Consumer Alert
If you paid a scammer with a gift card, is your money gone? Maybe not
By
Cristina Miranda
Consumer Education Specialist, FTC
August 21, 2023
(View or share the YouTube version of this video).
Did someone tell you to buy a gift card and give them the numbers? That’s a scam. Your money was gone the moment you gave someone those gift card numbers. But now, some gift card companies might be able to get your money back.
Gift card scams start with calls, texts, emails, or social media messages. The scammer pretends to be someone they’re not: a company, the government, a family member, or romantic interest. Their message is always urgent. And they want money. They’ll tell you to buy a gift card or maybe multiple gift cards. Once you do, they’ll demand you send a photo of the card or give them the numbers on the back of the card.
But now, some gift card companies are flagging fraudulent transactions and freezing stolen gift card money so that scammers can’t get it. And those gift card companies want to give that money back.
So, if a gift card scam happens to you, act fast:
- Report it to the gift card company. Tell themyou were scammed. Give the gift card company the information from your receipt or a copy of the numbers on your gift card.
- Ask for your money back. Once you report a gift card scam to the gift card company, ask for your money back. If the money was frozen or not downloaded by the scammer, some gift card companies will give the money back.
- Tell the FTC at ReportFraud.ftc.gov. Your report makes a difference and helps #stopscams.
The faster you contact anygift card company to report a gift card scam, the better the chance of getting your money back. But it doesn’t matter when you were scammed with a gift card. For more information about avoiding and reporting gift card scams, visit ftc.gov/giftcards.
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Consumer Alert
Don’t pay for help with your federal student loans
By
Ari Lazarus
Consumer Education Specialist
August 21, 2023
You never need to pay to sign up for government student loan debt relief programs — but scammers will tell you otherwise. Here’s how to spot scam companies that charge illegal upfront fees for so-called help with your student loans.
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The first thing to know is this: you don’t have to pay for help managing your student loans. If someone tries to charge you up front, before they’ve done anything, that’s your first clue that this is a scam. And nobody but a scammer will ever offer you quick loan forgiveness.
Take, for example, Apex, a company that — according to an FTC lawsuit — enrolled people in their sham student loan forgiveness program. During the federal student loan pause, when most borrowers weren’t in contact with their loan servicers, Apex signed people up for what they called debt relief programs.
So, how did they convince borrowers to get on board? Apex employees pretended they worked with the Department of Education (they didn’t) and told borrowers they were their new loan servicers (they weren’t). They then signed borrowers up to make automatic payments to a debt relief program that didn’t exist. The problem? Payments went to Apex’s pockets, rarely making it to actual loan servicers. And, to add insult to injury, the COVID-19 federal student loan pause meant that federal borrowers didn’t have to make any loan payments starting March 2020.
Now that the return to repayment is coming up, start at StudentAid.gov/repay to look at the status of your federal student loans. You’ll find, among other things, information on income-driven repayment plans that adjust your monthly payment based on your income. If your loans are private, go directly to your loan servicer.And if you spot a scam, the FTC wants to know about it: ReportFraud.ftc.gov.
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Consumer Alert
Vetting a business or coaching opportunity before you buy in
By
Alvaro Puig
Consumer Education Specialist
August 22, 2023
The FTC charged that a business opportunity and coaching scheme bilked consumers out of tens of millions of dollars. The scheme grew on the back of baseless claims about how much money customers could make.
The company behind the scheme, Automators, AI (formerly known as LLC, Empire Ecommerce and Onyx Distribution) promised to set up for buyers profitable third-party stores on sites like Amazon, Walmart, and Facebook Marketplace, using artificial intelligence to pick top-selling products.
They said they were experts who’ve been doing this for years and that they’ve helped clients make a lot of money. In reality, most of the online stores the company managed for its clients were routinely suspended and shut down by Amazon and Walmart for policy violations. And despite their claims that customers could make thousands of dollars a month in passive income, most clients didn’t even recuperate the money they paid to buy in.
So, what should you do if you’re thinking about buying into a business opportunity? Ask the seller to give you a copy of the legally required 1-page disclosure document. It must
- identify the seller
- tell you about any lawsuits against the seller
- tell you if the seller has a cancellation or refund policy, and what the terms are
- give you a list of references
- tell you if the seller is making a claim about how much money you can make. If they are, they also must give you an earnings claim statement.
If the seller says anything that contradicts what’s in their disclosure document or earnings claim statement, that’s a sign of a shady operation that you should steer clear of.
To learn more, check out When a Business Offer or Coaching Program Is a Scam.
If you think a business opportunity or coaching program is a scam, report it to the FTC at ReportFraud.ftc.gov.
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Search Terms
Topics
Money-Making Opportunities and Investments
Scams
Money-Making Opportunity Scams
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For Release
FTC Action Stops Business Opportunity Scheme That Promised Its AI-Boosted Tools Would Power High Earnings Through Online Stores
Court order temporarily halts the operations of Automators AI, which promised consumers high returns on investment in artificial intelligence-boosted stores on Amazon.com and Walmart.com, agency says
August 22, 2023
Tags:
- Consumer Protection
- Bureau of Consumer Protection
- Work-at-Home
- Going into Business
- deceptive/misleading conduct
- Retail
- Technology
- Advertising and Marketing
- Online Advertising and Marketing
As a result of a Federal Trade Commission lawsuit, a federal court has temporarily shut down a business opportunity scheme that lured consumers to invest $22 million in online stores, using unfounded claims about income and profits. The operators of Automators also claimed to use artificial intelligence to ensure success and profitability for consumers who agreed to invest with Automators.
In addition to offering consumers high return as “passive investors” in profitable e-stores, Automators, which previously used the names Empire and Onyx Distribution, also offered to teach consumers how to successfully set up and manage e-stores themselves using a “proven system” and the powers of artificial intelligence.
“The defendants preyed on consumers looking to provide for their families with promises of high returns and the use of AI to power such returns,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Their lies caused consumers to lose tens of thousands of dollars, with many losing their life savings. The FTC is working to hold defendants accountable and to secure redress for their victims.”
The FTC’s complaint against defendants Roman Cresto, John Cresto, and Andrew Chapman, through their companies Automators AI, Empire Ecommerce and Onyx Distribution, claims that the vast majority of defendants’ clients did not make the promised earnings or even recoup their investment. Instead, most clients lost significant amounts and Amazon and Walmart have routinely suspended or terminated the stores that defendants operated for repeated policy violations.
The complaint charges that the Crestos and Chapman deceived consumers about the scheme in numerous ways, including by making false claims about:
- Their own background: The Crestos and Chapman falsely claim to have a proven record of helping numerous consumers make money in online stores. In one video, Roman Cresto falsely claims he is a “leading 8-figure Amazon entrepreneur and creator of industry leading wealth-generation systems.”
- Lavish promises of success: The scheme relied on numerous false or baseless projections and stories of supposed success, including “$4k-$6k consistently monthly net profit,” and “$200k in one month and 100% ROI (return on investment) in 8 months.”
- Endorsements and affiliate marketing: The complaint cites an example in which an affiliate marketer of Automator made claims on social media about his success with Automators, pointing to sales and profit numbers that the Crestos and Chapman knew were false. In truth, the affiliate marketer’s e-store was losing money and got shut down.
- Artificial intelligence: Defendants claimed to use “AI machine learning” to maximize revenues, such as “We’ve recently discovered how to use AI tools for our 1 on 1 Amazon coaching program, helping students achieve over $10,000/month in sales!”
- Venture capital backing: Defendants claimed that Empire was backed by “venture capital,” when in fact no money was ever invested into Empire by a venture capital firm.
Numerous consumers complained to defendants about their losses and, the complaint charges, instead of being offered refunds they were offered new online storefronts on different platforms. In addition, defendants pressured such consumers to sign non-disparagement agreements to prevent them from posting reviews about defendants and their services.
The complaint charges that the defendants violated the FTC Act, the Business Opportunity Rule, and the Consumer Review Fairness Act, and it asks the court to permanently shut down the company’s operations.
The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Southern District of California. The court entered the temporary restraining order against the defendants on August 11, 2023.
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. The case will be decided by the court.
The staff attorneys on this matter are Colleen Robbins and Christopher Brown of the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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Consumer Alert
Did you hire Ameritech? Look out for a refund soon
By
Ari Lazarus
Consumer Education Specialist, FTC
August 22, 2023
If you made payments to Ameritech for what you thought was your student loan, you may be getting a refund soon. Today, the FTC and DOJ are sending more than $9 million in refunds to people who lost money to this scheme. Think you might be eligible? Read on for information on what to do.
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Ameritech employees tricked people into thinking they qualified for federal student loan and forgiveness programs. In reality, the illegal up-front fees (up to $800) and monthly fees ($49-99) that they charged — that were supposed to pay down student loan balances — instead went straight into Ameritech’s pockets.
More than 22,000 people are getting refunds and most will get a check in the mail. Those checks need to be cashed within 90 days. But if you didn’t have an address on file, you’ll get your payment through PayPal.
If you have questions about your payment, contact the refund administrator, Rust Consulting, at 1-833-579-3126. You can also look over frequently asked questions about the refund process.
Did someone say you need to pay money or give personal information to get an Ameritech refund? That’s a scam. The FTC will never charge you money or demand you share personal information to get a refund. Anyone who does is a scammer.
