A wide-ranging crackdown by the Federal Trade Commission in December included charges against a seller of ink cartridge display racks who the FTC says misrepresented claims of potential income among other violations.
Results from Project FAL$E HOPE$, a federal and state sweep targeting bogus business opportunities and work-at-home scams, charged that Holiday Ink, Inc., a Delaware corporation with its principal place of business in Georgia, sold ink cartridge display racks by misrepresenting that purchasers would earn a substantial income, by misrepresenting the locations available for the racks, and by using shills to reinforce those false claims.
According to court papers, since at least 2003 Holiday Ink told consumers they could earn yearly net profits from $20,000 to $184,000, depending on the number of display racks purchased. In numerous instances consumers discovered that earnings in the amounts represented by Holiday Ink could not be made and that prime locations were not available for the display racks.
Prospective purchasers were urged to contact references selected by Holiday Ink. According to FTC claims, Holiday Ink paid people who never purchased its racks to provide the references and who were, in fact, often employees of Holiday Ink.
The FTC also charged that Holiday Ink did not provide complete and accurate disclosure documents, did not provide an earnings claim disclosure, and did not have a reasonable basis for their earnings claims. Consumers invested a minimum of $7,950 for three racks and up to $55,950 for 20 racks. In many cases consumers lost their entire investment.
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