Zulix claims to teach people how to make money flipping homes. Its advertisements feature celebrities such as Tarek El Moussa and Christina El Moussa from HGTV's “Flip or Flop,” Hilary Farr from the same network's “Love It or List It,” and Peter Souleris and Dave Seymour from A&E's “Flipping Boston.” The ads tout “free events” and claim that Zulix will teach consumers how to make money flipping homes “using someone else's money.”
According to the FTC, the free “seminars” were actually sales pitches for three-day workshops that cost nearly $2,000 to attend. Attendees at the free events were told the three-day workshops would teach them everything they needed to know to make a handsome profit flipping homes. But instructors at the three-day workshops described them as “beginner” courses and tried to sell participants additional products and services that could cost as much as $41,297, the FTC said.
“From start to finish, the defendants lured consumers down a path that promised easy money and detailed information that could cost them thousands of dollars and get them into serious debt,” said Andrew Smith, Director of the FTC's Bureau of Consumer Protection. “When companies tell consumers they have the secret to getting rich with little effort, we encourage them to carefully consider what is actually being offered.”
The FTC also alleged that Zurixx presenters routinely encouraged seminar participants to obtain new credit cards or increase the limits on existing cards, purportedly to help them finance real estate transactions. According to the FTC, the presenters allegedly instructed participants to provide card issuers with income information that was “significantly higher” than their actual income in order to obtain the increases. Zurixx presenters frequently offered participants the option to use their new cards or increased credit limits to pay for “advanced training” from the company.
Zurixx also allegedly required some dissatisfied customers who received refunds to sign agreements that prohibited them from filing complaints with the FTC, state attorneys general or other regulators, from filing complaints with the Better Business Bureau, or even from posting negative online reviews about the company.