FTC Sues to Shut Down Tax Club’s $200m Scam Club

The Federal Trade Commission (“FTC”) has brought charges against the Tax Club, Inc. for defrauding consumers with home based businesses, scamming them out of more than $200 million. New York and Florida Attorney Generals and the FTC charge the defendants with violating consumer protection laws in both states in addition to violations of the FTC Act and Telemarketing Sales Rule. The scheme targets those who are interested in working at home or setting up Internet businesses, charging them thousands of dollars for small-business development services. The complaint alleges that the defendants called people, including the elderly, disabled and financially strapped, who were trying to start a home-based business. They were falsely claiming affiliation with other companies that already did business with the consumer, and sold products and services they falsely claimed were essential for the business to succeed, such as: tax return preparation and individualized tax advice, customized business planning and counseling, and business credit development services.