Sunday, October 24, 2010

FTC v. John Stefanchik

For those who don't remember him, John Stefanchik was an 1990s-era get rich quick in real estate guru who pitched a book and home study course telling people they could make a fortune in real estate paper.

His Wealth Without Boundaries program promised you could "make $10,000 every thirty days---guaranteed."

Well, as you guessed, buyers of his course soon learned that there were no magic pots of cash available to be harvested monthly.  Stefanchik got rich selling his course.  His students got poorer.

Ultimately, the FTC got a $17 million judgement against Stefanchik and his operation has been shut down.  The Stefanchik Method: Earn $10,000 a Month for the Rest of Your Life-In Your Spare Time is now being sold on Amazon for just 32 cents.

What is important these days is not the name or the lesson of John Stefanchik.  There are a legion of get-rich-quick real estate gurus who make John look like a petty amateur when it comes to making phony claims about their products.  And of course the get-rich-quick schemers go far beyond just real estate offerings.  Check out the doozy in the ad above.  Make almost $1,000 per day working at home on Twitter????

What really is important these days is the case of Federal Trade Commission v. John Stefanchik, 559 F. 3rd. 924 (2009) where the FTC's methods used to evaluate guru course promises was called into question by Stefanchik on appeal.

He lost, and multiple official sources within the FTC tell me there is a host of new enforcement cases coming through the pipeline based on the FTC's methodology in that case.

This is excellent news because the FTC's approach in Stefanchik was dead on perfect.  The claims made during the last real estate bubble by flipping property "experts" alone would fill an encyclopedia of the absurd and ridiculous.