F.T.C. v. FIVE-STAR AUTO CLUB, INC., 97 F.Supp.2d 502 (S.D. NY 2000)

FTC v. Five-Star Auto Club, Inc.

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The U.S. District Court for the Southern District of New York ruled, after a trial on the merits, that Defendants, on their own and through representations by independent contractors, violated Section 5 of the FTC Act by making false and material claims that consumers participating in the Five Star program could lease their “Dream Car for Free" and earn a substantial income. The court further ruled that Defendants were operating a pyramid scheme and therefore violated the FTC Act by failing to disclose material information that because of Five Star's pyramid structure, the majority of participants had not and could not achieve the promised car or income.

The entire case can also be found online at: http://www.mlmlegal.com/legal-cases/FTC_v_FiveStarAutoClubInc.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:Federal, 10th Circuit, Utah | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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