The Federal Trade Commission is suing the makers of a late night “get rich quick” infomercial. The company behind the “Winning in the Cash Flow Business” series of infomercials has been sued by the FTC for defrauding consumers. If something sounds too good to be true, it usually is.
Promissory notes promised nothing but losses
The group of investors behind the infomercial series “Winning in the Cash Flow Business” is being sued by the Federal Trade Commission and the state of Colorado for defrauding customers, according to Reuters. The strategy behind the infomercials is to induce customers into paying an upfront fee of $40 to learn how to get rich by brokering promissory notes. Customers then pay more for seminars and further materials. A promissory note is a type of financial agreement issued by a loan lender. The borrower signs the promissory note and legally pledges to repay the loan by a certain date, whether it’s a personal loan or a mortgage, etc.. The company promised to teach people to find, sell and broker promissory notes and gain “financial freedom.”
Real estate may not be ticket to wealth
The infomercials, which have been airing since 2002, at one point featured actor Gary Coleman. The FTC and Colorado are setting a precedent by also suing one of the people giving a testimonial for misleading consumers about the “Winning in the Cash Flow Business” strategies. Numerous other infomercials give advice about gaining “financial freedom,” and many of them are swindles. For instance, a Florida based company called Vacation Property Services, Inc., is also being sued for advertising “time share resales” that promise finding a buyer for a person’s time share vacation unit quickly, according to WalletPop. Customers would pay an advance fee of several hundred to several thousand dollars only to attract no buyers. Real estate agents, who actually do sell houses, are paid on commission, and any company that promises to make a person wealthy through real estate for an upfront fee is likely up to no good.
Stick to what works
Some people do figure out miraculous, easy ways to do things, and some do get lucky with money. However, conventional wisdom is conventional for a reason. Beware of anything that says “get rich quick.” Consider the case of Roni Deutch, the “Tax Lady.” She told people for years that she knew how to save them a lot of money that would otherwise be paid to Uncle Sam, and who doesn’t want to pay less in taxes? However, she is now, according to the Bellingham Herald, millions in debt, being sued for fraud, has a tax lien against her of nearly $200,000 and surrendered her license to the California bar.