The Cost of Deception and How the FTC’s Settlement With FHTM Sends a Strong Message to Businesses

The Federal Trade Commission (“FTC”) and state attorneys general recently concluded a major settlement with the operators of Fortune Hi-Tech Marketing (“FHTM”), a Kentucky-based pyramid scheme that deceived over 350,000 consumers across the United States, Puerto Rico, and Canada. The settlement, which bans the operators from engaging in multi-level marketing (MLM) practices, also mandates that they surrender assets totaling at least $7.75 million to be returned to consumers. This outcome serves as a significant reminder to businesses about the importance of ethical practices, transparency, and the consequences of violating consumer trust. FHTM’s pyramid scheme, which operated from 2009 to 2013, falsely promised participants that they could achieve substantial income by selling products and services from companies like Dish Network and various telecommunications providers. However, as investigations revealed, the real business of FHTM was not about selling legitimate products but rather about recruiting new members into the system. Participants were required to pay hefty start-up costs and monthly fees to remain in the program, with minimal opportunity to recoup those costs through product sales. The findings were striking: more than 98 percent of participants lost money, with at least 88 percent failing to recover their initial enrollment fees. In fact, the vast majority of the income that participants earned came not from selling products but from recruiting new members into the scheme. Over 80 percent of payments made to participants were tied to recruitment activities, not product sales. These revelations confirmed that FHTM's practices were deceptive and exploitative, targeting vulnerable communities, including Spanish-speaking and immigrant populations. If you would like to read more about this case and others, visit our Case Studies Library.