ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus, Inc. The marketer’s advertising came to the attention of ERSP pursuant to an anonymous competitor challenge.
Claims at issue in the initial inquiry included:
- “Over the last two years, his team has flipped over 800 properties across the country. They're coming to your city offering free training & information on how to make serious money in today's real estate market!”
- “Will you let me turn YOU into my next Real Estate Millionaire?”
- “Interested in earning extra money in real estate? Want to learn how to make $30,000 in 30 days? Come to Nick's upcoming FREE real estate training workshop in a nearby city and learn how to get in, get out, and GET PAID!”
- “…make $10,000 to $40,000 per deal in your spare time without using any of your own money.”
- “James & Minke: 3 Properties Purchased; $33,112 Net Cash Flow 22% in Appreciation”
Upon receipt of the Basis of Inquiry, the marketer informed ERSP that it was the named defendant in litigation in the United States District Court, Central District of California, Southern Division. The marketer noted that, pursuant to Section 2.2 (C)(ii)(b) of the ERSP Policy & Procedures, it would not participate in the self-regulatory forum, because it anticipates that the pending lawsuit will involve the same advertising and claims that are the subject of the ERSP inquiry.
The marketer also indicated that, while it would be unable to comply with ERSP’s request for additional information, it is voluntarily undertaking a comprehensive review of its entire advertising and marketing materials.
ERSP noted in its decision that while it recognized the marketer’s position regarding the pending litigation, there has been no confirmation that pending involves the same advertising and the same claims at issue in this self-regulatory inquiry.
Accordingly, based upon the marketer’s written representation that it would not participate in this self-regulatory inquiry, ERSP is referring the matter to the FTC pursuant to Section 2.6 (B) of the ERSP Policy & Procedures.