FTC Hits Real Estate Training Company With $17M Fine

A Utah real estate training company has settled with the Federal Trade Commission after being accused of making “false promises” to sell its programs.

Response Marketing LLC was ordered to pay $16.7 million as a result of Monday’s settlement with the FTC and the Utah Division of Consumer Protection, KSL reported. Investigators said it was the largest consumer settlement in state history.

Celebrity endorsers also agreed to pay dearly for their role in alleged activity. Scott Yancey of A&E’s “Flipping Vegas” will pay $450,000, while motivational podcaster Dean Graziosi will pay $1.25 million.

The alleged activity started with a predecessor company in the early 2010s. It didn’t stop until December 2019, when a formal complaint was filed with the FTC and the Utah Division of Consumer Protection.

Response Marketing attracted consumers to free events across the country through the use of infomercials and social media advertisements, according to the Utah Division of Consumer Protection. Once there, consumers were allegedly pitched three-day, $1,000 workshops, boasting the programs would provide “special tools” to make consumers into successful real estate investors.

Response Marketing also pitched even more expensive training programs that cost into the tens of thousands, according to the complaint. At one point, it allegedly promoted a coaching program called “Inner Circle” that could cost another $30,000.

The promises made by Response Marketing were false, though, according to the complaint. Many failed to become successful real estate investors and many also failed to recoup the money they lost to the company.

The owners of Response Marketing and its president are banned from selling “wealth creation” products and services across the country, according to the FTC.

To this point, $1.7 million has been recouped from litigation, leaving $15 million left to be returned to consumers. If Response Marketing fails to make that payment, it will also owe the Utah Division of Consumer Protection $15 million.

— Holden Walter-Warner