CLEVELAND, Ohio (WOIO) – Business opportunity scams are costing budding entrepreneurs millions.
The 2024 numbers are in and the Federal Trade Commission says median losses have jumped from $700 to more than $2200 from the previous year.
Tens of millions of dollars in losses come from customers of a scam run by a business that the FTC says was offering digital courses for thousands of dollars, then ghosting.
The local FTC office is now taking steps to stop accused modern snake oil salesmen, alleging a company called Growth Cave took in $50M with deceptive sales tactics.
“I got a PSA for anybody curious, looking into doing business with growth cave. Don’t do it,” said one YouTube user.
A quick search for ‘Growth Cave’ on YouTube and you’ll find a host of users posting their reviews on Growth Cave.
The company offered digital education programs that promised to help customers grow their business and earn twenty thousand to fifty thousand in passive income.
“He stresses the pain points of the ads biz and makes far-fetched promises of $10,000 a month income guarantees because he’s had this success. He lures you in claiming you can do it too, with even the most unprofitable ideas,” said another YouTuber.
Sammi Nachitgal with the f-t-c says growth cave advertised their Knowledge Business Accelerator via YouTube, and ask consumers to spend tens of thousands on tools to better reach new customers.
“They were saying, you know, it’s impossible to fail or you’re guaranteed profit of $10,000 and that’ll recoup what you’re spending to join the program. Those kinds of guarantees should definitely be a red flag for consumers,” said Nachitgal.
But the FTC says countless consumers were convinced by positive reviews from growth cave employees posing as satisfied customers-which violates the newly enacted consumer review and testimonial rule.
Nachtigal says victims were told they’d be making money within four to six weeks using customized programs to help grow their businesses.
“They would make a lot of promises about. We’ll help you get all this set up. We’ll help, you know, launch your business and none of that actually happened, right? It was about making the sale and then disappearing,” she said.
As a result of the FTC lawsuit, a federal court has halted operations of Growth Cave.
While the court order is in place, the operators can’t just rebrand and go after more consumers.
They are prevented from any activity that falls under the court order. If you think you’re a victim of a scam, contact the Cuyahoga County Scam Squad or report it at reportfraud.ftc.gov.
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