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The Federal Trade Commission is mailing refund checks totaling more than $1.8 million to 433 consumers who were victimized by a scam that promoted video rental machines as a business opportunity. This mailing, combined with checks mailed by the FTC on two prior occasions, will increase the total funds returned to consumers by the FTC in this matter to more than $5.7 million. The funds now being returned to consumers came from the sale of property obtained by the FTC in its victory over the last remaining defendant in the case.

“People often pour everything they have into building a business, and the FTC is pleased that the scammers who deceived these investors have been held accountable to the tune of more than $5.7 million,” said Jessica Rich, Director of the agency’s Bureau of Consumer Protection. 

The FTC alleged in its case against American Entertainment Distributors, Inc., that the defendants – five companies and five individuals – deceived consumers into paying $28,000 to $37,500 apiece for video rental vending machines by telling them they could expect to earn as much as $80,000 a year. In fact, according to the FTC, the defendants had no reasonable basis for their claims and all investors lost money. 

The checks will be mailed by an administrator working for the FTC on February 13, 2014, and must be cashed on or before April 14, 2014. The amount of the refunds will vary depending on the amount lost by each consumer; more than 90 percent of the checks will be for more than $2,000. Consumers who have questions, or who have not yet filed a complaint with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-866-271-9147. The FTC never requires consumers to pay money or provide information before redress checks can be cashed. 

Consumers should carefully evaluate claims about business opportunities. For more information see: Going into Business.

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 website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.