Massive Internet fraud shut down by FTC


The Federal Trade Commission has taken legal action against a far-reaching Internet enterprise that allegedly made millions of dollars by luring consumers into “trial” memberships for bogus government-grant and money-making schemes, then repeatedly charged them monthly fees for services they never agreed upon.

According to the FTC’s complaint, “I Works” utilized websites touting the availability of government grants to pay personal expenses or to pitch various money-making programs. The websites offered “free” information at no-risk with a small shipping and handling fee. When consumers provided their billing information, I Works charged them hefty one-time fees of up to $129.95 and monthly recurring fees of $59.95 for the grant or money-making programs.

As a result of the I Works scam, hundreds of thousands of consumers disputed charges on their debit or credit cards. The number of charge-backs was so excessive that millions of dollars in fines were assessed and the company was blocked from accounts maintained by VISA and Mastercard. To keep the scam going, I Works tricked banks into giving them continued charging privileges by creating 51 shell companies with figurehead officers, and by providing them with phony “clean” versions of their websites.

The FTC’s complaint alleges that I Works offered consumers bogus money-making and government-grant opportunities. I Works claimed that the offers were “free” or “risk-free” and that only a small shipping and handling fee would be charged.

The FTC charged I Works with violating federal law by misrepresenting government grants were available for paying personal expenses, that consumers were likely to obtain grants by using the I Works program, that users of their money-making products would earn substantial income, and that their offers were free or risk-free. The complaint also alleged that I Works failed to disclose to consumers who pay the small shipping and handling fee that they would be enrolled in expensive plans that charge fees until cancelled and for charging consumers’ credit cards and bank accounts without their permission.

In addition, the FTC alleged that I Works posted deceptive positive reviews and used deceptive testimonials that misrepresented the benefits of their grant services. Finally, the FTC charged I Works with violating the Electronic Fund Transfer Act and Regulation E by debiting consumers’ bank accounts without their signed written consent and without providing them with a copy of the written authorization.

The FTC complaint named 10 individuals, 10 corporations, and 51 shell companies as defendants. As alleged, the scam was orchestrated by Jeremy Johnson, the sole owner of I Works Inc. In addition to Johnson, Duane Fielding, Andy Johnson, Lloyd Johnston, Scott Leavitt, Scott Muir, Bryce Payne, Kevin Pilon, Ryan Riddle, and Terrason Spinks were named as defendants. Anthon Holdings Corp., Cloud Nine Marketing Inc., CPA Upsell Inc., Elite Debit Inc., Employee Plus Inc., Internet Economy Inc., Market Funding Solutions Inc., Network Agenda LLC, and Success Marketing Inc. were named as corporate defendants.

I Works gained access to the Visa and MasterCard systems through many entities. The banks included: Wells Fargo, HSBC Bank USA, First Regional Bank, Harris National Association, and Columbus Bank and Trust Company. Payment processors included First Data, ECHO, Global Payment Systems, Litle & Co., Moneris, Payment Tech, Trident, and Vital, as well as independent sales organizations, including CardFlex, RDK Inc., Merchant eSolutions, Pivotal Payments, PowerPay, and Swipe Merchant Solutions.

The 51 shell companies named in the complaint are: Big Bucks Pro, Blue Net Progress, Blue Streak Processing, Bolt Marketing, Bottom Dollar, doing business as BadCustomer.com, Bumble Marketing, Business First, Business Loan Success, Cold Bay Media, Costnet Discounts, CS Processing, Cutting Edge Processing, Diamond J. Media, Ebusiness First, Ebusiness Success, Ecom Success, Excess Net Success, Fiscal Fidelity, Fitness Processing, Funding Search Success, Funding Success, GG Processing, GGL Rewards, Highlight Marketing, Hooper Processing, Internet Business Source, Internet Fitness, Jet Processing, JRB Media, Lifestyles For Fitness, Mist Marketing, Money Harvest, Monroe Processing, Net Business Success, Net Commerce, Net Discounts, Net Fit Trends, Optimum Assistance, Power Processing, Premier Performance, Pro Internet Services, Razor Processing, Rebate Deals, Revive Marketing, Simcor Marketing, Summit Processing, The Net Success, Tranfirst, Tran Voyage, Unlimited Processing, and Xcel Processing.

“No consumer should be sucker-punched into making payments for products they don’t know about and don’t want,” said FTC Chairman Jon Leibowitz.

If you have been a victim of I Works, a complaint can be filed with the Federal Trade Commission at http://www.ftc.gov.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2010/dec/26/massive-internet-fraud-shut-down-by-ftc/columns-welewisjr/

To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

 

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

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