Utah AG Lauds State’s Largest Consumer Protection Settlement

Troutman Pepper

[co-author: Stephanie Kozol]

On May 19, Utah Attorney General Sean Reyes announced a consumer settlement with Response Marketing Group LLC and its principals for $15 million and a lifetime ban against selling money-making products and training services nationwide. The settlement — the largest ever for the Utah AG’s consumer protection division — concluded a case brought by the Federal Trade Commission (FTC) and the Utah AG’s office (representing the Utah Department of Commerce – Division of Consumer Protection (DCP)), alleging violations of the FTC Act, the Telemarketing Sales Rule, and several Utah statutes. Two Response Marketing celebrity endorsers also agreed to pay $1.7 million in redress cumulatively.

Through infomercials and social media advertising, Response Marketing attracted consumers to free nationwide events, where celebrity endorsers promised to share their investing techniques. During these events, Response Marketing promoted additional three-day workshops for around $1,000, where it falsely offered access to special tools to become successful in real estate investing and deceptively pitched additional training programs, costing tens of thousands of dollars. Afterward, Response Marketing upsold its $30,000 “Inner Circle” coaching program to consumers through telemarketing. According to the FTC and the Utah DCP complaint, consumers attending these programs never became successful real estate investors, nor did they recoup their training costs.

In June 2022, the district court granted the FTC and Utah DCP’s motion for summary judgment, finding that “Response Marketing made false or misleading claims, such as telling consumers they would get offering customers special access to a funding network for real estate deals without using their own money, providing students with letters that would supposedly allow them to make discounted cash offers, and having buyers for houses they wanted to flip for flipped homes.” The May 2023 settlement order resolved all claims against the defendants.

Why It Matters

The Response Marketing case further illustrates Utah’s strong commitment in protecting its consumers’ rights. According to Utah Department of Commerce Executive Director Margaret Busse, this historic settlement “holds Response Marketing and its affiliates accountable for the serious financial harm to consumers across the country,” while also putting on notice “Utah businesses that seek to take advantage of consumers.”

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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