FTC Stuffs Another Online Scam
Defendant agrees to sell his house and auto as part of consumer redress in online envelope-stuffing scheme.
The Federal Trade Commission (FTC) has banned Darrell Richmond, a South Carolina resident, from engaging in work-at-home opportunities or business ventures as part of a settlement with the FTC. Richmond, using various company names, deceptively marketed his envelope stuffing business opportunity to consumers over the Internet.
Under the terms of the settlement, Richmond has to pay as consumer redress all proceeds from the sale of his assets, including the sale of his house and automobile, and to return all uncashed checks to consumers within 20 days after entry of the order. The settlement also contains an “avalanche clause” whereby Richmond would be liable for $782,668.77 if it is found that he made false statements in his financial disclosures.
Finally, the settlement contains various recordkeeping requirements to assist the FTC in monitoring Richmond’s compliance with the deal.
The FTC claims that Richmond misrepresented that he would provide all necessary materials to perform the work-at-home envelope stuffing business opportunity, and misrepresented earnings claims. In addition to the ban, the settlement announced Thursday prohibits Richmond from misrepresenting earnings claims, costs, and the type of assistance he will provide in connection with the sale of any good or service.
In November of last year, the FTC filed a complaint in federal district court alleging that Richmond promoted his business opportunity using the names Bargain Shoppers Network Direct!, BSN Direct!, Speciality Merchandising Wholesale Direct!, SMW Direct! and Apex Direct Marketing Group, and Apex Enterprises, and on the Internet at: www.bsndirect.com, www.homemailerteam.com, and www.homemailergroup.com.
The complaint alleged that Richmond advertised that “home mailers” were needed to stuff envelopes with circulars which allegedly advertised a wholesale and retail line of approximately 3,500 giftware and collectible items. Richmond allegedly offered to pay consumers $2 per envelope stuffed, stating that consumers could earn between $100 to $1,000 or more per week. He also promised that he would provide all the necessary materials to consumers at his own expense.
The proposed settlement bans Richmond from any work-at-home related sales activity, and prohibits him from misrepresenting, in connection with the sale of any good or service: the earnings claims likely to be achieved, or actually achieved; the type of assistance he will provide to enable the consumer to achieve the represented earnings; the amount of time a person would need to expend in order to achieve the represented earnings; the guarantee; and the existence of any pending orders for goods or services.
The settlement also prohibits Richmond from selling his customer lists.
