FTC shuts down website marketing business
- 15 May, 2012 04:50
A U.S. court has shut down the operations of a company that allegedly promised it would build its customers websites that would generate income of up to US$20,000 per month, after the U.S. Federal Trade Commission filed a complaint about its business practices.
The U.S. District Court for the District of Arizona has granted the FTC's request for a temporary restraining order against North American Marketing and Associates, the FTC announced Monday. Judge David Campbell granted the restraining order on May 2, but court documents were sealed at the time.
North American Marketing and related companies promised to build and host websites for customers, for fees ranging from $100 to $400, the FTC alleged. The company told customers that the websites could generate sales of $3,000 to $20,000 per month when Internet users clicked through to make purchases from retailers such as Wal-Mart, Best Buy and Starbucks, the agency said.
Customers were promised free marketing, but instead received a follow-up sales pitch from the defendants, who tried to sell them an advertising package typically costing between $5,000 and $20,000, the FTC alleged.
However, the advertising packages did not generate any significant sales, and some consumers who complained to the company were sold thousands of dollars in additional advertising services, the FTC alleged. After customer complaints, the defendants shut down operations and offered similar deals under new business names, the agency said.
Attempts to contact North American Marketing were not successful.
The corporate defendants in the FTC case include North American Marketing and Associates, NAMAA, TM Multimedia Marketing of Nevada, TM Multimedia Marketing of Arizona, National Opportunities of Nevada and Arizona and World Wide Marketing and Associates.
The FTC accused the defendants with violating the FTC Act and the FTC's Telemarketing Sales Rule by misrepresenting that consumers who bought websites and advertising packages would earn substantial income, and that experts would help them operate their business.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is firstname.lastname@example.org.