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The Federal Trade Commission is taking action against DK Automation and its owners, Kevin David Hulse and David Shawn Arnett, for using unsubstantiated claims of big returns to trick consumers into making money involving Amazon business packages, business coaching and cryptocurrency. FTCs complaint alleges that the defendants promised consumers that they could “generate passive income on autopilot” when the truth was that few consumers were making money from these programs.

“DK Automation ripped off consumers by manipulating reviews and making empty promises of big returns on cryptocurrency investment schemes and bogus trading schemes,” said Samuel Levine, director of the Consumer Protection Bureau. of the FTC. “They ignored warnings that these practices were illegal, and now they are paying the price.

A proposed court order would compel the defendants to hand over $2.6 million to be used to reimburse consumers harmed by their deception, as well as compel them to cease their deceptive revenue claims and obey the law.

The FTC’s complaint notes that the defendants continued to use misleading tax returns even after receiving notices of criminal violations regarding money-making opportunities and endorsements of the agency.

Defendants sold their Amazon programs under different names, including AMZDFY, Amazon Done For You, and Amazon Done With You. According to the complaint, they promised consumers a “100% turnkey” business selling products on Amazon and charged consumers up to $100,000 for the program. Their marketing and sales pitches were filled with fake consumer reviews touting huge profits.

In addition to Amazon’s trading packages, the defendants also showcased alleged cryptocurrency investing services that included their “secret #1 passive income crypto trading bot,” which they claim could “generate benefits for you even while you sleep”. The complaint alleges that they charged consumers thousands of dollars for the alleged service. A FTC June 2022 Data Spotlight showed that over a 15-month period, consumers reported losing $575 million to cryptocurrency investment scams.

The FTC complaint alleges that the defendants in the case harmed consumers by:

  • Mislead them about potential gains: DK Automation and its owners made multiple claims about the supposed huge profits consumers could make with their programs, using testimonials that did not reflect the experience of any consumer in the FTC investigation. When they included disclaimers, the complaint alleges they were in such small print or removed from the claims that they were essentially useless to consumers.
  • Removal of negative reviews: In many cases, the company manipulated online reviews by falsifying positive reviews and flagging negative reviews which resulted in their removal. Additionally, the company agreed to reimburse consumers on the condition that they withdraw their complaints. Finally, the FTC accused the defendants of threatening to sue a disgruntled consumer who spoke about his negative experience with the company and added language to their contracts to prevent consumers from leaving negative reviews.
  • Failure to provide required information: Defendants have consistently failed to provide consumers with the information required by the FTC’s Business Opportunity Rule when selling their programs. These mandatory disclosures include key information that can help consumers get a complete picture of the opportunity being sold to them.

Enforcement measures

The defendants accepted a proposed court order that would require them to:

  • Back up their claims: Defendants would be prohibited from making consumer revenue claims that are misleading, and they would be required to have information in writing to back up their claims.
  • Stop misleading consumers: They would also be prohibited from misleading consumers about the nature of any good or service they are selling, including the likelihood of profits, if the testimonials reflect a normal consumer’s experience or other key information.
  • Stop interfering with reviews and complaints: Defendants would be prohibited from taking actions that restrict consumers’ ability to file complaints or leave negative reviews, including requiring consumers to sign contracts that limit their ability to file complaints.
  • Provide money for refunds: Defendants would be required to provide at least $2.6 million to the FTC to use to reimburse consumers.

The order includes a total monetary judgment of nearly $53 million, which has been partially stayed due to inability to pay. If it turns out that the defendants lied about their financial situation, the full amount of the judgment would be immediately due.

The Commission’s vote allowing the staff to file the complaint and stipulating the final order was 4-0. FTC Files Complaint and Final Order in the United States District Court for the Southern District of Florida.

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