FTC Shuts Down Fraudulent Business Opportunity Scheme, Recovering Millions for Victims

The Federal Trade Commission (“FTC”) recently took decisive action to halt a deceptive business opportunity scheme that defrauded consumers in both the U.S. and Canada out of more than $6 million. This fraudulent operation preyed on individuals seeking to start a home-based business, promising them easy money by referring local merchants to a non-existent money-lending service. The case, filed in August 2013, has highlighted the growing concerns over deceptive business practices that target vulnerable consumers. The FTC’s complaint named 20 individuals and eight companies involved in the scam, which was initially marketed under the name "Money Now Funding." To evade detection and prosecution, the perpetrators regularly changed the business name, location, and even the identity of merchants, at one point renaming their company "Cash4Businesses." The scheme involved persuading consumers to pay between $299 and $499 for a business opportunity that promised they could earn up to $3,000 per month by referring small businesses to obtain loans or cash advances of around $20,000. Consumers were told that they could operate the business from the comfort of their homes and were pressured to act quickly, or the opportunity would be claimed by others. However, the reality was far from the promises made. After purchasing the opportunity, consumers were told they needed to buy leads of pre-approved businesses supposedly sourced from reputable lenders. These "leads" were, in fact, nothing more than random names and email addresses with no connection to any legitimate businesses. To make matters worse, many consumers were charged tens of thousands of dollars for these worthless lists. If you would like to read more about this case and others, visit our Case Studies Library.