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Proposed orders require $1 million for refunds, bar further bogus earnings claims,
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The Federal Trade Commission has obtained proposed orders against the operators of a wide-ranging scheme known as “The Sales Mentor” that made millions by falsely promising consumers that they could make big money from telemarketing sales.
The defendants have agreed to proposed court orders that would require them to pay a total of $1 million for consumer refunds.
In a federal court complaint, the FTC charged the Tennessee-based group of companies, their owners, their officers, and a former sales director with deceiving consumers to pay hundreds or even thousands of dollars for supposed telemarketing training programs that rarely, if ever, delivered on what was promised. In addition, the FTC said the companies continued to make deceptive earnings claims even after they received the FTC’s Notices of Penalty Offenses on money-making opportunities and on endorsements and testimonials warning them that such conduct is illegal.
“Traffic and Funnels lured people looking to work and earn an income with false or unfounded earnings claims, even after receiving legal notices from the FTC about the illegality of such conduct,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to crack down on deceptive earnings claims that cheat consumers.”
In its complaint, the FTC charged that the companies, their owners Taylor Welch and Christopher Evans, and employees Payton Welch and Ashton Shanks falsely told consumers that The Sales Mentor program for the “high demand” field of telemarketing sales could net them incomes of $10,000 to $20,000 per month on average. In their ads, online videos and other sales pitches, the defendants made false claims that they had successfully “helped over 25,000 people find secure, dependable, consistent and life-changing incomes,” according to the complaint.
Another advertisement claimed that “…it’s virtually IMPOSSIBLE NOT to enjoy a job-replacing six-figure income, even part-time.”
The defendants also falsely claimed, according to the complaint, to have access to a “waiting list” of companies looking to hire consumers who completed their program, when often all they had available was an outdated list of job openings.
The various Sales Mentor “packages” ranged in price from $97 to more than $9,000, according to the complaint. Consumers complained that the supposed private mentoring at higher levels was never made available, and that in many cases the higher levels received the same online video series that could be purchased at lower costs.
According to the complaint, consumers paid more than $29 million to the defendants when the scheme was active between 2018 and 2022. During that time, one of the corporate defendants in 2021 received the FTC’s Notice of Penalty Offenses relating to earnings claims and endorsements. The complaint charges that the defendants violated the FTC Act and the Telemarketing Sales Rule and engaged in illegal practices described in the Notices they received.
There are two proposed court orders, which were agreed to by the defendants to settle the case: one against Evans and the other against the Welches; Shanks; Evans and Welch, Inc.; WE Capital, LLC; Traffic and Funnels, LLC; and Evans and Welch Holdings, LLC. Both orders include:
- Prohibition on deceptive earnings claims: Each of the defendants will be prohibited from making earnings claims that are misleading or unsubstantiated.
- Prohibition on deceiving consumers: The defendants will be prohibited from any misrepresentation in selling of any goods or services.
- Turn over money: The orders will require Taylor Welch to turn over $600,000 and Evans to turn over $400,000 to the FTC to be used to provide refunds to consumers harmed by the scheme.
The orders contain a total monetary judgment of $16,363,073.11 against all of the defendants except Shanks, which is largely suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.
The Commission vote authorizing the staff to file the complaint and stipulated final orders was 3-0. The FTC filed the complaint and final orders in the U.S. District Court for the Middle District of Tennessee.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.
The staff attorneys on this matter are Virginia Rosa and Frances Kern of the FTC’s Bureau of Consumer Protection.
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The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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