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Tax Club to pay restitution for scamming home businesses

Rochester Business Journal
June 24, 2014

More than two dozen New Yorkers who say they were scammed into buying business services will receive part of a $15.6 million settlement from the Tax Club Inc.

State Attorney General Eric Schneiderman announced Tuesday that his office, the Florida attorney general and the Federal Trade Commission reached the settlement.

The $15.6 million in restitution will be given to consumers throughout the country, including 26 New Yorkers, who filed complaints in the suit.

Three former Tax Club executives are part of the settlement and are required to pay restitution, state officials said. Edward Johnson, company founder, will pay $2.6 million. He is banned from selling credit development, business planning and merchant account processing services.

Brendon Pack, former director of marketing, and Michael Savage, former president, will jointly pay $13 million. They are prohibited from selling coaching services, development services and work-at-home services and from calling consumers without written consent, unless they previously purchased services. 

Consumers began filing complaints in 2010 with Schneiderman’s office because Tax Club was allegedly misleading consumers into believing Tax Club’s services would help home businesses become successful.

The settlement stipulates that the Tax Club is prohibited from selling business coaching services and work-at-home opportunities. The settlement also requires that Tax Club never misrepresents products or services, sells or uses personal information for benefit and violates the Telemarketing Sales Rules, according to the attorney general’s office.

(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.

 


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