WASHINGTON — The recession has killed jobs by the millions, but it's been a boon to one sector of the population: con artists.
They've been offering consumers help in repairing bad credit, landing new jobs, starting lucrative work-at-home businesses and obtaining government money to pay off bills. These scams -- which are surging along with the jobless rate -- are touted on websites and infomercials, and have bilked consumers out of hundreds of millions of dollars, said David C. Vladeck, director of the Federal Trade Commission's Bureau of Consumer Protection.
Federal officials, working with authorities in California and other states, struck back Wednesday. They announced a series of civil and criminal charges against alleged con artists who have preyed on economic anxiety to lure consumers into making upfront payments for services that either fall far short of the promises or never materialize.
"Rising unemployment, shrinking credit, record-setting foreclosures and disappearing retirement accounts are causing consumers tremendous anxiety about making ends meet," Vladeck said Wednesday at a news conference at the FTC. "But to con artists, today's challenging economy presents an opportunity to exploit consumers' fears and bilk them out of money."
Vladeck said that more than 100 cases have been filed nationwide this year as part of Operation Short Change, a task force consisting of the FTC, the Department of Justice and officials in 13 states and the District of Columbia. The cases included eight filed Wednesday by the Federal Trade Commission.
One of the FTC's new cases alleged that five Van Nuys companies had bilked consumers out of about $300 million by selling fraudulent programs related to real estate or online businesses.
The companies -- John Beck Amazing Profits, John Alexander, Jeff Paul, Mentoring of America and Family Products -- and five people who had founded or run those companies were accused of violating federal laws related to telemarketing and consumer fraud.
The FTC accuses the companies of making "false and unsubstantiated claims about potential earnings" that customers could make by following their advice in books, CDs and DVDs titled "John Beck's Free & Clear Real Estate System," "John Alexander's Real Estate Riches in 14 Days" and "Jeff Paul's Shortcuts to Internet Millions," which were sold for $39.95 each.
