December 9, 2002
The Federal Trade Commission charged a South Carolina resident using various company names with deceptively marketing his purported envelope stuffing employment opportunities to consumers over the Internet. On his Web sites, Darrell Richmond promoted his work-at-home business opportunities by stating that due to explosive growth he needed to expand his business throughout the United States and Canada. Richmond advertised that "home mailers" were needed to stuff envelopes with circulars which allegedly advertise a wholesale and retail line of approximately 3,500 giftware and collectible items. The defendant offered to pay consumers $2 per envelope stuffed, stating that consumers could earn between $100 to $1,000 or more per week simply by stuffing envelopes at home. He promised that he would provide consumers with all the necessary materials at his expense. The FTC alleges that Richmond made numerous false claims in his advertisements.
The FTC has asked the federal district court to temporarily halt Richmond's business practices and freeze his assets pending a trial.
The FTC's complaint, filed in federal district court in South Carolina, alleges that Richmond promoted his business opportunity using the names: Bargain Shoppers Network Direct!/BSN Direct!, Specialty Merchandising Wholesale Direct!/SMW Direct! and Apex Direct Marketing Group/Apex Enterprises, and on the Internet at www.bsndirect.com, www.homemailerteam.com, and www.homemailergroup.com.
According to the FTC, Richmond's scam works as follows. In his ads, Richmond promises consumers that they will receive everything they need to stuff the envelopes, including the circulars, and all pre-addressed, pre-postage envelopes, at his expense. The defendant also promises that there is absolutely no selling with his plan and that consumers will be paid to stuff his sales circulars into envelopes, not from selling any merchandise. Interested consumers are asked to pay a "one-time set-up fee of only $35." The defendant offers a full refund of the $35 as soon as the 100th stuffed envelope is received. However, the FTC alleges, consumers who paid the one-time, set-up fee did not receive the envelope stuffing materials as promised. Many consumers received nothing at all, while some eventually received a one-page flyer in the mail, instructing them to place an ad in a newspaper or magazine stating the following: "EARN THOUSANDS WORKING AT HOME! RUSH $1.00 AND SELF ADDRESSED, STAMPED ENVELOPE TO: (YOUR NAME, YOUR ADDRESS)." The flyer stated that consumers should forward the envelopes from interested individuals to Richmond and he would in turn pay the consumer a dollar for each envelope received. Consumers attempting to complain to the defendant were often unable to reach anyone because telephone numbers were disconnected, or their letters and e-mail inquiries were unanswered.
Specifically, the FTC's complaint alleges that Richmond violated the FTC Act by misrepresenting that he will provide consumers with all necessary materials to perform the work-at-home envelope stuffing business opportunity, and by misrepresenting his earnings claims that: (1) consumers will be paid $2 for each envelope stuffed and returned to the defendant; and (2) consumers will earn substantial amounts of money.
The FTC's Southeast Region - Atlanta handled the investigation of this matter and received tremendous assistance from the South Carolina U.S. Attorney's Office and the U.S. Postal Inspection Service, Mid-Atlantic Division.
The Commission vote to authorize staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of South Carolina on November 26, 2002.