ERSP Recommends Armando Montelongo Seminars Modify Certain Claims for Real Estate Education Program; Company Agrees to Do So

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Armando Montelongo Seminars modify or discontinue certain claims for the Armando Montelongo Real Estate Education program.

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 through an anonymous competitor challenge.

ERSP reviewed online advertising claims for the real estate investing program, including:

• “Learn how you can start making money 'Flipping Houses' right here in your own back yard.”
• “See why people, just like you, are making money and having success using Armando's investing strategies, techniques, and systems.”
• “Learn from the #1 Education Company in the World”
• “Be one of the first 50 people to register and attend Armando's Mega Millionaire Event to receive a chance to win a $5,000 check* from Armando himself! Also receive your own VIP CASH FLOW PACKAGE and SOCIAL MIXER with Armando's team of real estate experts, a $500 Value absolutely FREE, just for attending!” and “When you attend your name will be entered into a drawing for a $5,000 dollar check. There are no strings and no catches. This drawing is something we are doing as a monthly customer appreciation celebration.”
• “The education I received through Armando’s system was more valuable than my college education.  I made over $45,000 in profit on my first flip.” [Amir H]
• “I successfully flipped my first property, with no prior real estate experience after learning Armando’s system and I made a profit over $34,000 on my first flip.” [Janie G]

ERSP also reviewed claims made during free live seminar events, including:

• “[Armando will] guarantee in writing you will make money by using Armando’s program.”
• Claims that Armando flipped 138 houses in his first 3 years in the real estate industry

The marketer’s websites (www.armandolive.com and www.armandomontelongo.com) and program infomercials explain that Armando Montelongo is a house flipper, entrepreneur, and motivational speaker.

As a preliminary matter, ERSP noted that the marketer revised a number of claims for AM Real Estate Education during the course of the inquiry.

The key issue before ERSP was whether the advertising at issue conveyed specific express or implied earnings expectations to consumers, aside from the general message that they could earn money using the techniques outlines by the program. ERSP noted its concern about the lack of any clear and conspicuous disclosures concerning the typical results consumers can generally expect to achieve from using the product.

Regarding earnings claims communicated by consumer testimonials used in the advertising, ERSP recommended that the marketer clearly and conspicuously, and in close proximity to the claims, provide consumers with some indication of the range or the average amount of money that can be generally earned based upon the scenario described in the testimonial.

ERSP noted in its decision that the marketer denied that the following information was communicated during a live seminar:

• “[Armando will] guarantee in writing you will make money by using Armando’s program.”
• Claims that Armando flipped 138 houses in his first 3 years in the real estate industry.

ERSP noted that representations communicated by a speaker during a live seminar are often unscripted and difficult to document. Further, without evaluating claims in the context in which they are presented, it is difficult to properly assess the messages communicated to consumers.

Nevertheless, ERSP emphasized that any claims that detail Armando Montelongo’s success in using the same techniques he is selling to consumers could be understood to mean that consumers can typically expect the same results. If the results are not typical, ERSP noted, the burden is on the advertiser to disclose what result could typically be expected. 
The company, in its marketer’s statement, said that it “has already incorporated many of ERSP’s suggested practices and has committed to evaluate its marketing practices in light of the ERSP review going forward.”