Markets Wired

At the request of the Federal Trade Commission, a U.S. district court has temporarily halted an envelope-stuffing operation that allegedly scammed cash-strapped consumers by falsely promising they could make substantial income working from home.

As part of ongoing efforts to protect Americans who are struggling to cope with the economic downturn, the FTC charged that Louis Salatto and his company, Global U.S. Resources, deceived consumers into paying up-front fees by making phony promises about the earning potential of their envelope-stuffing operation.

According to the FTC’s complaint, Salatto bought classified ads in local pennysavers and community newspapers that promised weekly earnings ranging from $1,200 to $4,400.  Consumers who paid the up-front fee did not receive the materials they needed to do the envelope stuffing, nor the income promised, nor the refund that Salatto said they could get upon request.

The court order halts the allegedly illegal tactics of Salatto and Global U.S. Resources and freezes their assets while the FTC moves forward with its case seeking a permanent prohibition against the defendants’ false and deceptive claims.

Since at least 2005, Salatto has advertised nationwide through large classified advertising networks such as Gateway Media Inc. and National Advertising Network Inc., according to the FTC complaint.  Ads in pennysavers and community papers stated “No Experience Necessary! Start Immediately!”  They provided a toll-free number at which consumers were instructed to leave a message with their contact information.  Consumers who responded to these ads received a “registration form” that typically stated they would receive $8 for every brochure they stuffed, plus 25 percent of every sale made as a result of their mailing, the complaint alleged.  They were instructed to pay a “refundable” fee – typically $40 – by cash, check, or money order.

After paying the fee, consumers typically received either nothing or a pamphlet titled “Secret Home Employment Guide,” which listed other bogus work-at-home opportunities and provided instructions on how to market them, the FTC complaint stated.  Consumers who requested refunds were typically unable to reach anyone, and could only obtain the refunds by submitting a complaint to a Better Business Bureau or law enforcement agency.

The FTC acknowledges the assistance of the U.S. Attorney’s Office for the District of Connecticut, the United States Postal Inspection Services, the Office of Attorney General in Connecticut, and the Better Business Bureau serving Connecticut.

The Commission vote authorizing the staff to file the FTC complaint and seek a temporary restraining order was 4-1, with Commissioner J. Thomas Rosch voting no.  The FTC filed its complaint and requested a temporary restraining order against the defendants from the U.S. District Court for the District of Connecticut.  On September 13, 2010, the court granted the request for the temporary restraining order.

NOTE:  The Commission files a complaint when it has reason to believe that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.

(Salatto NR.wpd)
(FTC File No. 1023162)