(NEXSTAR) The Federal Trade Commission is paying thousands of Americans $12 million after alleging that a Utah-based company with ties to several HGTV stars deceived people into paying expensive seminars with promises of success in “flipping” homes.
A company called Zurixx LLC agreed to a settlement in February 2022 over allegations that it used false revenue claims to convince aspiring real estate entrepreneurs to pay, in some cases, tens of thousands of dollars to learn the Zurixx home flipping system.
According to the FTC, Zulix owners Christopher Cannon, James Carlson and Jeffrey Spangler boosted sales from their coaching programs by partnering with home improvement and home remodeling television personalities.
NEW YORK, NY – MAY 17: Hilary Farr attends the ‘Paley Honors: Celebrating Women in Television’ held at Cipriani Wall Street in New York City on May 17, 2017. (Photo by: Mark Sagliocco/FilmMagic)Los Angeles, 2017: The ‘Flip or Flop’ host poses for a portrait in Los Angeles, California in November 2017. (Photo by: Aaron Rapoport/Corbis/Getty Images)
Celebrities in attendance included HGTV's “Flip or Flop” stars Tarek El Moussa and Christina El Moussa, Hilary Farr and Peter Souleris and Dave from A&E's “Flipping Boston.”
In some cases, TV stars wouldn't even show up to class in person, instead sending pre-recorded video messages.
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While some instruction was provided, dozens of participants said the seminars were primarily focused on coercing people into paying thousands of dollars for additional lessons and connecting them with investors who had the capital to pay for upfront costs on real estate. The FTC called the seminars a “coaching scheme.”
According to the FTC, Zulix falsely represented to seminar participants that they would receive 100% of their potential real estate investment funds and significantly overstated the amount of profit people could make after taking its expensive courses.
“I worked 20 hours, [earned a] “I made $42,000 in profit 'on the first trade from start to finish,'” one presenter claimed.
Doug Stevens, a pastor and teacher in Havana, Florida, told The Associated Press that teachers told the class not to talk to each other and constantly celebrated the program. Stevens recalled that the homework assignment on the first day was to call their credit card companies to increase their credit limits. On the last day of the three-day course, the teachers pressured everyone to pay for the training sessions, which cost $26,000, Stevens said.
Currently, 25,563 customers are due to receive payments from the FTC, according to a news release Wednesday, with the administrator advising recipients to cash their checks within 90 days.
“Many victims will finally get justice. Thousands of people who were misled into making fraudulent investments by the owners of Zulix will receive this significant settlement,” Utah Attorney General Sean Reyes said in a statement. “Permanently removing these actors from the coaching industry is a major win for the state of Utah. We hope this serves as a warning to others considering setting up similar programs based on false revenue claims.”
If you have further questions, please visit the FTC website or call the refund administrator, JND – Legal Administration, at (888) 906-0593.