Back in June I wrote an investigative piece on BadCustomer.com. After hearing about the site and reviewing it I became very concerned at what was behind it.
Locally Jeremy Johnson is a humanitarian helicopter pilot, assisting the local Sheriff department in search and rescue operations and even doing some work internationally. Hooray, a hero. And good on him for that. But how many people were saved using profit made from sucker punching thousands of consumers? That is far less than hero worthy.
The Bad Customer.com com site was created to blacklist consumers that issued chargebacks for goods and services. But the kicker is that the majority of those chargebacks were for goods and services they never ordered from Jeremy Johnson affiliated companies.
In my original article BadCustomer.com Investigative Report. Is it a Scam or Something You Need to Be Afraid Of?, I had emailed Kevin Pilon, named in the FTC suit and received a response from a different person.
When asked about the relationship between Jeremy Johnson, Invitation Entertainment and BadCustomer.com, Brien Heidman said, “The reason all our info isn’t public is because we don’t want it that way and we’d like to keep it that way.” He also said, ” I’m sure the story will be negative ….which is surprising since we are an advocate for the consumer.” Really? It’s hard to believe that a company that calls itself BadCustomer is an advocate for the consumer.
About Kevin Pilon
An advocate for the consumer, hum. Here is what the FTC complaint had to say about Kevin and his consumer advocacy work he was engaging in when I communicated with him.
Kevin Pilon (“Pilon”) works at I Works where he facilitates I Works’s credit and debit card processing for I Works’s sale of core products and Upsells. He is part of the Merchant Account department and is or was responsible for working with Payment Processors.
Pilon is the titular owner and officer of at least 16 Shell Companies that I Works and J. Johnson established to act as fronts [redacted]. These Shell Companies include Bottom Dollar, Bumble Marketing, Costnet Discounts, Cutting Edge Processing, Ebusiness First, Excess Net Success, Fiscal Fidelity, Fitness Processing, GG Processing, Internet Business Source, Net Business Success, Net Fit Trends, Power Processing, Rebate Deals, The Net Success, and xCel Processing.
Pilon has opened maildrops in various states at which complaints about I Works’s marketing of core products and Upsells are received, which are then forwarded to I Works’s headquarters in St. George, Utah. Pilon has used a [redacted] to pay the rental fee for at least [redacted] maildrops in [redacted] states used by the I Works Enterprise between [redacted].
Pilon is the titular owner and officer of Shell Company Bottom Dollar which does business as BadCustomer.com. In connection with BadCustomer.com, Pilon works closely with Defendant Jeremy Johnson.
Pilon has signatory authority over bank accounts titled in the name of numerous Shell Companies, which accounts received funds from I Works directly and/or contain funds from I Works’s sale of core products and Upsells.
Pilon, as a member of the Merchant Account department, attended meetings at which the high number of chargebacks related to I Works’s marketing of its core products and Upsells was discussed.
At all times material to this Complaint, acting alone or in concert with others, Pilon has formulated, directed, controlled, had the authority to control, or participated in the acts and practices of I Works and/or one or more of the other business entities named herein, including the acts and practices set forth in this Complaint. – Source
On December 22, 1010 the FTC Stepped In.
The Federal Trade Commission is taking legal action against a far-reaching Internet enterprise that allegedly has made millions of dollars by luring consumers into “trial” memberships for bogus government-grant and money-making schemes, and then repeatedly charging them monthly fees for these and other memberships that they never signed up for. The FTC seeks to stop the illegal practices and make the defendants pay redress to consumers and give up their ill-gotten gains.
“No consumer should be sucker-punched into making payments for products they don’t know about and don’t want,” said FTC Chairman Jon Leibowitz.
The FTC’s complaint alleges that the defendants offer consumers bogus money-making and government-grant opportunities. They claim that the offers are “free” or “risk-free,” and that they will charge customers only a small shipping and handling fee.
According to the FTC’s complaint, the operation, doing business under the name I Works and controlled by Jeremy Johnson and nine other individuals, uses websites that tout the availability of government grants to pay personal expenses or pitch various money-making programs. The websites offer “free” information at no risk and ask consumers to provide their credit or debit card numbers to pay for a small shipping and handling fee such as $1.99. When consumers provide their billing information, though, I Works proceeds to charge them hefty one-time fees of up to $129.95 and monthly recurring fees of up to $59.95 for the grant or money-making programs. I Works charges them additional monthly fees for one or more unrelated programs that consumers did not agree to.
The FTC’s complaint alleges that this scheme has caused hundreds of thousands of consumers to seek chargebacks – reversals of charges to their credit cards or debits to their banks accounts. The high number of chargebacks has landed the defendants in VISA’s and MasterCard’s chargeback monitoring programs, resulted in millions of dollars in fines for excessive chargebacks, and prevented the defendants from getting access to the credit card and debit card billing systems using their own names. To keep the scam going, the defendants tricked banks into giving them continued access to these billing systems by creating 51shell companies with figurehead officers, and by providing the banks with phony “clean” versions of their websites.
The FTC has charged the defendants with violating the FTC Act by misrepresenting that government grants are available for paying personal expenses, that consumers are likely to obtain grants by using the defendants’ program, that users of their money-making products will earn substantial income, and that their offers are free or risk-free. The complaint also alleges that defendants failed to disclose that consumers who pay a nominal shipping and handling fee will be enrolled in expensive plans that charge consumers fees until they cancel, and that the defendants charged consumers’ credit cards and debited their bank accounts without their consent.
In addition, the FTC alleges that defendants posted deceptive positive reviews and used deceptive testimonials that misrepresented the benefits of their grant services. Finally, the FTC has charged the defendants with violating the Electronic Fund Transfer Act and Regulation E by debiting consumers’ bank accounts without their signed written consent and without providing consumers with a copy of the written authorization.
As alleged in the complaint, the defendants gained access to the Visa and MasterCard systems through many entities. The banks included Wells Fargo, N.A., HSBC Bank USA, First Regional Bank, Harris National Association, and Columbus Bank and Trust Company. The payment processors the defendants used included First Data, ECHO, Global Payment Systems, Litle & Co., Moneris, Payment Tech, Trident, and Vital, as well as independent sales organizations, including CardFlex, RDK Inc., Merchant eSolutions, Pivotal Payments, PowerPay, and Swipe Merchant Solutions.
The FTC complaint names 10 individuals, 10 corporations, and 51 shell companies as defendants. As alleged in the complaint, the lynchpin of the enterprise is Jeremy Johnson, the sole owner and officer of I Works Inc., which has done business under numerous names. The FTC’s complaint names Johnson and nine other individual defendants: Duane Fielding; Andy Johnson; Loyd Johnston; Scott Leavitt; Scott Muir; Bryce Payne; Kevin Pilon; Ryan Riddle; and Terrason Spinks. In addition, the 10 corporate defendants are: I Works Inc.; Anthon Holdings Corp.; Cloud Nine Marketing Inc.; CPA Upsell Inc.; Elite Debit Inc.; Employee Plus Inc.; Internet Economy Inc.; Market Funding Solutions Inc.; Network Agenda LLC; and Success Marketing Inc.
The 51 shell companies named in the complaint are Big Bucks Pro Inc., Blue Net Progress Inc., Blue Streak Processing Inc., Bolt Marketing Inc., Bottom Dollar Inc., doing business as BadCustomer.com, Bumble Marketing Inc., Business First Inc., Business Loan Success Inc., Cold Bay Media Inc., Costnet Discounts Inc., CS Processing Inc., Cutting Edge Processing Inc., Diamond J. Media Inc., Ebusiness First Inc., Ebusiness Success Inc., Ecom Success Inc., Excess Net Success Inc., Fiscal Fidelity Inc., Fitness Processing Inc., Funding Search Success Inc., Funding Success Inc., GG Processing Inc., GGL Rewards Inc., Highlight Marketing Inc., Hooper Processing Inc., Internet Business Source Inc., Internet Fitness Inc., Jet Processing Inc., JRB Media Inc., Lifestyles For Fitness Inc., Mist Marketing Inc., Money Harvest Inc., Monroe Processing Inc., Net Business Success Inc., Net Commerce Inc., Net Discounts Inc., Net Fit Trends Inc., Optimum Assistance Inc., Power Processing Inc., Premier Performance Inc., Pro Internet Services Inc., Razor Processing Inc., Rebate Deals Inc., Revive Marketing Inc., Simcor Marketing Inc., Summit Processing Inc., The Net Success Inc., Tranfirst Inc., Tran Voyage Inc., Unlimited Processing Inc., and Xcel Processing Inc.
The Pitch and Lures
The FTC complaint lists the business practices used to take advantage of consumers.
In numerous instances, consumers are drawn into Defendants’ scheme through websites that trumpet the availability of government grants to pay personal expenses or websites that offer a money-making opportunity. Defendants offer information regarding grants and make- money opportunities, purportedly at a nominal cost of $1.99 or $2.99. Defendants fail to disclose or to disclose adequately that their offer includes a Negative Option Plan for an online membership; consumers who do not cancel their memberships within a short period of time will be billed a hefty one-time charge and enrolled in a continuity plan that will result in monthly recurring charges. Defendants also fail to disclose or to disclose adequately that they will charge consumers’ credit cards or debit funds from their bank accounts recurring monthly fees for Forced Upsells – additional bundled products from which consumers cannot opt-out.
Defendants offer their grant product on hundreds of websites that tout the availability of government grants to pay personal expenses. These websites frequently represent that government grants are available to pay medical bills, start home businesses, for free healthcare, pay power bills, replace kitchen and bathroom faucets, fix up a home, or pay a mortgage.
One offer proclaims “Now It’s Your Turn to Claim Government Grant Money.” A different offer promises that “Finding Government Grant money has never been easier or quicker!”
Another offer hypes the billions of dollars available for “Personal Grants!” and encourages individuals to “claim your share of the millions of dollars in Grant Money Given Away Every Year!” According to this offer, “some of the Government Grants that have been funded” include “$9,500 to pay medical bills,” “$50,000 for college,” and “$10,000 for free healthcare.”
Other grant-related offers tell individuals they can use the “free” government funding to “Start a Business,” “Expand Your Current Venture,” “Purchase Real Estate,” “Buy 20 Equipment,” “Pay Medical Bills,” “Start a Home Business,” and for “Free Healthcare.”
Defendants also use streaming video to convince consumers of the benefit of their government grant product. For instance, when consumers visit the website entitled Grant Gold, a male model appears at the bottom right hand corner of the website’s landing page and states, among other things:
With your permission, I want to send you a grant CD which reveals how to get available grants from the U.S. government. In it, you will discover countless ways to get something back for your tax dollars. And if you respond now, I’ll send it to you for only the cost of shipping. . . . For example, you may qualify for thousands of dollars to pay your mortgage. Or even find money to live on while you start a business. You can receive financial assistance for medical bills . . . .
Spam emails sent by Defendants and/or their agents mirror Defendants’ own misrepresentations about their grant-related products. For example, an email promoting Grant Funding Toolbox, using as an address a maildrop opened by J. Johnson and with a subject line “Pres Obama want to give you Free Cash you could be Cashing your Federal Check In as little as 12 days,” promises that the grants are for people who need assistance “paying for bills, buying a home, . . . or even helping raise children.” Another of Defendants’ Spam emails using the same maildrop address and with a subject line “FREE CASH to help you get started!” proclaims that “Our Grant Program Software” is waiting to help “Stop Forclosures”[sic] and “Pay Down Debt” and asserts that “the government could have a check to you in as little as two weeks.” Yet another Spam email using one of Defendants’ maildrop addresses in Nevada and with a subject line “Government Funding Available” states that “Government money is readily available for many reasons including: . . . Rent payment assistance, Bills . . . and Much Much More.”
Defendants’ other Spam emails include testimonials. For instance, an email from with a subject line “Uncle Sam could give you up to $25,000 – open to see how,” includes a testimonial from a Silvia Henriquez stating that she did not have money to pay her electric bill or feed her children and that she applied for a grant and received $500.
Defendants provide their affiliates with ready-to-send emails that advertise the Defendants’ grant and money-making programs. The Defendants make these emails available on a website for affiliates called the I Works Media Center. The emails include a default link to ravenmediainc.com, an URL that is registered to an individual with an I Works email address. In one of the emails, Defendants proclaim that “Every year, the government gives away MILLIONS of dollars to people JUST LIKE YOU! Need FAST CASH to start a business, attend college, or pay off bills?” And, another email states that consumers can use “FREE MONEY dolled [sic] out by 1,400 government agencies” to “buy a new home, car, pay for college, medical bills, groceries, bills, and more.” A third email announces there are “THOUSANDS of dollars in FREE 26 Government grant money for the holidays!” and features a woman in a Santa Claus hat holding a wad of hundred dollar bills.
Defendants have marketed their grant products under various names that invoke a connection between their products and government grants, such as: Federal 3 Grant Connection, Govt Grant Connection, Fast Government Grants, Fast Gov Grants.com, Get Government Dollars, Government Funding Solutions, and [redacted]. Defendants have also marketed their grant products through websites with names such as: federalgovernmentgrantsolutions.com
In fact, there are few, if any, government grants available to individual consumers. In addition, contrary to Defendants’ representations, government grants are not available to individuals to pay personal expenses such as their mortgage, bills, Christmas presents, and emergencies. Instead, most government grants are awarded to colleges, universities, and other nonprofit organizations. Moreover, Defendants do not possess and rely upon a reasonable basis to substantiate their representation that government grants are available to individuals for personal expenses.
In many instances, Defendants also represent that consumers who provide their names, addresses, telephone numbers, and credit or debit card information will be charged a nominal shipping and handling fee to receive a CD and access to a website, which Defendants manage, that contains information that will enable the consumer to find and obtain government grants to pay personal expenses. A typical representation is: “Our program doesn’t just list Grants, it walks you step-by-step through how to qualify, who to contact (including address details) and many examples of how to get Government and Private Grants!” Yet another offer represents that the grant product “contains valuable information you need to know about how and where to access grant money that may be available. . . You’ll also have the tools and resources necessary to find, apply for and secure this money.” A streaming video of a male model on a grant website’s Order page, in the lower right hand corner, states, among other things, that the online membership program:
walks you step by step through exactly how to qualify and who to contact. It includes all required addresses and what to say to easily get the tax-free cash just sitting there waiting for you. . . No matter who you are, rich or poor, black or white, employed or unemployed, as long as you are a U.S. citizen, you can apply for funding faster than you ever dreamed possible. Go ahead, request this CD today and get started on your path to finding and applying for the funding you’re seeking.
In order to convince consumers they are likely to receive grants by using Defendants’ grant product, in numerous instances Defendants include on their grant sites testimonials from happy consumers who supposedly used the grant product to receive funds to fix a car, pay utility bills, avoid foreclosure, buy Christmas presents, and pay for emergency expenses. In doing so, Defendants represent that consumers who use the grant product are likely to obtain grants such as those obtained by the happy consumers.
In fact, consumers are not likely to find and obtain grants using Defendants’ grant product as there are few, if any, government grants for individuals to pay personal expenses. Moreover, Defendants did not possess and rely upon a reasonable basis to substantiate their representation that consumers are likely to find and obtain government grants for personal expenses using the Defendants’ grant product.
Consumers are not likely to obtain grants such as those obtained by the consumers in the testimonials. The individuals quoted in the testimonials received funds only from a nonprofit organization [redacted]. The only manner in which Defendants add a caveat to their testimonials is by way of a small asterisk at the end of each testimonial. If consumers can even see the fine print at the bottom of the web page, they will only find Defendants’ tiny disclosure that “Results May Vary,” which does nothing to correct the representation that consumers using the grant product are likely to obtain grants such as those obtained by the happy consumers. Moreover, many of the sites contain one or more testimonials that are false or bogus.
In numerous instances, Defendants lure consumers through websites that tout money-making opportunities that are likely to yield significant income. Their typical make- money website promises that consumers can generate large amounts of income via Internet search engine advertising on Google, through rebate programs and auctions on sites such as eBay, and by using new technologies, such as Twitter. Defendants offer information regarding the make-money opportunities, purportedly for a nominal fee of $1.99 or $2.99 for shipping and handling. As with the core grant product, consumers submit their billing information to pay the small fee. Having procured consumers’ account information, Defendants immediately enroll their victims in Negative Option Plans for online memberships for both the core make-money product and for other unrelated products that are automatically bundled with the make-money product as Forced Upsells, and proceed to impose significant one-time and recurring charges.
Defendants’ make-money websites represent that their product offers its members “Easy Money,” and the opportunity to “[s]top living paycheck-to-paycheck.” For example, an offer marketing Internet search engine opportunities proclaims that “Now ANYONE can learn how to earn $200-$943 per day or MORE on Google!” Another of Defendants’ websites states that one can “learn how to make $199 per day or more” with “our simple system” that has “everything you need to make guaranteed fast money on Google. Your cost + $0.”
Spam emails sent by Defendants’ agents make the same claims. For instance, Raven Media using one of Defendants’ maildrop addresses in Nevada and a subject line “Easy Money with Google,” promises that “anyone can learn how to earn 200 – 943 per day or More!” 17 376. The I Works Media Center includes ready-to-send emails with claims for Defendants’ money-making products. For instance, one email states that “with this FREE kit, you can make up to $500, $1,000, even $3,000 every month ONLINE!” Another email proclaims “My ‘Growing Rich with Google’ CD reveals how to Make extra income from home. Get your FREE copy today!”
By providing a specific range of money that the consumer will “learn to earn,” Defendants represent that the typical consumer who uses Defendants’ money-making product can expect to achieve that level of income.
In fact, Defendants’ make-money representations are false. Typical consumers who use Defendants’ make-money products will not earn $200-943 or more per day using Defendants’ products. Moreover, Defendants did not possess and rely upon a reasonable basis to substantiate their representations that consumers can expect to earn these amounts per day.
In addition to extravagant claims about getting federal grants or substantial income via Internet search engine advertising, auctions, or other money-making products, Defendants further entice consumers by emphasizing that, except for a nominal fee of as little as $1.99 or $2.99 to cover the shipping and handling of a CD, what Defendants are offering is “free.” Thus, large banners encourage consumers to “Order your FREE CD today” and “Get your FREE Software” that has information on how to receive government grants or make money. For instance, one of Defendants’ money-making sites claims that “Our FREE CD shows how to beat the system.” If Defendants make any reference to the Forced Upsells, they are referred to as bonus “gifts.”
In order to reassure consumers and convince them to enter their billing information for the small amount, Defendants expressly assert that their free offers are “risk free.” Typical representations by Defendants include: “Get Instant Access To Your Risk-Free Google Software . . .”; “Get Our Risk-Free Grant Software Kit”; “Information worth thousands of dollars! It’s Yours Now RISK FREE!” and “Claim Your Risk-Free CD . . . .”
To further emphasize the ostensibly free and risk-free nature of their offers, Defendants often include tables detailing that the consumer’s TOTAL monetary outlay is only the nominal shipping and handling fee. Defendants’ tables identify that all other items, including a CD with product information, access to online tutorials, and unlimited customer support, are free or are included with the payment of a nominal shipping and handling fee. Sometimes the tables include a reference to “bonus” products, which Defendants also list as free.
In many instances, Defendants attempt to create a sense of urgency. Defendants’ websites represent that only a few CDs are available, or that it is a “Limited Time Offer.” Furthermore, some of Defendants’ marketing websites actually incorporate a clock that counts down the number of minutes and seconds consumers have left to respond to Defendants’ offer.
In fact, Defendants’ offers are not “free.” Consumers who provide their billing information to pay a nominal fee are likely to be charged much more than the small fee because I Works charges additional recurring and other fees that are poorly disclosed, if at all, in tiny, hard-to-read print. Thus, consumers who agree to pay the small shipping and handling fee will be charged a one-time fee of as much as $189 and then monthly recurring fees of as much as $59.95 if consumers do not cancel within as few as three days. Nor are the offers “risk-free.” To the contrary, Defendants forcibly enroll consumers in Upsell memberships they know nothing about and that they never intended to order, for which Defendants impose additional monthly charges or debits of as much as $39.97. In short, because of Defendants’ practices, consumers run the risk of not understanding the true nature of the transaction: enrollment in a Negative Option Plan for an online membership that requires consumers to take affirmative action to cancel memberships most consumers did not know they had. – Source
So There You Have It
Unfortunately consumers lose yet again. But at least in this case the Federal Trade Commission seems to have really worked hard to bring an extensive complaint against Jeremy Johnson and others to stop the charade.