FTC sues Nudge, LLC and affiliates for operating real estate training scheme

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The Federal Trade Commission (FTC) and the Utah Division of Consumer Protection filed a lawsuit to shutdown Nudge, LLC and its affiliates, Response Marketing Group, LLC and BuyPD, LLC.

These companies allegedly defrauded millions of dollars from consumers through their real estate training scheme.

In the complaint, the FTC and the Utah Division of Consumer Protection alleged that Nudge bilked more than $400 million from consumers since early 2012 when it started selling real estate training packages.

Nudge and its affiliates used real estate celebrities to lure consumers

Nudge and its affiliates allegedly made empty promises to consumers to convince them to buy real estate training packages that cost thousands of dollars. The companies claimed that consumers will make “amazing profits” once they learn the strategies “flipping houses.”

The FTC and the Utah Division of Consumer Protection noted that the companies use real estate television celebrities to lure consumers to their free 90-minute seminars.

Some of their real estate celebrity endorses include Scott Yancey from A&E’s “Flipping Vegas,” Doug Clark from Spike TV’s “Flip Men,”  Josh Altman from Bravo’s “Million Dollar Listing Los Angeles” as well as  Drew Levin and Danny Perkins from HGTV’s “Renovate to Rent.”

Allegations against the defendants

The FTC and the Utah Division of Consumer Protection alleged that the free seminars were sales pitches to encourage consumers to spend more than $1,100 to participate in three-day real estate training and advanced training worth as much as $40,000.

Nudge and its affiliates falsely promised that during these workshops consumers will gain access to a system for finding “lucrative” deals. The companies also misrepresented their services to consumers.

The FTC and Utah Division of Consumer Protection found that over 95 percent of consumers who attended Nudge’s seminars paid more to the company than their net profit from subsequent real estate transactions.

The defendants allegedly violated the FTC Act and the FTC’s Telemarketing Sales Rule, as well as three Utah statutes: the Utah Consumer Sales Practices Act; the Business Opportunity Disclosure Act; and the Telephone Fraud Prevention Act.

In a statement, FTC Bureau of Consumer Protection Director Andrew Smith, said, “These defendants presided over a sales process that started with empty promises of future wealth and ended with many consumers left in financial ruin. The lure of easy income is strong, but consumers should stop and evaluate the facts behind any money-making promise.”