The FTC’s $3.7 Million Settlement Sheds Light on the Cost of Pyramid Schemes

In a landmark action that demonstrates the importance of consumer protection, the Federal Trade Commission (“FTC”) has announced the return of more than $3.7 million to individuals who were harmed by the Fortune Hi-Tech Marketing (“FHTM”) pyramid scheme. This is a significant development for businesses and consumers alike, not only because it highlights the consequences of deceptive business practices but also because it underscores the responsibility that companies have to act with transparency and integrity. Fortune Hi-Tech Marketing, a now-defunct Kentucky-based operation, once promised its participants substantial income by selling products and services from companies like Dish Network and various cell phone providers. However, as investigations revealed, FHTM’s core business was not the sale of products, but rather the recruitment of new members into a financial structure that benefited only those at the top of the pyramid. In exchange for paying costly start-up fees and monthly charges, recruits were encouraged to sign up others in hopes of earning commissions. Unfortunately, the majority of participants were left with little to show for their investments, as the system was ultimately designed to favor only a small percentage of top recruiters.