The Federal Trade Commission on Monday said it reached a $10.8 million settlement with two brothers who allegedly scammed prospective Amazon sellers for years with bogus coaching advice.
Adam and Christopher Bowser, who live in Massachusetts, agreed to the settlement after the FTC charged the brothers in March. The federal watchdog alleged the two were running the scam using their business, FBA Stores. Jody Marshall, who is listed as a coach for the Bowsers' business, was also part of the settlement. The agency will work to give back payments to those harmed by the scam.
As part of the settlement, the defendants neither admitted nor denied the allegations against them and got the bulk of a $102 million judgment against them suspended. They were also barred from future business coaching.
Attempts to reach the defendants were unsuccessful, since Adam Bowsers prior email address and FBA Stores' website were shut down. Amazon and Washington state's attorney general filed separate suits against the Bowsers in December and were working with the FTC on its case.
Amazon is aggressively fighting bad and illegal practices on its websites and services. The company has already pursued fake reviewers, sellers of counterfeit products and alleged fraudsters on its Kindle Direct Publishing platform. Going after FBA Stores could help Amazon show it's working to protect small businesses from such practices, too.
"We will continue to aggressively pursue those who harm our customer and seller experience," the company said in a statement Monday.
According to the Washington state filing, the Bowser brothers were running an alleged scam since 2009. They drew in people by offering free webinars or in-person workshops on how to sell on Amazon and routinely used Amazon's logos in their signs and brochures, the suit said, though they had no affiliation with Amazon. At these events, they persuaded people to pay $1,000 for three-day workshops.
At the workshops, they allegedly used aggressive sales tactics to get people to register for more coaching or seminars, which cost from $4,000 for the "Wholesale" package, up to $35,000 for the "Diamond Coaching Package."
However, many of the tips the Bowsers offered violate Amazon's terms of service and could result in sellers getting banned, the state suit alleged. The FTC also claimed most, if not all, purchasers didn't earn the income the Bowsers advertised, which was to make $5,000 to $10,000 a month.
People can contact the FTC by calling 1-877-FTC-HELP or file a complaint online at https://www.ftccomplaintassistant.gov/#crnt.
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