In this episode of his “Clearly Conspicuous” podcast
series, “The FTC Cracks Down on Celebrity Endorsers,”
consumer protection attorney Anthony DiResta
examines the recent orders for permanent injunction, monetary
judgment and other relief against Nudge LLC, Dean Graziosi and
Scott Yancey brought by the Federal Trade Commission (FTC) and the
Utah Division of Consumer Protection. Mr. DiResta reviews the
allegations in the case and explains how the settlements show that
celebrity endorsers can be held liable for consumer protection
claims, not just companies and principles.

Listen to more episodes of Clearly Conspicuous
here.

Podcast Transcript

Good day and welcome to another podcast of Clearly Conspicuous.
As we’ve noted in previous sessions, our goal in these podcasts
is to make you succeed in this environment, make you aware of
what’s going on with the authorities and consumer protection
and give you practical tips for success. It’s a privilege to be
with you today.

The FTC Focus Is on Celebrity Endorsers

And our topic is celebrity endorsers beware. Today, we analyze
the recent orders for permanent injunction, monetary judgment and
other relief against Nudge LLC, Dean Graziosi and Scott Yancey
brought by the Federal Trade Commission and the Utah Division of
Consumer Protection. The complaint alleges that these individuals
and companies use false promises to sell consumers a series of
expensive real estate investment training programs. Under the
complaint, the federal and state governments alleged that the
defendants attracted consumers to its events, using misleading
infomercials and social media advertising in which celebrities
promised to share investing techniques. Defendants represented that
if consumers purchased their products and services, they would gain
access to special tools that would enable them to become successful
real estate investors. According to the complaint, the defendants
would ultimately not provide such products or services and would
merely pitch additional training programs that could cost as much
as $30,000. Also, the complaint alleges that most consumers who
purchased the defendants’ products or services did not become
successful investors at all, but instead struggled to even recoup
the money they spent. Under the settlement, Nudge is banned from
selling wealth creation products and services anywhere in the
country, and they’re required to provide redress to consumers
in the amount of $15 million. Moreover, the Graziosi settlement
includes a monetary penalty of $1.25 million, and the Yancey
settlement includes a monetary penalty of $450,000.

Key Takeaway

So, here’s the key takeaway. The foregoing orders
demonstrate that celebrity endorsers, in addition to the companies
and principles, can be liable for consumer protection claims. The
settlements with Graziosi and Yancey are the FTC’s first
monetary settlements with celebrity endorsers. Please let me say
that again. The settlements with Graziosi and Yancey are the
FTC’s first monetary settlements with celebrity endorsers. And
this introduces an increased risk for celebrities and companies who
desire to enter into advertising partnerships. Furthermore, the FTC
has revealed once again its willingness to partner with state
attorneys general to expand its reach and pursue localized cases
for unfair and deceptive practices.So please stay tuned to further
programs as we identify and address the key issues and developments
and provide strategies for success. I wish you continued success
and a meaningful day.

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