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Tuesday, March 31, 2015

ERSP Recommends Nick Vertucci Real Estate Academy Modify Certain Claims for Real Estate Education Program; Company Agrees to Do So

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Nick Vertucci Real Estate Academy modify or discontinue certain claims for the Nick Vertucci Real Estate Academy education program.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus, Inc. The marketer’s advertising came to the attention of ERSP through an anonymous competitor challenge.

ERSP reviewed online advertising claims for the affiliate marketing, real estate investing program, including:

  • “Over the last two years, his team has flipped over 800 properties across the country. They're coming to your city offering free training & information on how to make serious money in today's real estate market!”
  • “specific strategies in flipping houses to make quick cash”
  • “Interested in earning extra money in real estate? Want to learn how to make $30,000 in 30 days? Come to Nick's upcoming FREE real estate training workshop in a nearby city and learn how to get in, get out, and GET PAID!”
  • “…make $10,000 to $40,000 per deal in your spare time without using any of your own money.”
  • “James & Minke: 3 Properties Purchased; $33,112 Net Cash Flow 22% in Appreciation”
ERSP reviewed advertising claims made in radio advertising and at two of advertiser’s websites that promoted Nick Vertucci as a real estate investment expert who could teach customers how to make money with real estate investing through courses and training.

ERSP noted the marketer’s willingness to cooperate and participate in the self-regulatory process.

However, ERSP was concerned with representations regarding the implication that customers of the Nick Vertucci Real Estate Academy would have access to “up to $1,000,000” in “pre-approved funding.” ERSP recommended that the marketer modify the claim to disclose whether material terms and conditions that would affect the ability to obtain such funding.

Further, ERSP recommended the marketer discontinue performance claims that customers could earn money quickly and easily. While ERSP recognizes that it is possible to earn money in real estate investing, like any other wealth creation enterprise, success is typically the result of hard work and a time commitment. As such, advertisers should be careful not to communicate, through express or implied claims, that earning money using a product or service is effortless, easy and/or simple

ERSP acknowledged the marketer’s pledge to modify all earnings claims, but noted that the marketer should, in future advertising, refrain from making earnings claims until it reliable data that will support references to the amount of money that consumers may typically earn using the product.

ERSP noted that the marketer did not provide any evidence regarding the amount of money that students of Nick Vertucci have earned. ERSP does not dispute that the success stories depicted in the advertising are from real people with actual success stories. However, ERSP recommended that such testimonials be accompanied by clear and conspicuous language qualifying the claims with disclosures of typicality.

Finally, ERSP acknowledged the marketer’s pledge to add clear and conspicuous disclosures that can be read along with each testimonial, in order to alleviate the potential confusion about the typical results that consumers can generally expect to achieve.

The company, in its marketer’s statement, said that it “agrees with ERSP's recommendations, pledges to implement those recommendations and will implement procedures to ensure compliance with all federal, state and local laws, regulations, industry guidelines and best industry practices.”

Tuesday, March 17, 2015

ERSP Recommends Armando Montelongo Seminars Modify Certain Claims for Real Estate Education Program; Company Agrees to Do So

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Armando Montelongo Seminars modify or discontinue certain claims for the Armando Montelongo Real Estate Education program.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus, Inc. The marketer’s advertising came to the attention of ERSP through an anonymous competitor challenge.

ERSP reviewed online advertising claims for the real estate investing program, including:

  • “Learn how you can start making money 'Flipping Houses' right here in your own back yard.”
  • “See why people, just like you, are making money and having success using Armando's investing strategies, techniques, and systems.”
  • “Learn from the #1 Education Company in the World”
  • “Be one of the first 50 people to register and attend Armando's Mega Millionaire Event to receive a chance to win a $5,000 check* from Armando himself! Also receive your own VIP CASH FLOW PACKAGE and SOCIAL MIXER with Armando's team of real estate experts, a $500 Value absolutely FREE, just for attending!” and “When you attend your name will be entered into a drawing for a $5,000 dollar check. There are no strings and no catches. This drawing is something we are doing as a monthly customer appreciation celebration.”
  • “The education I received through Armando’s system was more valuable than my college education.  I made over $45,000 in profit on my first flip.” [Amir H]
  • “I successfully flipped my first property, with no prior real estate experience after learning Armando’s system and I made a profit over $34,000 on my first flip.” [Janie G]
ERSP also reviewed claims made during free live seminar events, including:
  • “[Armando will] guarantee in writing you will make money by using Armando’s program.”
  • Claims that Armando flipped 138 houses in his first 3 years in the real estate industry

The marketer’s websites (www.armandolive.com and www.armandomontelongo.com) and program infomercials explain that Armando Montelongo is a house flipper, entrepreneur, and motivational speaker.

As a preliminary matter, ERSP noted that the marketer revised a number of claims for AM Real Estate Education during the course of the inquiry.

The key issue before ERSP was whether the advertising at issue conveyed specific express or implied earnings expectations to consumers, aside from the general message that they could earn money using the techniques outlines by the program. ERSP noted its concern about the lack of any clear and conspicuous disclosures concerning the typical results consumers can generally expect to achieve from using the product.

Regarding earnings claims communicated by consumer testimonials used in the advertising, ERSP recommended that the marketer clearly and conspicuously, and in close proximity to the claims, provide consumers with some indication of the range or the average amount of money that can be generally earned based upon the scenario described in the testimonial.

ERSP noted in its decision that the marketer denied that the following information was communicated during a live seminar:

  • “[Armando will] guarantee in writing you will make money by using Armando’s program.”
  • Claims that Armando flipped 138 houses in his first 3 years in the real estate industry.
ERSP noted that representations communicated by a speaker during a live seminar are often unscripted and difficult to document. Further, without evaluating claims in the context in which they are presented, it is difficult to properly assess the messages communicated to consumers.

Nevertheless, ERSP emphasized that any claims that detail Armando Montelongo’s success in using the same techniques he is selling to consumers could be understood to mean that consumers can typically expect the same results. If the results are not typical, ERSP noted, the burden is on the advertiser to disclose what result could typically be expected. 

The company, in its marketer’s statement, said that it “has already incorporated many of ERSP’s suggested practices and has committed to evaluate its marketing practices in light of the ERSP review going forward.”