Ftc Launches Assault On Get-Rich-Quick Schemes Operation Missed Fortune Takes Aim At Golden Opportunities That Bomb
A crackdown on get-rich-quick schemes, codenamed “Operation Missed Fortune,” has resulted in 75 enforcement actions in 25 states, the Federal Trade Commission said Wednesday.
The variety of fleecing operations is staggering: a sports card broker, espresso coffee bars in supermarkets, a pyramid plan “to help needy children,” display racks for toys.
One man paid $11,500 for five coin-operated telephones on a promise of $200 a month income from each. He lost money instead.
The list also includes an offer for “business opportunities to sell advertising space on directory boards placed in hotel lobbies.” Cost to the investor: $30,000 for three boards.
Another promised consumers they could use their home computers to earn up to $23,000 a year working only 28 minutes a day processing insurance claims for doctors.
“The cases we are announcing today … share common characteristics: They all promise easy money,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. “Whether they are modest little frauds that charge small up-front fees or sophisticated scams that bilk consumers out of tens of thousands, they all claim to be proven opportunities and sure bets.”
Mark J. Griffin, president of North American Securities Administrators Association, described a Baltimore advertisement for a seminar “where it would be explained how one could make in excess of $200,000 a year restocking stores with Coca-Cola, Disney, and Warner Bros. products.”
All that was required, he said, was an up-front investment of $17,500 to $53,000. The operation was shut down by the Maryland Securities Division before anyone was hurt.
“Unfortunately, too often people are hurt,” Griffin said. “Such as the Madison, Wis., couple who were conned into believing they could make $97,000 a year selling water purification equipment.”
All 75 cases involved civil, not criminal, enforcement actions such as cease-and-desist orders.
Robert M. Burke Jr., of Bergen County, N.J., told a news conference of buying the five coin-operated telephones and paying $8,800 for them, plus $2,750 to have them installed.
“I lost money each and every month that my phones were in place,” he said. One phone lost $83.60 in one month. The best performance, he said, was a $59.49 profit one month.
Steve Bellissimo, 42, of New York City, answered a small ad for a business selling physician-ordered hospital beds, wheelchairs and the like to Medicare patients. The startup cost was $54,000, including a $25,000 fee to the franchiser.
“We never turned a profit,” Bellissimo said.
Law enforcement actions were taken in these states: Arizona, California, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah and Washington.