(NEXSTAR) – The Federal Trade Commission (FTC) is distributing $12 million in payments to thousands of Americans after it says a Utah-based company with ties to multiple HGTV stars duped people into paying for pricey seminars promising success "flipping" houses.
The company, Zurixx LLC, agreed to a settlement in Feb. 2022 after it allegedly used false earnings claims to convince would-be real estate entrepreneurs to pay, in some cases, tens of thousands of dollars to learn the Zurixx's house flipping system.
Zurixx owners Christopher Cannon, James Carlson and Jeffrey Spangler boosted sales from the coaching scheme by partnering with home-improvement and flipping TV personalities, according to the FTC.
Celebrities involved included HGTV stars Tarek and Christina El Moussa of "Flip or Flop" and Hilary Farr, along with Peter Souhleris and Dave of A&E's "Flipping Boston," among others.
In some cases the TV stars never actually showed up for the classes, sending pre-recorded video messages instead.
While there was some instruction, dozens of attendees said that the classes focused mainly on pushing them to shell out thousands more for additional lessons and access to investors with capital to pay the upfront property cost. The FTC referred to the seminars as a "coaching scheme."
Zurixx falsely told its seminar attendees that they would receive 100% funding for potential real estate investments and greatly exaggerated how much people were likely to make after taking the pricey classes, according to the FTC.
"A single mother who spent "twenty hours of work, [earned a] $42,000 profit on her 'first deal from start to finish,'" one presenter claimed.
Doug Stephens, a pastor and teacher from Havana, Florida told the Associated Press that his teacher told everyone in the class not to speak with each other and continuously celebrated the program. Their homework for the first day, Stephens recalled, was to call their credit card companies to raise their credit limits. On the last day of his 3-day course, the instructor pushed everyone to pay for training sessions which cost as much as $26,000, Stephens said.
Now, 25,563 customers will be getting payments from the FTC, according to a Wednesday news release. Administrators advise that recipients cash their checks within 90 days.
“Many victims will finally be getting some justice. Thousands who were coached into fraudulent investments by Zurixx owners will receive checks from this substantial settlement,” said Utah Attorney General Sean Reyes said in a statement. “Removing these actors permanently from the coaching space is a significant win for Utah. We hope this serves as a warning to others who might consider setting up similar programs based on false earning claims.”
Anyone with further questions is encouraged to visit the FTC website or call the refund administrator, JND - Legal Administration, at (888) 906-0593.
