Call a time-out before investing in "coaching"

Coaching isn’t just about clipboards, lanyards, and saying “Listen up” a lot.  What do winning coaches bring to a team? Leadership, personal attention, and a proven system for success.  The people who spent more than $100 million on “coaching” services sold by Ivy Capital and related companies thought that's what they were buying.  But according to an FTC lawsuit filed against dozens of defendants — and a settlement with all but five of them — that’s not what Ivy Capital delivered.

The FTC alleged that Ivy Capital’s telemarketers called people who had responded to email or ads for work-at-home or web-based business opportunities.  But the “ads” originated from phony companies Ivy Capital set up to generate sales leads.  Fast-talking telemarketers promised that people could make thousands of dollars by working just 5-10 hours a week from home.  Once consumers signed up, the defendants really put the pressure on with sales calls from affiliated companies claiming to offer access to credit, expert tax advice, and additional “coaching” — for thousands more.

According to the FTC, the defendants conned entrepreneurs into maxing out their credit cards (some to the tune of $20,000 or more) on services that either didn’t exist or couldn’t possibly meet the earning expectations the defendants fostered.  The coaches didn’t have the promised expertise, didn’t have experience setting up businesses, and didn’t have any relevant education or training. Furthermore, the website-building programs Ivy Capital peddled didn’t work.  Those lawyers and accountants Ivy Capital said were at the ready to help?  They didn’t exist.

What about people who wanted their money back?  The FTC says the defendants made misleading statements about refunds or failed to disclose their refund policies.  For some buyers, Ivy Capital conditioned refunds on promises not to say anything bad about the company.

The settlements put provisions in place to protect consumers in the future, including a requirement banning the defendants from selling or otherwise benefitting from customer information.  The orders also impose a $130 million judgment against multiple corporate defendants and individuals, but much of it will be suspended due to their inability to pay.  To satisfy as much of the judgment as possible, the defendants will have to turn over assets, including bank accounts, real estate, and cars.  The full judgment will become due immediately if they’re found to have misrepresented their financial condition.

What’s that mean for Ivy Capital’s customers?  For right now, it’s still wait-and-see because litigation continues against other related defendants.  Questions?  Call the FTC’s information line at (202) 326-3771.

What should entrepreneurs consider before investing in business opportunities?

  • If you’re searching for a real coach to help take your business to the next level, look closer to home — and don’t invest a dime.  Approach successful entrepreneurs in your community.  For the cost of a cup of coffee, they may be willing to offer insights into what worked for them.

  • Many government agencies have programs that pair up people just starting out with experienced executives eager to share their know-how.  Some community colleges have small business centers where you can get free advice and business counseling.  Just type in a zip code and the Small Business Administration can point you to resources in your area.

  • Lots of companies — Ivy Capital included — sell information that’s already available for free.  You don’t need to pay big bucks to learn the basics of opening an online business or selling merchandise on auction sites.  Most offer free tutorials on how to get started.

  • Thinking about investing in a business opportunity?  No successful entrepreneur would ever make that call on their own.  Run any proposal past trusted colleagues who knows a thing or two about business.  But there's one person you should include in those candid conversations:  anyone who stands to make money from your decision.

  • Thanks to a new rule that went into effect last year, sellers of certain kinds of business opportunities have to give prospective buyers a one-page form with information about legal actions, refund policies, earnings claims, and other facts to consider.  Find out more about using this document to evaluate if a bizopp is a deal or a dud.

  • Don’t make a move without visiting the FTC’s new site packed with free resources about working from home and evaluating business opportunities.

 

4 Comments

>> Leave a Comment | Commenting Policy

Thank you for helping

how can one say there is a common thread uniting ALL types of coaching? that would be to say that ALL coaching services offered have the the consumer's success as priority when i can assure you that many so called coaching services priority is to scam you out of thousands of dollars. a 10 minute phone call once a week does not qualify anyone as a "coach." there is never an "all" of any business that shares a common thread because where there is good there is also bad and i don't think the good coaching services would like to be classified with the bad coaching services. no, the coaching service i encountered didn't enable success for my life or work.... just the opposite they enabled failure. i fail to see the common thread uniting all types of coaching services.

In the current state of our economy, more than 15 million people are unemployed. That's 15 million people who are all looking for a little help, whether it's in the job search, writing a résumé, interview advice, networking or even finding a new career path.
Many times, people who need job-search help enlist a professional. Career coaches and counselors are usually certified professionals who focus on career exploration or choice, changing career paths or helping you beef up your résumé and perfect your interview skills.

The common thread uniting all types of coaching & mentoring is that these services offer a vehicle for analysis, reflection and action that ultimately enable the client to achieve success in one more areas of their life or work.

Leave A Comment

Don't use this blog to report fraud or deceptive practices. To file a complaint with the Federal Trade Commission, please use the FTC Complaint Assistant.

PRIVACY ACT STATEMENT: It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act and the Federal Information Security Management Act authorize this information collection for purposes of managing online comments. Comments and user names are part of our public records system, and user names are also part of our computer user records system. We may routinely use these records as described in our Privacy Act system notices. For more information on how we handle information that we collect, please read our privacy policy.