AP NEWS

FTC says people lured by real-estate secrets left in ruin

November 6, 2019

SALT LAKE CITY (AP) — The Federal Trade Commission has sued a company accused of using house-flipping TV celebrities to lure people into spending thousands on expensive training workshops that purported to share lucrative secrets but instead left many in financial ruin.

The agency and the Utah Division of Consumer Protection filed the federal complaint in Salt Lake City Tuesday asking a judge to stop the selling of seminars by Nudge, LLC.

Their ads promised insider tips from stars of shows like Bravo’s “Million Dollar Listing Los Angeles” and HGTV’s now-defunct “Renovate to Rent,” but the FTC said the seminars that cost up to $40,000 gave only general advice. Most people paid more to the company than they made in real-estate profits, the complaint said.

“These defendants presided over a sales process that started with empty promises of future wealth and ended with many consumers left in financial ruin,” Andrew Smith, FTC Bureau of Consumer Protection director, said in a statement.

No TV real-estate gurus are accused in the complaint. Bravo didn’t immediately return messages seeking comment, and HGTV said it’s not involved with stars’ business associations.

The company, meanwhile, plans to fight the suit. Nudge didn’t promise any earnings and many people were happy with the information they got, said attorney Jeffrey Knowles.

“At all phases of this, significant valuable information is delivered,” Knowles said. The company provided education on real-estate investing, but couldn’t control how much money people made when they tried their hands at it, he said. The Better Business Bureau doesn’t list any complaints against the company on its website.

“This is their one-sided, negative characterization .... it doesn’t match the reality of what’s actually happening,” he said.

The FTC said in court documents the company made $400 million between 2014 and 2017, initially offering free workshops pitched by TV personalities from a wave of stylish shows about people making a living buying and selling houses.

Nudge’s free seminars were essentially a sales pitch for a three-day workshop that cost about $1,100, which could lead to “advanced training” seminars costing up to $40,000, the FTC said. There, people were offered properties pitched as discounted deals with prices that were actually inflated, the agency said.

The complaint was also filed against executives and two Nudge affiliates, Response Marketing Group, LLC and BuyPD, LLC. They’re accused of violating federal telemarketing sales rules as well as Utah laws.