A company, or as it became, a number of companies that used internet advertising to offer consumers access to government grants and the like, then started helping themselves to money via their bank and credit cards, is being charged with receiving over $275M in ill-gotten gains and has had its assets frozen.
The FTC identified the primary alleged miscreant as Jeremy Johnson, and referred to his 61 companies collectively as I Works.
The scam is to get people to accept a trial “memberships for bogus government-grant and money-making schemes.”
They would pay a shipping and handling fee with a typical charge of about $1.99, according to the FTC, but after that, whether they joined up or not, one time fees as high as $129.95 and monthly fees of $59.95 would start coming out of their checking accounts or would begin to accumulate on their credit card account.
The FTC said that over 500,000 consumers filed to get the charges reversed back to their own accounts, eventually getting the I Works company in trouble with VISA and Master card for excessive chargebacks. At this point, Johnson and his partners would simply form another shell company and go back to business as usual, according to the FTC.
A federal court is hearing the case brought by FTC. The agency said, “It placed these defendants’ assets under the control of a court-supervised receiver to help ensure that funds are available for consumer restitution when the case is concluded.”
The unauthorized access to consumer financial accounts is a crime the FTC alleges the I Works committed.
And it also nailed them on a standard false advertising complaint. “The FTC further alleges that the defendants’ websites featured deceptive positive reviews and deceptive testimonials that misrepresented the benefits of their grant services.”
RBR-TVBR observation: Internet advertising brings a whole new layer to the consumer fraud game, and as more and more broadcasters become involved selling ads specifically to go on a station’s website, it will pay to stay on top of how the medium is being abused.