A reader sent me an email and wanted to know what I thought about the recent press release and debt relief business opportunity that a company named Wealth Network Solutions had sent out.
The press release seems typical. The company, Wealth Network Solutions, says they have a new web site and help people to deal with their debt.
The release quotes Sherriden May, “Millions of people are trapped in a cycle of debt and they don’t know how to get out. What we do is help them find the right solution for any type of debt. We offer multiple services that can assist them.” – Source
But here is where it gets really hinky, “In addition to helping people resolve their debt, the company also offers affiliate packages, allowing people to start their own business to help those in debt.”
The Wealth Network Solutions business opportunity page says, “Our enrollment has a one time setup fee of $495.00, which includes your website, training materials and unlimited product development and support. Our $24.95 monthly maintenance fee gives you unrestricted access to our marketing development department and your real-time back office updates.”
What is entirely unclear is how plans to avoid the massive liability of providing substantial assistance to potentially unlicensed debt relief sellers.
According to the Wealth Network Solutions solutions page they are marketing solutions for credit repair, student loan debt, and credit card debt through their business opportunity / affiliate solution. I sure hope they’ve already sorted through the issues with the Credit Repair Organizations Act and advance fees, the Telemarketing Sales Rule (TSR) and advance fees, and the new issues surrounding the marketing of student loan assistance and it’s coverage under the TSR.
I’ve reached out to the company for more information but until then I would urge anyone interested in this business opportunity to follow the general advice offered by Federal Trade Commission when it comes to buying into a business opportunity. From what I can see on the Wealth Network Solutions website it appears the company would fall under the Business Opportunity Rule which provides the following advice:
What’s required. If a transaction falls within the Rule, a seller has three key legal responsibilities:
- You have to give the buyer a one-page Disclosure Document. And you have to provide this document seven days before the prospective buyer signs a contract or pays any money for the business opportunity.
- If you make an earnings claim, you have to give the prospective buyer a separate document that says across the top EARNINGS CLAIM STATEMENT REQUIRED BY LAW.
- You have to comply with general truth-in-advertising principles, including avoiding deceptive practices. The Rule spells out a list of some “dos” and “don’ts.”
The Disclosure Document
At least seven days before prospective buyers sign a contract or pay any money for a business opportunity, you have to give them a one-page Disclosure Document that lists five key pieces of information. To keep things simple for you and the buyer, you must use the standard form. It’s available at business.ftc.gov/businessopportunitydisclosure.
What do you have to disclose on that form?
- Identifying Information. You have to list your company’s name, business address, and phone number; the sales person’s name; and the date you gave the document to the prospective buyer.
- Legal Actions. You have to disclose whether your company or certain key personnel have been the subject of civil or criminal actions involving misrepresentation, fraud, violation of the securities laws, or any unfair or deceptive practices – including violation of any FTC rule – within the past ten years. If the answer is yes, you have to attach a list of the actions to the Disclosure Document.
- Cancellation or Refund Policy. You have to check a box to say if you have a cancellation or refund policy. If you do, you have to attach to the Disclosure Document a statement describing your policy.
- Earnings. You have to check a box to say if you’ve stated – or implied – how much money a prospective buyer can earn. If you have, you must attach an Earnings Claim Statement to the Disclosure Document.
- References. On the Disclosure Document, you have to list contact information for at least 10 people who have bought a business opportunity from your company. If more than 10 people have bought a bizopp, you may list the 10 who live closest to the prospective buyer. If fewer than 10 people have bought the bizopp, you have to list everyone. Also, you have to update the list every month, until 10 people have bought the bizopp. In addition, the Disclosure Document must say clearly and conspicuously: “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.”
A few more things about the Disclosure Document: The prospective buyer has to sign, date, and return the form to you. You have to make sure you’ve attached any other documents the Rule requires. You have to update the form every quarter. And if you promote your business opportunity in a language other than English, the one-page Disclosure Document – along with the required disclosures – must be in that language. The Spanish-language form is available at business.ftc.gov/businessopportunitydisclosure. Furthermore, if you tell a prospective buyer something in person, in an email, over the phone, or in any other ad or promotion, make sure it doesn’t contradict what you say in your written disclosures. It’s illegal to make contradictory oral and written statements – and it just creates confusion.
The Earnings Claim Statement
If you make a claim expressly or by implication about how much money a person can earn from your business opportunity, you have to put the claim in writing. Furthermore, it’s illegal to make an earnings claim unless you have written materials on hand that back up what you’re saying. You have to make those materials available to a prospective buyer or to the FTC if they ask for them.
If you make an earnings claim, you have to give the prospective buyer a separate document that clearly says across the top EARNINGS CLAIM STATEMENT REQUIRED BY LAW. What has to be on that document?
- The name of the person making the claim and the date;
- The specifics of the claim;
- The start and end date those earnings were achieved;
- The number and percentage of your buyers who got at least that result;
- Any information about the buyers who got those results that might vary from prospective buyers – for example, where they’re located; and
- A statement that prospective buyers can get written proof for your earnings claims if they ask for it.
What about earnings claims made online, on TV or in newspapers, or in other media? The Rule is clear: You must have written proof on hand that supports your representations, and you have to disclose certain information when you’re making the claim – for example, the start and end dates the earnings were achieved and the number and percentage of your buyers who got at least that result. What if you make general statements about earnings or talk about the performance statistics in the industry? You’ll need to have written proof on hand showing that the results for the opportunity you’re selling are at least as good. Read the Rule for the specifics.
What if the information you previously provided to a prospective buyer in the Earnings Claim Statement substantively changes? You have an obligation to let the prospective buyer know what those changes are, in writing, before the prospective buyer signs a contract or pays you any money. And like the Disclosure Document, if you promote your business opportunity in a language other than English, your Earnings Claim Statement has to be in that language, too. – Source
Email Bounced and More
Wealth Network Solutions listed their contact address in their terms as [email protected] and my email to them, bounced. “The error that the other server returned was: 550 No Such User Here”
And just an FYI, the website is listed as being owned by a Trinket Clifford.
The website for Wealth Network Solutions at wealthnetworksolutions.com does not appear to list their location. Yelp says the company is located in Arizona. A search of the business registrations in Arizona could not find the company registered there. If anyone has any additional information on this company, please post a comment below or contact me on the site.