3 Diamonds and a Dog #5

May 9, 2012 by

In each post of the Money Counselor “Diamonds & Dogs” series, I pick three items—could be an article, a website, a video, an image—that in my humble opinion would be especially valuable—the Diamonds—in helping Money Counselor readers make better money choices. And to balance the three Diamonds, I pick just one lame item—the Dog.

3 DiamondsThree Diamonds

A Dog

Free & Clear Real Estate System scam

Look familiar?

“John Beck’s Free & Clear Real Estate System” and its companion scams “John Alexander’s Real Estate Riches in 14 Days” and “Jeff Paul’s Shortcuts to Internet Millions” are the biggest Dogs I’ve heard of in the last little while. Last week the Federal Trade Commission won a court judgment against the marketers of these schemes, which deceived nearly a million consumers. According to an FTC media release, “The court found that the infomercials misled consumers in violation of the FTC Act, and that despite the marketers’ easy-money claims for the systems, which cost $39.95 each, nearly all the consumers who bought them lost money.

In my book, not much is worse than preying on people who likely are desperate, poorly educated, infirm, or otherwise vulnerable. Watch a few hours of late night TV and you’ll get a belly full of sleazy John Beck-like pitchmen (they’re usually male) doing their darndest to rip people off. It’s truly an appalling spectacle.

The FTC is seeking more than $450 million in monetary relief from these defendants. Let’s hope that cash somehow is funneled back to the victims. Here are more details about the scam from the FTC:

“Regarding the John Beck system, the court found that the defendants falsely represented that consumers could purchase homes at tax sales in their own area for pennies on the dollar and that they could make money easily with little financial investment. The court found that the earnings claims in the John Alexander infomercial were false, and that the Jeff Paul infomercial misled consumers by creating an overall impression that “a typical consumer can easily, quickly, and ‘magically’ earn thousands of dollars per week simply by purchasing and using” the system. In contrast to the infomercials’ easy-money claims, the court found that less than one percent of consumers who purchased the systems made any profit whatsoever.”

John Beck, Scam Artist

“John Beck,” alleged scam master

“Consumers who purchased the systems were automatically enrolled in continuity programs that charged recurring fees and cost an extra $39.95 per month. The court found that the defendants failed to adequately disclose that consumers who purchased the systems would be enrolled in the continuity plans and submitted consumers’ payment information without their express informed consent, in violation of the FTC Act and the Telemarketing Sales Rule (TSR).”

 

Nominations Please

Do you have a nomination for a Diamond or Dog? Send it to me please using the Free Advice link at the top of the page. I’ll give you credit if I use it in a “3 Diamonds and a Dog” post.

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