When it comes to house flipping, the buyer should always beware.
A house-flipping reality-show host and a life coach who has hawked self-help programs with Academy Award-winning actor Matthew McConaughey have agreed to pay hefty fines for promoting a real-estate-investment training course authorities say was aimed solely at selling increasingly expensive classes.
The Federal Trade Commission said the program, which was run by a Utah-based firm called Response Marketing Group LLC under names such Affluence Edu, Cash Flow Edu or Flip for Life, raked in more than $400 million in a three-year period. The company also operated under two affiliate names, Nudge LLC and BuyPD LLC.
The scheme relied on ads featuring real-estate TV celebrities like Scott Yancey of A&E’s “Flipping Vegas,” Doug Clark from Spike TV’s “Flip Men,” Drew Levin and Danny Perkins from HGTV’s “Renovate to Rent” and Josh Altman from Bravo’s “Million Dollar Listing Los Angeles” to promote the classes, the FTC said.
In 2019, the FTC filed a civil suit against Response Marketing and its executives, arguing they had made false claims of teaching customers how to get rich by flipping real estate. The following year, the FTC added Yancey and life coach Dean Graziosi, the author of “Millionaire Success Habits,” as defendants for their roles in promoting the program.
The other celebrity promoters were not named as defendants.
Graziosi recently teamed up with McConaughey and self-help guru Tony Robbins to pitch a seminar called “The Art of Livin’.”
An attorney who represented Response Marketing, its executives, Graziosi and Yancey in the case didn’t immediately respond to a message seeking comment. A message left with a spokeswoman for McConaughey also was not immediately returned.
Between 2015 and 2019, more than 700,000 people attended Response Marketing’s free introductory course, the FTC said. Some 70,000 of those agreed to sign up for the program’s three-day follow-up course for $1,000 each, the agency said.
Of those, an additional 30,000 agreed to pay as much as $40,000 more for courses that promised one-on-one coaching or access to an investment pool that would enable them to buy houses even if they had little or no money.
But FTC investigators say the courses did little beyond explaining the basics of real-estate investing and were primarily designed to upsell students on more expensive classes.
On Monday, the agency said Response Marketing and its owners had agreed to pay a $15 million penalty and to a ban on selling any money-making opportunities in order to settle the suit. Graziosi agreed to pay a $1.25 million fine and Yancey agreed to pay a $450,000 penalty.
The settlements with Graziosi and Yancey marked the first time celebrity promoters have ever been hit with fines brought by the FTC, the agency said.
The enforcement action was brought in partnership between the FTC and Utah’s Division of Consumer Protection.
“This is the largest consumer-protection division settlement in Utah’s history,” said Utah Department of Commerce Executive Director Margaret Busse. “This partnership gave us the reach to go after these bad actors who thought they could skirt Utah’s laws.”
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