Markets Wired

Byron C. Peterson has agreed to settle Federal Trade Commission charges for his role in an operation that allegedly misled consumers with false earnings claims for an envelope-stuffing business opportunity.

According to the FTC, operating from Florida as “Home Business System,” Peterson and others placed classified ads throughout the nation, including in Spanish-language newspapers. They claimed that participants would earn at least $17.50 per envelope and guaranteed a weekly income of up to $1,400, but most consumers who paid a $45 “registration deposit” never heard from the company again, the FTC alleged.

A federal district court judge halted the operation in August 2007 and ordered a freeze of the defendants’ assets. Litigation continues against Peterson’s co-defendants, Integrity Marketing Team, Inc. and Min Sung Kim.

Under the proposed settlement, in connection with commerce in any goods or services, including any work-at-home opportunity, Peterson is barred from making certain misrepresentations. These include that consumers are likely to earn a substantial amount of money, the amount of sales or earnings the consumers are likely to achieve, and the amount of sales or earnings that others have achieved in the past. Peterson is also barred from misrepresenting that participants will be paid for each envelope they stuff, and the nature of any business venture offered or sold. He is further barred from any misrepresentations regarding any material term, condition, or limitation of a transaction or about the use of any offered good or service. In addition, Peterson is barred from selling, renting, or otherwise disclosing personal information about anyone who paid money to the defendants before the order is entered.

The settlement imposes a $1,280,612 judgment, which is suspended due to Peterson’s inability to pay. The full judgment will be imposed if he is found to have misrepresented his financial condition. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

The Commission vote to authorize the Department of Justice to file the stipulated final order was 4–0. It was filed in the U.S. District Court for the Southern District of Florida.

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.

Copies of the stipulated final order are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 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://www.ftc.gov/bcp/consumer.shtm.