In 2024, FTC compliance lawyer wrote about the first case where the Federal Trade Commission charged a gig work company for allegedly misleading consumers about the money they could make on the company’s platform and marketing its business opportunity purportedly without complying with the FTC’s Business Opportunity Rule.
On July 17, 2025, the FTC announced an action against an alleged eCommerce Business Opportunity scam that has resulted in permanent bans for the owner and his companies. More specifically, the FTC announced that “[t]he remaining defendants in a business opportunity scheme halted by the Federal Trade Commission will turn over cash and property valued in the millions of dollars to settle allegations they lured consumers with false promises of big returns selling goods through Amazon’s and Walmart’s online marketplaces.”
Under the order, an individual and companies allegedly associated with him will turn over cash, real estate interests, and personal property which will be used for consumer redress. The FTC secured similar settlements from the other defendants in this case in March 2025.
“Sellers of e-commerce business opportunities and investments must follow the law,” said FTC lawyer Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “These defendants took advantage of people looking to provide for their families and obtain financial security. The FTC will take action against those who promise big returns that they can’t back up,” according to the FTC.
In October 2024, the FTC filed suit alleging that the companies and their operators made false claims that consumers could earn significant profits from online e-commerce stores that the defendants would establish and operate on their behalf. For example, the FTC alleges that they promised that consumers would generate sales of “$100K+ per month” and that their stores could become “million-dollar” operations. “These promises rarely, if ever, materialized,
according to the FTC. “Most consumers lost tens of thousands of dollars investing with defendants, and many incurred crushing debts due to the alleged scam,” the FTC announcement states.
The first court order announced today bans an individual and Ecom Genie Consulting from any involvement with the sales, marketing, or operations of any business opportunity. It also prohibits them from deceiving consumers about any good or service they sell, including by making unsubstantiated earnings claims. The order contains a monetary judgment of nearly $14 million, which is partially suspended based on their inability to pay the full amount. If any of the defendants are found to have misled the FTC about their financial status, the full monetary judgment will immediately become due.
The four defendants subject to that order, including relief defendants, are required to turn over their interest in commercial real estate in Canada, other property worth more than $300,000, and roughly $1.7 million in cash.
The other proposed order bans two corporate entities from any involvement with the sales, marketing, or operations of any business opportunity. The order also requires one of the foregoing corporate entities to turn over roughly $73,000 in cash.
Federal Trade Commission attorneys aggressively investigate and enforce Business Opportunity Rule violations, which requires in part that prospective workers receive key disclosures about earnings claims and other important information before they decide to invest their time and money. Consult with an experienced FTC CID attorney to discuss the impact of these actions and how to comply with applicable gig economy marketing legal regulatory requirements.
