The Federal Trade Commission is moving against scammers that promise quick financial independence or unrealistic investment returns, among other alleged scams.
Along with 19 federal, state and local law enforcement partners, the FTC announced a nationwide crackdown on scams that “have no basis in reality,” the agency announced this week.
The crackdown, “Operation Income Illusion,” involves more than 50 law enforcement actions against work-from-home and employment scams, pyramid schemes, investment scams and bogus coaching courses, among other schemes, the FTC said.
Scammers have exploited the COVID-19 pandemic as a perfect opportunity to prey on the fears of the public, with some of the most-targeted groups including students, military families, people on a limited fixed income and minorities, the agency said.
Consumers lost more than $610 million to these scams since 2016, with reported losses of more than $150 million in the first nine months of 2020.
“The income scams that the FTC has pursued through its law enforcement actions in this sweep collectively bilked over a billion dollars from consumers,” the agency said.
The FTC said it is asking courts to stop the deceptive schemes and is seeking restitution for affected consumers. Other agencies are also taking action, including the Securities and Exchange Commission, the Commodity Futures Trading Commission and several U.S. Attorney’s Offices.
Two of the court cases cited by the FTC involved alleged get-rich-quick and investment schemes.
One alleged investment scam claimed that “consumers will earn between $500 and $12,500 per sale.” The defendants allegedly charged consumers for services, but the “vast majority of consumers who paid the defendants never earned substantial income, and in fact many consumers earned nothing,” the complaint alleges.
In another case, the FTC’s complaint alleges the defendants “fraudulently marketed investment-related services that they claimed would enable consumers to make consistent profits and beat the market.” The FTC alleges investors have lost over $130 million to the “scam” in the last three years.
“Scammers are preying on the unemployment and anxiety arising from the pandemic by making false promises of big income working from home,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a statement.
“If someone promises you guaranteed income, but then tells you to pay them, tell the FTC right away so we can work to shut them down,” the agency added.
The FTC said it 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.