Recently, the Federal Trade Commission shut down a much advertised scheme offering high income and preapproved credit cards. According to the FTC, Credit Development International (CDI) and Drivers Seat Network promised that investors could earn up to $18,000 a month by paying a minimal initial investment of $130, small monthly payments of $30, and by recruiting others to join. The investors would also receive a preapproved, unsecured Visa or MasterCard with high credit limits In reality, the Commission alleges that CDI was nothing more than a pyramid scheme in which most consumers lost money and never received credit cards.
The FTC charged that Nia Cano, Charles Johnson and Jaime Martinez marketed the alleged pyramid scheme through recruitment seminars and sales meetings across the country. At those seminars they allegedly made promises and provided advice and promotional materials for members to use in recruiting others - promises and promotional materials that the FTC said were deceptive. Many of those members used unsolicited e-mail, spam, to recruit. The agency also named Leaders Alliance, Inc., doing business as American Business Consultants or ABC, which processed CDI memberships and applications fees, as a defendant.
According to the FTC complaint, the claims made by the defendants were deceptive and in violation of the law. Providing promotional materials to members with the same claims was also deceptive and in violation of the law. While the scheme has been temporarily curtailed, the FTC has asked the court to order a permanent halt to these activities and order the defendants to refund money to consumers.
For more information about this case, check out the FTC press release.
Copies of the FTC's advice on pyramid schemes is available on its website.
NFIC also has tips for telemarketing or online pyramid scams.
If you have any questions or would like to report an incident, please call NCL's National Fraud Information Center at 1-800-876-7060 or use one of our online forms.
NOTE: The Federal Trade Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or a ruling that the defendant has actually violated the law. The case will be decided by the court.
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