FTC takes action against sites promising gov't grants

22.12.2010
The U.S. Federal Trade Commission has filed a lawsuit asking a court to stop a "far-reaching" Internet enterprise that allegedly made millions of dollars by luring customers into trial memberships for bogus government grants and money-making schemes, then repeatedly charging them monthly fees for memberships they never ordered.

The FTC announced Wednesday that it has filed a lawsuit in U.S. District Court for the District of Nevada against the Utah-based company I Works, owner Jeremy Johnson, nine other people, nine other companies and 51 shell companies. The FTC , asking the court to halt the business practices and refund customer fees, on Tuesday.

"No consumer should be sucker-punched into making payments for products they don’t know about and don’t want," FTC Chairman Jon Leibowitz said in a statement.

I Works did not immediately return a phone message seeking comment on the FTC allegations.

The defendants, through a series of websites, offer consumers bogus money-making and government-grant opportunities, saying the offers are free or risk free, the FTC said in a news release. The companies promise to charge customers only a small shipping and handling fee of US$1.99 to $2.99, the FTC said.

After customers provide their billing information, I Works then charges them one-time fees of up to $129.95 and monthly recurring fees of up to $59.95, the FTC said.