Scam Report

New Moves to Close $400m Real Estate Seminar Scam

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New Moves to Close $400m Real Estate Seminar Scam
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For the second time in about a month, the FTC sued a company that falsely promised it would show people how to earn money in real estate – after getting them to pay thousands of dollars for seminars.

In the latest case, the FTC filed a complaint against Nudge, a company that sells training programs and other services to aspiring real estate investors using industry celebrities to reel in potential victims.

Nudge encouraged people to attend one of its Preview Events through mailings and infomercials featuring TV personalities from shows like “Flipping Vegas,” “Flip Men,” “Renovate to Rent,” and “Million Dollar Listing Los Angeles.”

One infomercial featured a celebrity who promised to share a “formula for success” in real estate investing that was “proven” to get results. But these events were mainly sales pitches to get people to buy workshops costing more than $1,000.

What do you think happened at these expensive workshops? You guessed it: even more sales pitches — this time for “Advanced Training” costing tens of thousands of dollars.

In all, according to the FTC’s court filings, Nudge raked in more than $400 million from its pricey seminars. What’s more, an FTC survey of Nudge customers showed more than 95 percent of people who attended the seminars ended up paying more to Nudge than they cleared in subsequent real estate transactions.

According to the complaint, the scheme starts with advertisements featuring real estate television celebrities, including Scott Yancey from A&E’s “Flipping Vegas,” Doug Clark from Spike TV’s “Flip Men,” Drew Levin and Danny Perkins from HGTV’s “Renovate to Rent,” and Josh Altman from Bravo’s “Million Dollar Listing Los Angeles.” These advertisements, which promise celebrities’ insider tips on how to make money in real estate, allegedly have enticed thousands of consumers to attend free 90-minute seminars.

The FTC’s complaint charges that the free seminars are predominantly a sales pitch to spend more than $1,100 to attend a three-day workshop, where consumers will supposedly get access to a “system” for finding “lucrative” deals. Those promises also prove empty, as the three-day workshops largely consist of general information about real estate investing, misrepresentations about services offered by Nudge, and a sales pitch for “advanced training” that costs as much as $40,000, according to the complaint.

Until at least 2016, according to the complaint, the advanced training pitched by Nudge included access to so-called “Buying Summits” or “Investor Expos.” At these events, consumers were promised special access to properties at discounted prices for purchase. However, as alleged in the complaint, defendants typically sold or brokered the properties to consumers at inflated prices.

If someone says you can earn a lot of money on an investment with little or no risk, that’s probably a scam. Learn more about investment and business opportunity seminars before buying into the hype. And if you know about an investment scam, tell the FTC at ftc.gov/complaint.

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