Markets Wired

In response to charges by the Federal Trade Commission and four state attorneys general, a U.S. district court has ordered a defendant who assisted in a wide-ranging government grant scheme to pay $1.68 million, and has banned her from marketing money-making opportunities to consumers.

Under the federal court order, Meggie Chapman is ordered to pay a $1.68 million judgment to provide refunds to defrauded consumers. Chapman is also banned from future violations of the FTC’s Telemarketing Sales Rule. The FTC estimates that more than 8,000 consumers were affected by the Grant Writers scam.

As part of the agency’s ongoing crackdown on scams that target American consumers in financial distress, the FTC, along with the Attorneys General of Kansas, Minnesota, North Carolina, and Illinois, charged Chapman with assisting and facilitating the deceptive acts of Grant Writers Institute, LLC and several related entities, which allegedly falsely told consumers they were eligible for grants from the federal government.

According to the FTC, Chapman, who also did business as Meggie Chapman & Associates, provided telemarketing support for Grant Writers’ products and services, and “knew or consciously avoided knowing” about the misrepresentations being made. The FTC and the states alleged that the defendants’ false and deceptive claims violated federal law, state consumer protection laws, and the FTC’s Telemarketing Sales Rule.

Since at least 2007, according to the agency, Grant Writers made its phony pitch using postcards that it mass-mailed to consumers across the country. Consumers were told they were guaranteed $25,000 in free government grant money, and those who called a phone number on the card were pitched a $59 book on “professional” grant writing. The defendants then called consumers who bought the book trying to get them to pay hundreds of dollars or more for grant research, writing, or coaching services, falsely claiming a 70 percent success rate in securing grant funding.

The final court order against Chapman also prohibits her from misrepresenting information about any products or services being offered for sale, failing to disclose information that is material to a consumer’s decision to make a purchase, and making any false or misleading statement in an attempt to induce anyone into buying a product or service.

The order also prohibits Chapman from misrepresenting any aspect of a refund, cancellation, or exchange program; the total cost of buying goods or services; any information related to offers with a “negative option” billing feature; and any aspect of a product’s performance or effectiveness. She also is required to have competent and reliable evidence to substantiate any representations she makes.

The final order against Chapman was entered in the U.S. District Court for the District of Kansas after an August 2011 trial. The FTC appreciates the invaluable assistance of the offices of the Attorneys General of Illinois, Minnesota, Kansas, and North Carolina, and the office of the United States Attorney for the District of Kansas.

Earlier, all the other defendants in the case either agreed to settlement orders or had default or summary judgment orders entered against them. The orders bar them from the alleged deceptive conduct, ban some of them from certain types of marketing, and impose monetary judgments requiring them to pay substantial sums in consumer restitution or disgorgement.

Copies of the final judgment order can be found on the FTC’s website and as a link to this press release. 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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. X090073; Civ. No. 5:09-cv-04104-JAR-KGS)
(Chapman.final)