marketing’s products and services never became successful real estate investors and failed to recoup the money they spent on Response Marketing’s training programs.
Two of Response Marketing’s affiliates—Nudge LLC and BuyPD LLC—are also part of the settlement, along with the four individuals who the complaint alleges were the actual owners of Response Marketing: Brandon B. Lewis, Ryan C. Poelman, Phillip W. Smith, and Shawn L. Finnegan. 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 – both agreed to orders that require them to pay $1.7 million.
“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 are grateful to the Utah Division of Consumer Protection for their partnership in obtaining this strong relief, and we will continue cracking down on deceptive moneymaking opportunities and unlawful endorsement practices.”
“This is the largest consumer protection division settlement in Utah’s history and holds Nudge and its affiliates accountable for the serious financial harm to consumers across the country,” said Utah Department of Commerce Executive Director Margaret Busse. “Utah businesses that seek to take advantage of consumers should be put on notice.”
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