Utah based marketing firm ordered to pay $16.7 million for selling false real estate investment trainings
SALT LAKE CITY – The Federal Trade Commission (FTC), along with a division within Utah’s Department of Commerce, the Division of Consumer Protection (DCP), have reached a court-ordered settlement with Response Marketing Group LLC, a marketing firm located in Lindon, Utah. Additionally, two real estate celebrities who were affiliated with the firm, Scott Yancey and Dean R. Graziosi, have agreed to pay $1.7 million.
The settlement states that Response Marketing Group will pay $15 million to previous customers and are banned from selling money-making opportunities. The suit brought forward by the FTC and the DCP allege that Response Marketing used false promises to sell expensive real estate investing programs.
Response Marketing utilized infomercials and social media advertisements to draw customers to free events where real estate celebrities promised to share their investing techniques. According to the complaint filed by the FTC and DCP, at these free events Response Marketing enticed attendants to purchase three-day workshops for nearly $1,000, where they would provide consumers with access to special tools that would enable them to become successful real estate investors. At these three day workshops, Response Marketing would pitch additional training programs that costed tens of thousands of dollars.
“This is the largest consumer protection division settlement in Utah’s history and holds Response Marketing Group and its affiliates accountable for the serious financial harm to consumers across the country,” said Utah Department of Commerce Executive Director Margaret Busse. “Utah businesses that seek to take advantage of consumers should be put on notice.”
The company upsold customers by pitching a coaching program titled the ‘Inner Circle’, which could cost up to an additional $30,000. Most consumers who purchased Response Marketing’s products and services did not become successful real estate investors and did not recoup the money they spent on the training programs, according to the complaint.
The district court judge hearing over the lawsuit approved the FTC and DCP’s move for summary judgment in part in June 2022. According to the court, Response Marketing made a number of false or deceptive claims, including that it would give customers exclusive access to a funding network for real estate deals without requiring them to use their own funds, would give students letters allowing them to make discounted cash offers, and would have buyers for homes they wanted to flip for flipped homes.
Response Marketing offered training courses under the titles Affluence Edu, Cash Flow Edu, Flip for Life, OnWealth, Renovate to Rent, and Visionary Events. Response Marketing agreed to stop marketing these products in December 2019 after the FTC and Utah DCP filed its initial complaint.
The settlement also includes Response Marketing’s affiliates, Nudge LLC and BuyPD LLC, as well as four persons who allegedly owned the company. The companies, owners, and president of Response Marketing are all subject to a nationwide ban on the sale of “wealth creation” goods and services as part of the settlement, and consumers will get $15 million in compensation.