Who hasn’t caught an infomercial or two late at night when sleep is elusive? A friendly vibrant host touting a get rich quick scenario while you’re fretting over a mounting pile of bills soon starts to sound appealing.
However the Federal Trade Commission and the Colorado Attorney General
seem to take infomercials claims quite seriously. They recently joined
in filing a suit in Denver U.S. District Court against the Dalbey Education
Institute (formerly America’s Note Network), which is based in Westminster,
Colorado. Their concern was with the company’s 2002 to 2010 infomercial
entitled “Winning in the Cash Flow Business” that aired across
the United States and Canada. The spot featured an “Emmy award Winning
Host”, Gary Collins.
The company’s pitch is that by buying various CDs, DVDs and booklets
ranging from $39.95 to $159, one can learn how to locate and broker promissory
notes, which will quickly earn you significant amounts of money without
much effort. The complaint however, alleges that the company’s infomercials
are deceptive and misleading.
The FTC brought their complaint under the Federal Trade Commission Act
and the Telemarketing and Consumer Fraud and Abuse Prevention Act to secure
relief, restitution, and the “disgorgement of ill-gotten monies”
for deceptive practices. The State of Colorado brought their action under
the Colorado Consumer Protection Act for similar reasons.
The lawsuit contends that DEI and its principals engaged in deceptive
trade practices through an organized network of companies and knowingly
made false representations, as very few consumers ever earned money after
purchasing the advertised materials or broke into the promissory note business.
The Telemarketing Sales Rule prohibits telemarketers and sellers from
misrepresenting “[a]ny material aspects of the performance, efficacy,
nature, or central characteristics of goods or services that are the subject
of a sales offer” and from “[m]aking a false or misleading
statement to induce any person to pay for goods or services.”
The complaint asks the Court for relief by entering permanent injunctions
against Defendants to prevent future violations, award relief to consumers
as is deemed appropriate, and for reimbursement of court costs.
Denying the allegations, DEI views this as an attack on a respected local
company and intends on fighting the lawsuit.