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Friday, June 14, 2024

FTC Acts to Stop Online Business Coaching Scheme Lurn From Deceiving Consumers About Money-Making Potential

The Federal Trade Commission is taking action to stop Lurn, a Maryland-based online business coaching seller, from making unfounded claims that consumers can make significant income by starting an array of online businesses. The company, its CEO Anik Singal, and spokespeople Tyrone Cohen and David Kettner have agreed to court orders that will require them to stop their unlawful practices, and require Lurn and Singal to turn over $2.5 million to the FTC to be used to refund money to consumers they harmed.

“Even after receiving a Notice of Penalty Offenses, Lurn used bogus earnings claims to convince people it would teach them to make large sums of money online,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The Commission will continue to pursue aggressively those who prey on people seeking to provide for themselves and their families.”

The FTC’s complaint charges that Lurn sold various money-making programs with outlandish claims about the kinds of money consumers could make, including that they could become a “Stay-At-Home Millionaire” with one program. For another program, Lurn told consumers they could “Fail 98% of the Time & Still Be Able to Make $11,453 Per Month.” According to the complaint, the company had no information to back up these claims. The FTC alleges that defendants’ marketing claims violated the FTC Act and the agency’s Telemarketing Sales Rule.

One Lurn program, “Kindle Cashflow University,” claimed to show consumers how to make money by finding popular electronic books on Amazon’s Kindle platform and then creating near-copies of those books to sell to consumers who might be searching for the popular titles. Another program, “Email Startup Incubator,” promised consumers passive income through affiliate and email marketing.

The complaint notes that while the programs cost thousands of dollars, very few, if any consumers actually made money with the programs, despite the company’s numerous claims and supposed endorsements touting huge profits.

In addition, the FTC charges that Lurn would reach out to consumers who paid for the programs sold by the company to pitch them on additional “coaching” services that could cost as much as $10,000. Telemarketers for Lurn used a script that asked consumers about their income goals, and no matter how large of an income goal consumers said they had, the telemarketers were told to reply, “I’m 100% confident we can help you.”

The complaint charges that Lurn and Singal were aware that their actions violated the law. In October 2021, they received a Notice of Penalty Offenses from the FTC about earnings claims that listed specific acts and practices that violate the FTC Act, but even after receiving that Notice Lurn continued deceptively selling its programs. According to the complaint, thousands of consumers purchased tens of millions of dollars in programs from Lurn.

The proposed settlement orders, which were agreed to by the defendants in the case, contain several requirements, including:

  • 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 would also be prohibited from any misrepresentation in selling of any goods or services.

In addition, the orders against Lurn and Singal include provisions requiring them to:

  • Turn over funds: Lurn and Singal will be required to turn over $2.5 million to the FTC to be used to provide refunds to consumers.
  • Inform customers: Lurn and Singal will also be required to provide notice to all of the consumers who have made a purchase from the company since May 1, 2019, informing those purchasers of the FTC’s case against Lurn.

The order against Lurn and Singal contains a total monetary judgment of $14,077,121, which is partially suspended based on their inability to pay the full amount. If they are found to have lied to the FTC about their financial status, the full judgment would be immediately payable.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 3-0. The FTC filed the complaint and final order in the U.S. District Court for the District of Maryland.

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 orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter were Ben Davidson, Josh Doan, and Ryan McAuliffe of the FTC’s Bureau of Consumer Protection.

Official news published at https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-acts-stop-online-business-coaching-scheme-lurn-deceiving-consumers-about-money-making-potential

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