At FTC’s Request, Court Halts Massive “Sanctuary Belize” Real Estate Investment Scam


Spot and avoid scams and unfair, deceptive, and fraudulent business practices with tips from the FTC, America’s consumer protection agency.

Monopolization Collusion Formation of cartels Price fixing Bid rigging Product bundling and tying Refusal to deal Group boycott Essential facilities Exclusive dealing Dividing territories Conscious parallelism Predatory pricing Misuse of patents and copyrights.

Federal Trade Commission

On November 9, , the Federal Trade Commission (FTC) issued the

Please see related press kit with maps, video, and audio. According to the FTC, the scam was established by Andris Pukke, a recidivist scammer currently living in California, and he perpetuated it even while serving a prison sentence for obstruction of justice. According to the FTC, the defendants duped consumers into buying Sanctuary Belize lots by falsely promising that the development would include luxury amenities and be completed soon, and that the value of the lots would rapidly appreciate.

In filing the complaint against Pukke and a range of other defendants , the FTC is seeking to permanently stop the scheme and obtain a court order requiring them to turn over hundreds of millions of dollars to compensate deceived U. They also advertised the property through infomercials.

These telemarketers allegedly made six false claims in their pitches to sell lots in the development, including that:. The FTC alleges that SBE representatives in Belize made the same deceptive claims when they met with prospective buyers visiting the property before purchasing lots. The FTC contends that the development and the amenities will not be completed in the promised timeline, the value of the lots has not appreciated, and there is no resale market for the lots.

In addition to the Sanctuary Belize complaint announced today, the FTC has filed three contempt motions against several of the individual defendants, including Andris Pukke, who has a long history with the Commission. The order also required Pukke to turn over certain assets, including the Sanctuary Belize parcel.

The FTC has been involved in the oversight of the online advertising industry and its practice of behavioral targeting for some time. In , the FTC issued a comprehensive revision of its Green guides , which set forth standards for environmental marketing. The statute declares that "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. The FTC also has authority over unfair methods of competition between businesses.

First, "there must be a representation, omission or practice that is likely to mislead the consumer. A misleading omission occurs when information is not disclosed to correct reasonable consumer expectations. Finally the representation or omission must be a material one—that is one that would have changed consumer behavior.

In its Dot Com Disclosures guide, [12] the FTC said that "[d]isclosures that are required to prevent deception or to provide consumers material information about a transaction must be presented clearly and conspicuously. However, the "key is the overall net impression. The back of the check, in fine print, disclosed the existence of this agreement to the consumer. The FTC concluded that the practice was misleading to reasonable consumers, especially since there was evidence that less than one percent of the , individuals and businesses billed for the internet service actually logged on.

In In re Gateway Learning Corp. In , the FTC launched action against the OMICS Publishing Group for its actions in producing predatory journals [17] and organising predatory conferences occurred partly in response to on-going pressure from the academic community. Courts have identified three main factors that must be considered in consumer unfairness cases: In addition to prospective analysis of the effects of mergers and acquisitions, the FTC has recently resorted to retrospective analysis and monitoring of consolidated hospitals.

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Business and economics portal United States portal. Archived from the original PDF on May 12, Retrieved August 14, Retrieved October 24, Retrieved January 19, Are predatory publishers' days numbered? It might depend on what you say about it, but each new endorsement made without a disclosure could be deceptive because readers might not see the original blog post where you said you got the product free from the manufacturer.

The association is only hiring me for five hours a week. But sometimes I get questions about the conference in my off time. Can that be solved by placing a badge for the conference in my Twitter profile? You have a financial connection to the company that hired you and that relationship exists whether or not you are being paid for a particular tweet. If you are endorsing the conference in your tweets, your audience has a right to know about your relationship. But when you respond via social media, all your followers see your posts and some of them might not have seen your earlier disclosures.

Also, depending upon what it says, the badge may not adequately inform consumers of your connection to the trade association. They will fly me to the launch and put me up in a hotel for a couple of nights. If I write a blog sharing my thoughts about the product, should I disclose anything? Knowing that you received free travel and accommodations could affect how much weight your readers give to your thoughts about the product, so you should disclose that you have a financial relationship with the company.

I share in my social media posts about products I use. Do I actually have to say something positive about a product for my posts to be endorsements covered by the FTC Act? Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. The FTC Act covers only endorsements made on behalf of a sponsoring advertiser. Tagging a brand you are wearing is an endorsement of the brand and, just like any other endorsement, could require a disclosure if you have a relationship with that brand.

Yes, an endorsement can be aspirational. If the blogger was paid, it should be disclosed. No money changes hands.

Do I need to make a disclosure? The connection could be friendship, family relationships, or strangers who make a deal. My Facebook page identifies my employer. Should I include an additional disclosure when I post on Facebook about how useful one of our products is? People reading your posts in their news feed — or on your profile page — might not know where you work or what products your employer makes.

A famous athlete has thousands of followers on Twitter and is well-known as a spokesperson for a particular product. Determining whether followers are aware of a relationship could be tricky in many cases, so we recommend disclosure.

A famous celebrity has millions of followers on Twitter. Many people know that she regularly charges advertisers to mention their products in her tweets.

It depends on whether her followers understand that her tweets about products are paid endorsements. Again, determining that could be tricky, so we recommend disclosure. I create sponsored beauty videos on YouTube.

The products that I promote are also sold in the U. To the extent it is reasonably foreseeable that your YouTube videos will be seen by and affect U. What does the FTC have to say about product placements on television shows?

Is that different from a product placement and does the payment have to be disclosed? Is that an "endorsement" that needs a disclosure? Many people enjoy sharing their fondness for a particular product or service with their social networks. I am an avid social media user who often gets rewards for participating in online campaigns on behalf of brands.

I posted a review of a service on a website. Now the marketer has taken my review and changed it in a way that I think is misleading. Am I liable for that? What can I do? You could, and probably should, complain to the marketer and ask them to stop using your altered review.

You also could file complaints with the FTC, your local consumer protection organization, and the Better Business Bureau. Is there special wording I have to use to make the disclosure? The point is to give readers the essential information. Do I have to hire a lawyer to help me write a disclosure? What matters is effective communication. Do I need to list the details of everything I get from a company for reviewing a product? What matters is whether the information would have an effect on the weight readers would give your review.

And if it is something so small that it would not affect the weight readers would give your review, you may not need to disclose anything. When should I say more than that I got a product for free? It depends on whether you got something else from the company. For example, if an app developer gave you their cent app for free for you to review it, that information might not have much effect on the weight that readers give to your review.

The manufacturer is paying me to try the game and review it. If you get early access, you can say that, but if you get to keep the game or are paid, you should say so. If I upload a video to YouTube and that video requires a disclosure, can I just put the disclosure in the description that I upload together with the video? No, because consumers can easily miss disclosures in the video description. Many people might watch the video without even seeing the description page, and those who do might not read the disclosure.

What about a disclosure in the description of an Instagram post? When people view Instagram streams on most smartphones, longer descriptions currently more than two lines are truncated, with only the beginning lines displayed. It does not convey the importance, nature, and relevance of the information to which it leads and it is likely that many consumers will not click on it and therefore will miss necessary disclosures. The disclosures we are talking about are brief and there is no space-related reason to use a hyperlink to provide access to them.

The social media platform I use has a built-in feature that allows me to disclose paid endorsements. Is it sufficient for me to rely on that tool? It still depends on an evaluation of whether the tool clearly and conspicuously discloses the relevant connection. One factor the FTC will look to is placement. A key consideration is how users view the screen when using a particular platform. For example, on a photo platform, users paging through their streams will likely look at the eye-catching images.

Therefore, a disclosure placed above a photo may not attract their attention. Similarly, a disclosure in the lower corner of a video could be too easy for users to overlook. Second, the disclosure should use a simple-to-read font with a contrasting background that makes it stand out. Ambiguous phrases are likely to be confusing.

For example, simply flagging that a post contains paid content might not be sufficient if the post mentions multiple brands and not all of the mentions were paid. The big-picture point is that the ultimate responsibility for clearly disclosing a material connection rests with the influencer and the brand — not the platform. How can I make a disclosure on Snapchat or in Instagram Stories? You can superimpose a disclosure on Snapchat or Instagram Stories just as you can superimpose any other words over the images on those platforms.

The disclosure should be easy to notice and read in the time that your followers have to look at the image. In determining whether your disclosure passes muster, factors you should consider include how much time you give your followers to look at the image, how much competing text there is to read, how large the disclosure is, and how well it contrasts against the image. You might want to have a solid background behind the disclosure.

Keep in mind that if your post includes video and you include an audio disclosure, many users of those platforms watch videos without sound. Obviously, other general disclosure guidance would also apply. What about a platform like Twitter? How can I make a disclosure when my message is limited to characters? However, the same general principle — that people get the information they need to evaluate sponsored statements — applies across the board, regardless of the advertising medium.

Indeed, if ad is mixed in with links or other hashtags at the end, some readers may just skip over all of that stuff. The person posting in social media could just be thanking a company or brand for providing a great product or service. Depending on the context of the endorsement, it might be clear that the endorser got the product for free and kept it after trying it.

Also, that disclosure might not be sufficient if, in addition to receiving a free product, the endorser was paid. I provide marketing consulting and advice to my clients. Such one-word hashtags are ambiguous and likely confusing.

Many consumers are unlikely to know what it means. However, even if the language is understandable, a disclosure also must be prominent so it will be noticed and read. If I write an article sharing my thoughts about the resort destination, how should I disclose the free travel?

The Guides say that disclosures have to be clear and conspicuous. What does that mean? Consumers should be able to notice the disclosure easily.

They should not have to look for it. In general, disclosures should be: A disclosure that is made in both audio and video is more likely to be noticed by consumers.