Russell T. Dalbey

Three easy steps, and a testimonial problem

Russell Dalbey founded and fronted “Winning in the Cash Flow Business,” a program sold mainly through a 30 minute infomercial from around 2002, hosted by the television personality Gary Collins. It taught buyers to find, broker and earn commissions on seller financed promissory notes, in three steps the advertising called “Find ‘Em,” “List ‘Em” and “Make Money.”

One infomercial claimed: “you’ll be amazed at just how easy it is to generate a stream of extra income every month… Order now and you’ll be ready to profit in minutes.”

The numbers in the testimonials

The advertising carried testimonials claiming “$1.2 million in 30 days,” “$79,000 in a few hours” and “$262,216 part time.” The FTC and the Colorado Attorney General alleged those figures were atypical and sometimes false, and that some testimonial earnings were totals accumulated over several years presented as if earned in one.

They also charged something sharper: while Dalbey claimed to have earned substantial money brokering notes himself, most of his note related income for two decades came from selling products teaching other people to do it.

One testimonial giver, Marsha Kellogg, was charged for claiming she earned $79,975.01 on a single transaction and more than $134,000 in total, when she had earned $50,000 less than claimed. Her settlement was the FTC’s first against a consumer for misrepresentations in a testimonial.

What buyers paid

The initial program cost roughly $40 to $160, after which telemarketers encouraged buyers to spend hundreds or thousands more on multi-day seminars, coaching sessions and note holder lead lists. Almost one million consumers bought from the Dalbeys’ Westminster, Colorado company. Very few made the money promised.

The settlement

The 2013 order bans Russell and Catherine Dalbey from telemarketing, from marketing or selling business opportunities, and from producing or distributing infomercials. It carries an agreed $330 million judgment, suspended once they surrender their assets, with sworn financial statements and repatriation of foreign assets required. Their three companies are jointly and severally liable and had filed Chapter 7 bankruptcy in September 2011.

What is not established

A stipulated order resolves allegations without any admission or finding of wrongdoing.