At the request of the Federal Trade Commission, a federal court has temporarily enjoined Utah-based house-flipping seminar promoter Zurixx from "unsupported marketing claims and from interfering with consumers’ ability to review Zurixx and its products."
The court has appointed a monitor and told the company to preserve its assets. The FTC is seeking a permanent injunction, according to its complaint against the company.
The FTC says the company's ads "routinely feature endorsements from celebrities like Tarek and Christina El Moussa from HGTV’s Flip or Flop, Hilary Farr from HGTV’s Love It or List It, and Peter Souhleris and Dave Seymour from A&E’s Flipping Boston. The ads entice consumers to free events that Zurixx claimed would teach consumers how to make large profits by flipping 'using other people’s money.'"
Related: FTC Looks at 'Made in USA' Ad Claims
“From start to finish, these defendants used the promise of easy money and in-depth information to lure consumers down a path that could cost them thousands of dollars and put them in serious debt,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a statement on the court injunction. “When a company tells consumers they have the secret to get rich with little work, we encourage consumers to take a hard look at what’s really being offered.”
The FTC could theoretically also pursue the outlets that ran such ads, since those are responsible for the advertising on their channels and networks and for taking a hard look at what is being advertised, so to speak. It historically has not done so, although in the case of deceptive weight loss ads has called on broadcast, cable and online outlets to better police their wavers and wires for ads that appeared deceptive on their face.
The FTC's complaint against the company alleges it promoted a "free" event that was, instead, "a sales presentation for its three-day workshops that cost $1,997." And when the company provided refunds, said the FTC, it also allegedly "has required some consumers who received a refund to sign an agreement barring them from speaking with the FTC, state attorneys general, and other regulators; submitting complaints to the Better Business Bureau; or posting negative reviews about Zurixx."
