The Federal Trade Commission (FTC) is issuing $12 million in payments to customers who were caught up in a real estate flipping scheme operated by Zurixx, LLC.
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The Federal Trade Commission (FTC) is issuing $12 million in payments to customers who were caught up in a real estate flipping scheme operated by Zurixx, LLC, according to information released this week.
According to the FTC, more than 25,000 clients paid Zurixx, a real estate investment coaching company, to receive coaching endorsed by the real estate television personality. The government claimed the company made false promises about flipping or wholesaling properties for a profit.
The FTC named Tarek and Christina El Moussa, Hilary Farr, Peter Souhleris and David Seymour as celebrities who promoted Zurixx sales.
“It is unlawful to prey on struggling Americans with empty promises of get-rich-quick money,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We urge consumers to stop before investing their hard-earned money.” Come down and evaluate the facts behind any promise to make money.”
The Utah Department of Commerce’s Division of Consumer Protection and the Federal Trade Commission sued Zurixx and its owners Christopher Cannon, James Carlson and Jeffrey Spangler in September 2019.
The prosecution alleges that Zurixx owners and numerous affiliates used misleading earnings claims to sell in-person seminars and telephone coaching. They used celebrity endorsements and contract clauses that limited consumers’ ability to review their products or talk to law enforcement agencies to convince customers to spend thousands of dollars.
Celebrities allegedly invited customers to attend free “seminars” that were actually sales of paid seminars, costing nearly $2,000. According to a statement released by the FTC in 2022, speakers at the seminar encouraged attendees to sign up for new credit cards with the promise that profits from house flipping would pay off the new credit card debt.
In February 2022, the defendants agreed to a settlement that included $12 million in refunds to customers, as well as a monetary judgment of more than $111 million, $104.7 million in damages to Zurixx and other corporate defendants, and $2.33 million in damages to Zurixx owners.
Zurixx is prohibited from marketing and selling real estate or business coaching programs. The business is also prohibited from violating the Federal Trade Commission’s Telemarketing Rules and Utah’s Business Opportunity Disclosure and Telephone Law.
“The many victims will finally get some justice,” Utah Attorney General Sean Reyes said in a statement. “Permanently removing these actors from the coaching space is a major victory for Utah. We hope this serves as a warning to others who may be considering setting up similar schemes based on false earnings claims.
To help customers learn more about FTC chargebacks, the FTC provides this FAQ resource.
