An FTC administrative proceeding has been filed against the Internet Marketing Group, Inc., and affiliated businesses OneSetPrice, Inc., RPM Marketing Group, Inc., National Events Coordinators, Inc.; First Choice Terminal, Inc.; First Choice Terminal, Inc.; and B & C Ventures, Inc., on behalf of consumers who bought into multipurpose public access Internet terminal and telephone calling card business ventures since August 2001. The action accuses the defendants of making false and unsubstantiated earnings claims, and misrepresenting their cancellation and refund policies, in violation of the FTC's Franchise Rule and Telemarketing Sales Rule. The action seeks unspecified compensatory and punitive damages.

A federal district court in Tennessee has now stopped the common enterprise of seven corporations and five individuals from continuing to operate an illegal business opportunity scheme which has marketed telephone calling cards and multi-purpose public access Internet terminal business ventures to consumers nationwide since August of 2001. In their sales seminars and promotional materials, the defendants allegedly made false and unsubstantiated earnings claims, and misrepresented their cancellation and refund policies. The defendants also allegedly failed to provide consumers with timely, complete, and accurate disclosure statements and earnings claims documents as required by the Franchise Rule. In addition, the defendants’ telemarketing campaign resulted in numerous violations of the FTC’s “Do Not Call” provision of the Telemarketing Sales Rule.

The court has appointed a temporary receiver and frozen the defendants’ assets. The temporary restraining order issued by the court names Internet Marketing Group, Inc., based in Lebanon, Tennessee; OneSetPrice, Inc., RPM Marketing Group, Inc., and National Events Coordinators, Inc., all based in Orlando, Florida; First Choice Terminal, Inc., based in Baton Rouge, Louisiana; First Choice Terminal, Inc., based in Scottsdale, Arizona; and B & C Ventures, Inc., based in Reno, Nevada. The individual defendants are David G. Cutler, Cindy Gannon, Paul D. Bonnallie, Tisa Christiana Spraul, and Michael J. Hatch.

The FTC’s complaint alleges that the defendants, acting as a common enterprise, have marketed and sold the business opportunities at prices ranging from $12,995 to $249,950. The defendants sell their business ventures to consumers at weekend sales seminars or “shows” held at hotels throughout the United States. Consumers receive pre-recorded telemarketing messages inviting them to attend the shows and directing them to call a toll-free “reservation” number to receive show invitations, directions, and discount certificates. The defendants’ shows are conducted in stages: First, there are general sessions where an overview of the business venture is presented. Through written applications and a “point” system for rating prospects, potential purchasers are selected as “qualified” and invited to attend at least one additional detailed session. The defendants then allegedly pressured qualified purchasers to sign a purchase agreement and make a payment towards franchise ownership.

According to the FTC’s complaint, the defendants have engaged in the following deceptive practices:

Beginning in August 2001, the defendants marketed and sold OneSetPrice (OSP) business ventures involving the distribution of telephone calling cards, with prices ranging from $12,995 to $71,120. In its promotional materials and at its shows, OSP allegedly misrepresented that OneSetPrice calling card distributors could earn substantial amounts of money, not only through initial sales of the cards, but from “recharges” of calling cards when the initial pre-paid time expired.

Beginning in September 2003, the defendants sold First Choice Terminal business ventures involving the ownership and operation of public-access Internet terminals. The terminals sold from $15,995 to $249,950. Consumers were told that Internet terminal owner-operators would earn substantial amount of money through vending Internet and telecommunications services from Internet terminals to the public, as well as from selling advertising facilities on the terminals themselves.

By the end of 2003, the defendants moved their base of operation out of Florida to Tennessee. Beginning in January 2004, the defendants, acting through defendant Internet Marketing Group, sold business ventures involving the ownership and operation of multi-purpose, public-access Internet and telecommunications terminals, ranging in price from $15,435 to $127,495.

During their sales presentations, the defendants allegedly promised to provide refunds to purchasers under specified terms and conditions. Each company promised to provide a high degree of assistance to prospective purchasers, including training, marketing, accounting and technical support. The complaint alleges that the defendants misrepresented the consumers’ rights to rescind or cancel their purchase agreements and receive refunds. In addition, the defendants allegedly failed to provide timely, accurate, and complete basic disclosure statements or earnings claims documents, as required by the Franchise Rule.

Finally, the complaint alleges that, on October 17, 2003, as part of their telemarketing campaigns, the defendants made many calls to private residential telephone numbers that were registered on the FTC’s National Do Not Call Registry prior to August 31, 2003. The complaint also alleges that, before then, the defendants violated several state “No Call” telemarketing laws, as well.

Persons who bought into any of these business ventures may be eligible to benefit from the action, and should contact the attorneys who are prosecuting the case.