An elaborate scam involving Amazon’s (AMZN) e-commerce platform has bilked unsuspecting investors out of millions of dollars, alleges the Federal Trade Commission (FTC) in a new lawsuit.
The FTC has filed a lawsuit against the company Click Profit and its co-founders Craig Emslie and Patrick McGeoghean, claiming they bilked millions of dollars from consumers as part of a “passive income” scheme. According to the lawsuit, Click Profit ran what’s known as an e-commerce automation service.
It managed online storefronts on behalf of customers who paid for the services upfront on a promise that they would earn tens of thousands of dollars in passive income. Click Profit also reportedly promised to use artificial intelligence (AI) technology to help maximize profits.
Failing to Deliver
Click Profit, which operated under several other names such as “Automation Industries,” promised investors they would build a “massively profitable e-commerce store from the ground up” and sell products on Amazon, Walmart (WMT), and TikTok on behalf of clients, according to the FTC.
Click Profit charged consumers $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory. Click Profit also took up to 35% of any profits from their customers’ stores. It posted screenshots of purportedly successful Amazon storefronts, including one it claimed racked up sales of more than $540,000 in one month.
Selling a Dream
Emslie often appeared in TikTok videos and other online ads to pitch consumers. Some TikTok videos showed him appearing alongside an image of Warren Buffett while fanning himself with dollar bills. In the end, the promised AI technology and brand partnerships did not exist, and the promised earnings never materialized, said the FTC in its complaint.
Click Profit took people’s money upfront and did little else, states the FTC. Amazon has suspended or terminated about 95% of Click Profit’s stores after they were found to violate its seller policies. After accounting for Amazon’s fees, more than one-fifth of Click Profit’s stores on the platform earned no money at all, while another third earned less than $2,500 in total sales.
AMZN stock has declined 12% this year.
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