FTC Issues Fortune Hi-Tech Marketing Pyramid Scheme Refunds

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The Federal Trade Commission has announced that it will be mailing more than 285,000 checks to consumers who lost money in a pyramid scheme operated by Fortune Hi-Tech Marketing.

Fortune Hi-Tech Marketing was charged with allegations that it used deceptive marketing about how much money could be earned by selling products and services. The FTC lawsuit was initially filed in January 2013.

The pyramid scheme lawsuit alleges Fortune Hi-Tech Marketing deceived consumers by claiming they would earn significant income by selling products and services if they signed up to be a Fortune Hi-Tech Marketing representative.

The alleged pyramid scheme required participants to pay substantial startup costs and monthly fees to maintain their positions with the company.

According to the FTC, the pyramid scheme targeted Spanish-speaking and immigrant communities.

The FTC lawsuit asserts that people could pay $250 to join Fortune Hi-Tech Marketing as a manager and that they had to pay $250 annually to maintain their positions.

New managers were allegedly “strongly encouraged” to purchase “starter packs” or “bundles” of health and beauty products, which reportedly cost between $130 and $400. Purchase of these products reportedly qualified a new manager to receive commissions for the sale of products and services.

Fortune Hi-Tech Marketing misrepresented its business as a way for average people to achieve financial independence, the FTC charged.

After the FTC lawsuit was filed, a court reportedly halted Fortune Hi-Tech Marketing’s deceptive practices and froze the defendants’ assets. An investigation was launched into the company’s business practices and it was determined that Fortune Hi-Tech Marketing’s primary business was the recruitment of new members and not selling and services.

More than 98 percent of participants reportedly lost more money than they made with Fortune Hi-Tech Marketing, and around 88 percent were unable to even recoup their enrollment fees.

Fortune Hi-Tech Marketing does not admit any wrongdoing but agreed to settle the pyramid scheme lawsuit with the FTC and the states of Illinois, Kentucky and North Carolina.

In addition to providing refunds to consumers and banning Fortune Hi-Tech Marketing from engaging in multi-level marketing, the settlement also prohibits Thomas A. Mills, Fortune Hi-Tech Marketing, FHTM Inc., Alan Clark Holdings LLC, FHTM Canada Inc. and Fortune Network Marketing (UK) Limited from making material misrepresentations about any products or services, including claims about how much consumers can earn.

The settlement order also prohibits any of the defendants from benefitting from customers’ personal information, failing to properly dispose of their information, and collecting additional money from customers.

If you receive a check, you should deposit or cash it within 60 days. According to the FTC, it is possible that more money may be available in the future, as there are still lawsuits pending against some of Fortune Hi-Tech Marketing’s highest-earning sales representatives.

If you have questions about the Fortune Hi-Tech Marketing pyramid scheme settlement, you may contact the refund administrator at 1-800-964-0978.

The FTC Fortune Hi-Tech Marketing Lawsuit is Federal Trade Commission, et al. v. Fortune Hi-Tech Marketing Inc., et al., Case No. 5:13-cv-00123, in the U.S. District Court for the Eastern District of Kentucky, Central Division at Lexington.

UPDATE: September 2018, the FTC mailed out a second round of checks from the Fortune Hi-Tech Marketing lawsuit totaling $1.85 million.