Markets Wired

A company and its owner, accused of tricking consumers into paying for an envelope-stuffing business opportunity, are banned from selling any work-at-home business opportunities again. The Federal Trade Commission alleged that they falsely promised that they would pay consumers $7 per envelope stuffed and that consumers would earn a substantial income. The operation will pay $287,500 to settle the FTC’s charges.

The FTC charged that the Walnut, California company and owner advertised the envelope stuffing opportunity through classified ads in newspapers and on the Internet. Ads claimed consumers would “make $7 for each and every envelope which you secure, stuff, and mail….” Consumers were told that for their $40 “registration fee” they would get everything they needed, and that the money would be refunded after the first 100 envelopes. However, according to court documents filed by the FTC, after sending in the fee, consumers discovered that the company did not supply envelopes or pay them for stuffing envelopes. Instead, the defendants directed consumers to start their own work-at-home envelope-stuffing scam and find other people to pay them $7, by buying their own newspaper ads similar to the ad to which they had responded.

To settle the FTC’s charges, the defendants are banned from selling work-at-home opportunities, and prohibited from making false or misleading material representations about any good or service. The court order enters a monetary judgment of $1,710,511, partially suspended based on the defendants’ sworn financial disclosure documents. The defendants will pay $287,500. The full judgment will be due if the defendants fail to pay or if they misrepresented their financial status. The court filed the order against Group C Marketing, Inc., doing business as HBG Publications, and Satinderjit Singh Chaddha, the company’s sole officer and director.

The Commission vote to authorize staff to file the stipulated final order was 5-0. The stipulated final order for permanent injunction was filed in the U.S. District Court for the Central District of California.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The FTC works for the consumer 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, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.