Recently, I agreed to a recorded phone interview with network marketing aficionado, Warren Wojnowski. Warren is the man behind the popular and informative blog Network Marketing Success Secrets. Unlike a lot of other purported experts, Warren truly is a student of the industry. After reading a few articles last month, one of which was about the history of the direct sales industry, I knew Warren was someone that shared my values for the need to preserve the integrity of the industry. The article and recording can be found here at network marketing law audio.

Personally, I prefer to download recordings and play them on iTunes. Right click this link and click “Save link as…” to save it. Enjoy.

FTC Cracks Down

See my notes below. They’re not edited, so be nice;)

Steve, conference all operator.
Press conference at the Federal Trade Commission office in D.C. Lots of chatter in the background.
Claudia: intro

David Vladeck, Director, FTC’s Bureau of Consumer Protection

Consumers are under tremendous anxiety for making ends meet. But for con artists, there’s an opportunity to exploit fears.

Promise to make a living while working from home, guaranteed jobs…

Promises them hope while driving them deeper in a hole.

Working with 14 states.

Massive coordinated crack down on scams that rip off financially strapped consumers.

Beverly Stewart, victim, will tell her story.

Federal government is committed to protect consumers.

“Seize on the economic stimulus dollars.” “Help consumers get free gov’t grant money for personal expenses.”
“Paying $ for job.”

John Beck was shut down today for his real-estate educational program. “Mentoring of America” His real estate system consisted of monthly website subscriptions for information that extracted money from victims.
“People want to believe that there is an opportunity that will guarantee financial success. There is no sure deal.”

“Best advice to anyone in an opportunity is fast no and slow yes.”

www.ftc.gov/moneymatters gives tips on how to recognize fraud and how to report them to the FTC.

Federal and state law enforcement officers are on the front line.

Tony West, Assistant Attorney General,
U.S. Department of Justice

Talks about collaboration b/w department of justice and FTC.
We’ve all heard of the opportunities that are “just too good to be true.”
Unfortunately, many opportunities are just that “too good to be true.” These schemes have caused consumers millions. Justice must be served to those who are partaking in these activities.

He oversees the office of consumer litigation. It has criminal and civil jurisdiction.

Justice can be brought to those that seek to defraud the public.

Schemes do not discriminate. They target everyone.

Many cases launched by the FTC end up as felony indictments.

Grand jury indicted individual for criminal contempt banning him from being involved in selling business opportunities again.
“If you operate an illegal biz op scheme, we will punish you if you break the law and seek to take advantage of the American public.”

Roy Cooper, Attorney General of North Carolina

People are losing everything. For a con artist, a bad economy is like a gold rush. Families often let their guard down. “A gold mine for scammers.”

We want to clamp down on con artists that get rich on other people’s misery.

They want you to pay cash up front. Con artists are clever and convincing.

Complaints are up 27% compared to a year ago.

N.C. has taken action against 19 companies.

i.e. concert promoter wanted to get up front fee before hiring.

Another company promised large income by starting online business…prospects had to pay for software.

Property investment schemes.

A victim of an employment scam

President has proposed a new consumer protection agency.

Right now, they need all hands on deck to fight fraud and protect consumers.

Education is important.

Don’t pay any money up front to someone that can cure your financial problems.

Beverly Stewart, victim

Single mother of two. She wanted a job and saw ad in Washington Post. It was for a cleaning position.

Asked to call a number, told to go online and download her certification, and gave her a bank account number for $89. She was told “we’ll get to you as soon as we can.” The website looked great, anyone would have fallen for it.

They depend heavily on consumer complaints. The FTC wants the complaints from other states.

They’re working to make the path easier for consumers.

“Get angry and do something.”

After she realized it was a scam, she called local authorities and the BBB…got no help.

The Washington Post said “we can’t control the ad.”

She called the FBI, consumer fraud, the US attorney’s office. She called the FTC. That’s when the help began.

When you take someone, even for a little bit of money, it takes a piece of their dignity.

QUESTIONS FROM THE PRESS

Can you really say that “fraud is up” during the economic downturn? Yes.

Reporter from the Detroit Press asked if Michigan was a part of the effort. Answer: No.

I asked if the network marketing industry would be more thoroughly regulated. Answer: we will not comment on ongoing investigations but we will pursue any company that seeks to exploit consumers. They are looking for scammers at large. They’re not looking to exclude any kind of scam. “We are not passing on any kind of scam that presents a danger to the American people.”