An international business education scheme that promised customers they could make six-figures at home by signing up will pay the US Federal Trade Commission (FTC) $17 million to settle claims of scamming and misleading consumers.
On Thursday, the regulator said that My Online Business Education (MOBE), a company registered in Malaysia and founded by Matthew Lloyd McPhee, an Australian national, "swindled hundreds of millions of dollars" from consumers.
MOBE used online advertising and social media to promote a coaching program that promised to teach users how to become successful business entrepreneurs.
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According to the FTC, MOBE targeted US consumers and generated millions of dollars, further supplemented by charging users thousands of dollars for "worthless program membership upgrades."
The regulator first filed a complaint against the online education provider in 2018. The FTC alleges that after signing up and paying a $49 entry fee, customers were bombarded with pitches to upgrade in order to continue through the 21-step program. After paying more and more, the final step reveals that the way to a six-figure income is to sell memberships for the same program to other people, earning commission along the way.
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MOBE has admitted guilt to none of the FTC's complaints.
However, to settle the matter, MOBE operators will pay the FTC $17 million. Under the terms of the deal, McPhee has agreed to hand over roughly $16 million, as well as his ownership stakes in tropical island resorts across Fiji and Costa Rica.
McPhee has also been permanently banned from selling business coaching programs and investment schemes in the future.
Another defendant in the case, Russell Whitney, has passed away but $1.3 million held by his estate has been seized by the FTC. In addition, MOBE executive Susan Zanghi will turn over $33,400 in frozen assets under her name.
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"MOBE falsely promised consumers that it could teach them how to start a successful online business and earn six-figure incomes working from home, and consumers lost millions of dollars as a result," said Andrew Smith, Director of the FTC's Bureau of Consumer Protection. "With this action, we've put an end to the MOBE scheme, but consumers should be on guard for any work-at-home pitch promising substantial income."
In other words, if it sounds too good to be true, it probably is.
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