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Jesse Willms Loses Everything to FTC

The FTC has basically destroyed Jesse Willms, the famous Canadian Acai peddler. In a settlement order, that is part of the FTC’s campaign on affiliate and online marketing scams, basically bans Willms from ever operating in a similar manner in the US. His offer, including a penny auction scam,  ran on dozens of affiliate CPA networks.

The settlement also fines him $359 Million in cash, which will be suspended as long as Willms turns over pretty much everything that he owns. The order requires him to sell his house, close and sell all his companies, cars, furs, and expensive artwork.

The Willms settlement order also permanently prohibits Willms from ever engaging in any business that works by:

  • debiting consumers’ bank accounts without first obtaining their express verifiable authorization;
  • misrepresenting any product or service or the terms and conditions associated with any offer, specifically including claims of “free,” “risk-free,” or “trial offer;”
  • failing to clearly disclose the terms and conditions of any offer, including refund terms, before requesting consumers’ payment information;
  • making misleading or unsubstantiated disease-prevention, weight-loss, and other health-related claims;
  • using false or deceptive endorsements and testimonials;
  • failing to monitor the activities of marketing affiliates and affiliate networks involved in the marketing of any Willms product or service; and
  • making misrepresentations in order to obtain services from payment processors, banks, and other third parties.

The fact that almost four million consumers fell prey to the lure of these ‘free trial’ offers is a stark reminder that ‘free’ offers can come at a huge price,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “The FTC has stopped about $1 billion in online marketing fraud during the past two years by shutting down operations like this. But consumers still need to beware, because scam artists are constantly coming up with new ways to deceive people online.”

According to the settlement, Canadian Authorities including the Canadian Competition Bureau were involved in the investigation against Willms.

“International collaboration is increasingly important for enforcement agencies combating deceptive practices online,” said Lisa Campbell, Deputy Commissioner of Competition for the Competition Bureau. “The Bureau worked with the FTC as part of our ongoing investigation into alleged misleading representations by Mr. Willms and his companies.

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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29 Comments

    1. fU*k i wish i was him because even after having all his assets taken hes still gonna be a millionaire which you folks will never be unless you win the lottery, hes smart enough to put cold hard cash away dummies, if you dont know now you know, praise jesse for he is a smart mofo str8 up. you could learn a thing or 5 from this guy, do not reply to this comment because it will not make sense, this is all factual information.

  1. I didn’t know who Jesse Wilmms was until reading this post, but it sounds like he was a scam artist.

    If he was it’s good he has been stopped. I noticed in the beginning of the article here, you posted about an FTC campaign against affiliate marketers.

    Does this mean they are trying to stop affiliate marketing in general, or just shady affiliate marketing?

    Thanks.

    1. Does not matter who you are, they are going after everyone who operates or generates income online. They are making the rules as they go, sure this guy may have been doing some shady stuff here and there, but by most part he was offering free trials. You see free trials all over online and on tv, proactive netflix you name it, they all offer them. But they are excused from it because they are considered a household brand. Lets look at Reebok, they were accused of deceptive acts, and they did not have their assets froze nor did they have to pay back 100% of the proceeds from so called deceptive acts, they paid about 1/4 of what they made from the sale of there shoes, so why were they treated differently? Because they are a household brand that uses child labor to make shoes oversees.

  2. If you weren’t a sucker, you wouldn’t be taken advantage of. Stop living like a sheep and following the pack, and we wouldn’t need ridiculous laws that punish people that get ahead.

    By the way, he was a Canadian that was arrested and charged by an American government agency. Does that mean China has the right to come over and start arresting people for downloading free movies?

  3. And another one bites the dust.
    Makes you wonder what they rule is a scam.
    There is a lot of stuff out there that I think is a scam,
    when you look at MLM networks how many people get sucked into them but they still keep going.
    What makes one thing a scam and not another?

  4. The FTC is trying to end the continuity business model (the model that gets you to give up your credit card number for some “free trial” then bills you every month for continued products or services).

    Not only have consumers complained about this but the major credit card companies because of high chargebacks. It wasnt so much that he scammed people out of money but more about deceiving people to obtain the free trial and continue to bill month after month for something the consumer really doesn’t want.

    While I do applaud the FTC on this (because I too have been a victim of the online continuity model) I do think that some of the responsibility does fall on the shoulders of the consumer. The consumer should be more careful what he or she is doing with their cc online.

    Remember to always read the fine print whenever using your cc to buy a product online.

    1. Yep exactly, consumer responsibility is out the window. This is not just a problem for Continuity, this is a problem for all merchants online and consumers know how to work the system to get free stuff. Heck Ebay is even having a flux of problems because sellers are being accused of the dumbest things, like “Your item you sold me had one extra wrinkle in the pant leg, therefore return my money or give me some of it back or I will complain and dispute this” Which then the seller either has to do it, or take a chance at being possibly shut down by ebay or suspended.

      1. I agree buts that a whole other issue. PayPal is a nightmare for many merchants because of your pant leg example. Buyers are quick to place a complaint when using PayPal. In many cases I have seen eBay reward the buyer for no reason other then the fact that the buyer opened a dispute. I guess eBay’s method for avoiding headaches is to just giver the buyer their money back. PayPal is terrible if you have a small business that provides services. You put the work in and the buyer is quick to reverse the charge. Terrible. As far as continuity I don’t think it’s the continuity business that should take a hit. Many business models rely on it. Subscription services especially. It’s when merchants try to hide the continuity element to the product and service that should be enforced. I think the present rules for online continuity businesses are easily worked around. All a landing page needs to possess is a text area with a disclaimer that states the billing procedures. The merchant does this by creating a long agree in a small text area that many people don’t read. The box is typically pre checked and customers blow right by it. Maybe the rules should change in that area. Make the agree visible. The entire agree visible somehow and force the read to scroll the entire length of the agreement before they reach the check box to agree. While this doesn’t force the user to read it then it is more the consumers fault and not the merchant because the consumer can’t blame the sites policies because it’s their own fault for not taking the time to check out the agreement that was showcased clearly to them before the purchase is made.

        1. I agree with you Links. It should be the way they present the information rather then the actual system of continuity. Just because it is illegal to drive without a seatbelt and the fact if you get into an accident it saves your life. Even though everyone knows its there, they still don’t use it. It’s up to the consumer to be aware of where, what and how theyre entering their information online and anywhere for that matter.

  5. “Yep exactly, consumer responsibility is out the window.”

    [sarcasm]
    Oh yeah, so the govt will just shelter the consumer, and make them feel like they’ve done nothing wrong by not reading the fine print. Nice way to educate the public so that we as a nation can be self reliant, Govt. +1.
    [/sarcasm]
    Oh wait, they don’t really want that, do they?

    We The Sheeple…

  6. There so many people that just don’t get it! He should change direction and see the new technology in skin care and also see who L’Oreal is partnering up with lately. I think this blog link, proton66.hubpages.com/hub/botox-in-a-box, is a good start.

  7. wow. does the government think people are idiot mindless sheep?

    Its called personal responsibility. All these pussbags cant deal with it because theyre liberals who expect the government to bail them out of everything and get jobs on obama grants lolz.

    I’ll get my moneys thank you very much, sorry 99% oops didnt make the rules, just winning by them 🙂

  8. Only thing this last round of ftc rulings seems to say is, promote how you want. his $359million will be effectively reduced to 100-200k. he wont even flinch.

  9. “fU*k i wish i was him because even after having all his assets taken hes still gonna be a millionaire which you folks will never be unless you win the lottery, hes smart enough to put cold hard cash away dummies, if you dont know now you know, praise jesse for he is a smart mofo str8 up. you could learn a thing or 5 from this guy, do not reply to this comment because it will not make sense, this is all factual information.”

    dooooosh

    1. UH “fU*k i wish i was him because even after having all his assets taken hes still gonna be a millionaire ”

      When you have all your assets taken, you have no money or assets, that is the point.

      1. Hey pacelattin, I’m afraid you’re totally wrong, Jesse still lives like a king, one of his daily drivers is his green Lamborghini, so obviously they didn’t get it all…that would be a myth.

        1. Over all I agree with some of the above comments, truth be told whether we like it or not the grey area of on-line business internationally will be forever out of reach of a final solid fair governing system. Both individuals and supposedly legitimate institutions take advantage of it.

          2nd
          its sad he had to gain his riches through scamming the general public.On the same note, he is brilliant to be able to do it successfully for so long and underestimating his ability and nack for on-line marketing would be equally stupid.

          3rd
          Regardless of his loses, do you think he was simple minded enough to leave all his assets in one country. It is certain he was clear what he was doing and knew exactly what would occur the day he got caught. It would be hard to believe he did not stash some of his revenue/loot some where else in the world.

          4rth
          Yes, he is a scammer(not sure that’s a word), but have you ever thought about all the legitimate industries/systems that allowed his processing to go through .. including the all mighty credit card companies ….tell me they could not see all these transactions going through, tell me they didn’t see the growing trend of complaints, charge backs and such.
          Tell me why only after 359 million was moved through they decided to assist the official governments to catch him.
          Didn’t these official legitimate companies also make money through these transactions …
          after all in order for him to get his money he had to go through a bank or some other institution that was charging him for that service ..

          Banks earned a % of each dollar
          Credit card companies earned a % of each dollar
          Both earn more through other fee’s
          Banks earned % from re-investing money in the accounts ..

          Why was he the only one fined?
          DID BANKS ALSO return all the% they earned?
          DID credit cards also return all % they accumulated?

          I say fair is fair.. he broke the law … take it back .. give it back to those who were robbed … now how bout the rest?

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