Comments To FTC Regarding Amazon FBA Schemes
On November 14, 2024, the Federal Trade Commission will hold a hearing at which members of the public are invited to address the Commission. Banks Law Office attorney Nico Banks plans to attend the hearing to comment on “Fulfillment by Amazon” business opportunity scams, including Wealth Assistants. Ahead of that hearing, he has submitted the following written comment to the FTC:
I want to comment about “Fulfillment by Amazon” business opportunity scams. To carry out these scams, fraudsters advertise that they can set up and operate highly profitable Amazon ecommerce stores for “investors.” The “investors” send the fraudsters between $10,000 and $200,000 to set up and operate these stores, and the fraudsters pocket most of that money; they do not provide meaningful services for the investors, and sometimes they do not provide the investors with an Amazon store at all. These scams have collectively stolen hundreds of millions of dollars from their victims in the last five years. The FTC has brought several actions to shut down these scams, most recently last month in FTC v. Ecom Genie. But the scam continues to proliferate publicly: entities called Ecom Authority; Proficient Supply LLC; Quantum Ecommerce; Wholesale Universe; and Alluvium are just a few examples of entities that are operating this ongoing scheme. My comment is that the civil actions the FTC has taken against the FBA scams are appreciated, but they’ve proven to be insufficient. After the FTC obtains an injunction, the fraudsters go hide for a few months and then start back up again, re-branded. And I want to make two suggestions. First and foremost, these are large theft schemes that will not be deterred unless there are criminal consequences, so the FTC should be referring these cases to the FBI. Second, the FTC should be clear with Amazon that it has a duty to at least try to avoid providing a platform for these frauds, and to report the frauds to law enforcement when it discovers them. As it stands, Amazon is complicit. Right now, for example, it is continuing to let Proficient Supply operate on its platform despite the permanent restraining order the FTC obtained against that company.
As a disclosure, I should mention that I am the plaintiff’s attorney in a case called Hough v. Carroll, which is a putative class action brought against one of these scams called “Wealth Assistants.”
Thank you for your time.