Smart Tools LLC
The FTC alleged that Smart Tools LLC deceptively sold a home-based government insurance refund processing opportunity with unsupported earnings claims and recurring charges. A settlement restricted its sales practices and required $234,847.
Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.
Identity
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- Registrations
- FTC v. Smart Tools LLC (FTC case 122-3212, 2012)
- Jurisdictions
- United States (federal)
Refund processing opportunity ended in a settlement
Smart Tools LLC and Kirstin Hegg sold a home-based business opportunity that promised buyers they could become “Government Insurance Refund Processors.” The FTC alleged that postcards falsely claimed consumers could earn up to $38,943 per year by locating people eligible for mortgage loan insurance premium refunds and charging them for information about obtaining those refunds.
Consumers paid $3.91 for a manual and incurred a recurring charge of $29.99 per month after a free trial for access to lists of refund-eligible people and refund-processing software. According to the FTC, Smart Tools and Hegg led consumers to believe those lists were not freely available, while the Department of Housing and Urban Development offered the same lists online without charge.
The FTC referred the complaint to the Department of Justice, which filed it on the Commission’s behalf in the U.S. District Court for the District of Oregon. The later settlement barred the defendants from failing to provide the disclosure form required by the Business Opportunity Rule. It also restricted unsupported earnings claims, material misrepresentations, continued billing without written customer consent, and misuse of customer information.
The order imposed a $7.4 million judgment that was suspended when the defendants paid $234,847. The full amount would become due if they were found to have misrepresented their financial condition.
What is not established
The supplied releases describe a consent judgment and do not state that the defendants admitted wrongdoing. They do not provide a total amount consumers lost, so claimed losses remain null.
Sources
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- Enforcement action November 15, 2012
- Enforcement action November 26, 2013
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First recorded November 15, 2012 · Last updated November 26, 2013