If you’ve ever been tempted by a work-at-home-make-zillions ad, forget it.
A federal court in central California has hit one of those companies with a fine of $25.4 million for making false claims.
The U.S. District Court for the Central District of California said that 99.8 percent of the 110,000 people who had responded to ads from the Zaken Corp. received no money for their efforts. That company’s QuickSell program offered excess inventory for sale and said it would help find buyers. Consumers signing on could earn a minimum of $4,000 in the first 30 days, according to the company.
Participation cost a fee of at least $148. But consumers who bit only received more pitches from Zaken for costly business tools costing hundreds or thousands more. The additional tools offered only out-of-date phone numbers for companies who might buy the inventory.
Today’s decision said that “undisputed facts show that Defendants have made earnings claims to prospective purchasers” while “lacking a reasonable basis” or offering required disclosures. “No material facts are in dispute,” the court said.
The fine will be deposited into a FTC-administered fund that is intended for “redress to consumers and any attendant expenses for the administration” of the fund. If the consumers can’t be found, the court said, the funds will be used for other relief, such as providing consumer information.
The judgment was in response to a motion from the Federal Trade Commission (FTC) for a summary judgment. The case was originally brought by the U.S. Department of Justice in 2012 on behalf of the FTC, as part of its effort to stop such scams.
In mid-September, the federal court issued a permanent ban against the defendants from continuing this line of work, and the fine was initially entered into the record. The final order was issued Tuesday and released today.