FTC tries to halt program selling instant wealth
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FTC tries to halt program selling instant wealth

Delvinë : Albania | Jun 04, 2011 at 1:29 AM PDT
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Russell Dalbey, whose company hawked “Winning in the Cash Flow Business,” is accused by the Federal Trade Commission of defrauding consumers by claiming they could get rich on seller-financed promissory notes.

Some of those who bought into the system lost thousands of dollars, the FTC says. Colorado Attorney General John W. Suthers filed the suit jointly with the FTC because Dalbey’s operation is based in that state. They say Dalbey and others in his organization have been deceiving consumers for 15 years.

Consumers had to make an initial buy-in to the program of $40 to $159 and then were pushed to invest hundreds or thousands more in materials and seminars, the FTC says.

“ ‘Winning in the Cash Flow Business’ was a real loser for hundreds of thousands of consumers nationwide,” says David Vladeck, who heads the FTC’s Consumer Protection Bureau. “When someone is selling a program designed to help people make money, they have to accurately describe how much consumers can expect to make and be truthful about how quickly they will be able to do so. None of that happened in this case, and people who bought the program paid the price.”

Gary Collins, one-time emcee of the Miss America pageant, hosted the infomercials hawking the “Winning in the Cash Flow Business” program. The FTC says millions saw the presentations on TV. An attorney who represented Collins could not immediately be reached for comment.

The main gist of the program was to sell people on the idea of making commissions on privately held mortgages or notes. Dalbey Education, Dalbey’s company, did not respond to a request to comment on the charges.

In one of the infomercials, Collins says: “Russ Dalbey isn’t promising that he’s going to make you a millionaire tomorrow, but what he is promising is an opportunity for true financial freedom for the rest of your life working only a few hours a month. And, friends, that’s incredible and it’s exactly what Winning In The Cash Flow Business is all about.”

And then Dalbey says: “Now, the truth is anyone can make a ton of money or even become a millionaire and you don’t need money or college or even talent to do it.”

The litigation seeks a court order to halt Dalbey, his wife and their companies from continuing to make allegedly misleading claims. The FTC and Colorado also ask for refunds for consumers.

The FTC says Dalbey has primarily marketed through infomercials since 2002 and has since 1996 also used direct mail and the web.

The FTC also cited examples from supposed testimonials, including customers who said they made “$1.2 million in 30 days,” “$79,000 in a few hours,” and “$262,216 part-time.” Such claims are considered deceptive if they are not representative of the typical experience. And the FTC said those results were “far from the typical consumer experience.”

While Dalbey has claimed he has made big money “finding, listing, and brokering promissory notes,” the FTC says his main income source was selling others on the idea.

In an unusual twist, the FTC for the first time charged a consumer — who was featured in a testimonial — with making misleading claims. The FTC and Colorado Attorney General charged Marsha Kellogg with making the clam she took in nearly $80,000 from one transaction and made a total of more than $134,000. The FTC said that was exaggerated by about $50,000.

She agreed to settle the charges, the FTC says, and cooperate with law enforcement in the case.

naveedminhas is based in Islamabad, Federal Capital Area, Pakistan, and is a Stringer for Allvoices.
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