As a result of a FTC lawsuit, a federal court has temporarily shut down the operations of an e-commerce scam that has taken more than $12M from consumers with false promises of big returns selling on Amazon and Walmart.
Since at least 2019, the scheme operated under various names including Lunar Capital Ventures, Ecom Genie, Profitable Automation, and Valiant Consultants Inc. Under each of these names, the company made bogus claims that consumers could earn huge profits after paying tens of thousands of dollars to start an e-commerce business — which never materialized — causing consumers to lose substantial amounts of money.
The operators used social media ads, websites, and marketing e-mails to tout the supposed success of their clients, claiming that some were generating upwards of $100k per month. The marketing campaigns were backed by aggressive sales tactics, with sales reps encouraging clients to use their pensions or life savings to invest in the scheme.
The FTC's complain charges that the companies' operators deceived consumers and failed to provide them with the disclosures required by the FTC's Business Opportunity Rule, which would have made clear the nature of the scheme and provided transparency to consumers about the viability of earnings claims.
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, explained in a statement:
“At a time when consumers are increasingly looking online for opportunities to supplement their income, this scheme made grand promises of guaranteed passive income. Instead, the scheme’s operators took millions of dollars, lined their own pockets, and left consumers with debt and stress. Through its actions, the FTC is holding them accountable for the significant injury they have caused.”
That's great that this particular scheme was shut down. However it's unfortunate that it took consumers losing more than $12M to reach that point. I wish that the FTC had more resources available to investigate these types of schemes earlier on, before as many consumers are affected.