FTC cracks down on get-rich scams

July 02, 2009|Associated Press

WASHINGTON - The economic downturn appears to be bringing out the worst in some people. The Federal Trade Commission announced a major crackdown yesterday on scammers trying to take advantage of people worried about the tough economy by promising jobs that don’t exist, get-rich-quick schemes, debt-reduction scams, and other phony services.

The biggest case involved a California company called Family Products that marketed alleged get-rich schemes such as “John Beck’s Free & Clear Real Estate System.’’

The FTC says the company made bogus claims through DVDs, brochures, and national infomercials about the ability to raise cash fast.

In all, more than 600,000 people were duped out of about $300 million, said the agency.

The law enforcement sweep dubbed “Operation Short Change’’ was announced jointly with the Justice Department. The operation included 15 cases from the FTC, and dozens of additional cases brought by Justice and at least 13 states.

These scams, said David Vladeck, head of the commission’s consumer protection bureau, “raise people’s hopes and then drive them deeper into a hole.’’

North Carolina Attorney General Roy Cooper said complaints to his office about these kinds of scams are up 27 percent.

“In the down economy,’’ said Cooper, “the scam artists crawl out from under rocks.’’

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