Complaint Alleges the Company Swindled Consumers Out of Over $400 Million Over Three Years.
The FTC has taken action against one of the largest real estate “training” companies in the country – Nudge, LLC.
The complaint is a fascinating behind the scenes view of direct marketing at its worst – layers and layers of inter-related companies, self-dealing, platform speakers using every trick of the trade, aggressive telemarketers.
Read the excerpts from the article:
- The Federal Trade Commission and the Utah Division of Consumer Protection sued Nudge, LLC and affiliated companies, alleging that they make empty promises about earning money by “flipping” houses, to convince consumers to buy real estate training packages that cost thousands of dollars.
- According to the complaint, Utah-based Nudge markets its training through real estate celebrities who promise to reveal strategies for making “amazing profits” at seminars included in the packages. One celebrity endorser quoted in the complaint, for example, promises he will share his “formula for success” that is “proven” to get results. As alleged in the FTC’s complaint, however, the seminars are mostly designed to sell additional training, not to help consumers make money.
- Nudge began selling real estate training packages at least as early as 2012. In its complaint, the FTC alleges that Nudge’s revenues from late 2014 to late 2017 alone were more than $400 million.
- According to the complaint, the scheme starts with advertisements featuring real estate television celebrities, including Scott Yancey from A&E’s “Flipping Vegas,” Doug Clark from Spike TV’s “Flip Men,” Drew Levin and Danny Perkins from HGTV’s “Renovate to Rent,” and Josh Altman from Bravo’s “Million Dollar Listing Los Angeles.” These advertisements, which promise celebrities’ insider tips on how to make money in real estate, allegedly have enticed thousands of consumers to attend free 90-minute seminars.
- The FTC’s complaint charges that the free seminars are predominantly a sales pitch to spend more than $1,100 to attend a three-day workshop, where consumers will supposedly get access to a “system” for finding “lucrative” deals. Those promises also prove empty, as the three-day workshops largely consist of general information about real estate investing, misrepresentations about services offered by Nudge, and a sales pitch for “advanced training” that costs as much as $40,000, according to the complaint.
This is a how-to of how not to comply with consumer protection laws. Beware of such fraudulent get-rich-easy-and-quick schemes.