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Federal Trade Commission v. Thrive Learning, LLC

United States District Court, D. Utah

June 13, 2017

FEDERAL TRADE COMMISSION, Plaintiff,
v.
THRIVE LEARNING, LLC, also doing business as BUSINESS EDUCATION DEPARTMENT, FOCUS, LIGHTWAVE WEB BUILDER, and THRIVE LEARNING INSTITUTE, a Utah limited liability company, MATTHEW RASMUSSEN, individually and as a manager and an owner of THRIVE LEARNING, LLC, and DAVID RASMUSSEN, individually and as a manager and an owner of THRIVE LEARNING, LLC, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING [5] MOTION FOR ENTRY OF STIPULATED ORDER OF FINDINGS AND CONCLUSIONS OF LAW

          David Nuffer, United States District Judge

         Plaintiff Federal Trade Commission (“Commission” or “FTC”) filed its Complaint for Permanent Injunction and Other Equitable Relief (“Complaint”)[1] under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b), and the Telemarketing and Consumer Fraud Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108. The Commission and Defendants stipulate[2] to the entry of this Memorandum Decision and Order (“Order”) to resolve all matters in dispute in this action between them. The FTC moved for entry of this Order.[3] That motion[4] is GRANTED.

         THEREFORE, IT IS ORDERED as follows:

         FINDINGS

         1. This Court has jurisdiction over this matter.

         2. The Complaint charges that Defendants participated in deceptive acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and the FTC's trade regulation rule entitled Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, in the operation of a telemarketing scheme offering consumers purported business coaching services and products.

         3. Defendants neither admit nor deny any of the allegations in the Complaint, except as specifically stated in this Order. Only for purposes of this action, Defendants admit the facts necessary to establish jurisdiction.

         4. Defendants waive any claim that they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, and agree to bear their own costs and attorney fees.

         5. Defendants and the Commission waive all rights to appeal or otherwise challenge or contest the validity of this Order.

         DEFINITIONS

         For the purpose of this Order, the following definitions apply:

         A. “ACH Debit” means any completed or attempted debit to a Person's account at a financial institution that is processed electronically through the Automated Clearing House Network.

         B. “Acquirer” means a business organization, financial institution, or an agent of a business organization or financial institution that has authority from an organization that operates or licenses a credit card system (e.g. Visa, MasterCard, American Express, and Discover) to authorize Merchants to accept, transmit, or process payment by credit card through the credit card system for money, goods or services, or anything else of value.

         C. “Business Coaching Services” means any product or service, including any program or plan, that is represented, expressly or by implication, to train or teach a consumer how to establish, operate, or improve a business.

         D. “Chargeback” means a procedure whereby an issuing bank or other financial institution charges all or part of an amount of a Person's credit or debit card transaction back to the acquiring or merchant bank.

         E. “Corporate Defendant” means Thrive Learning, LLC, also doing business as Business Coaching Department, Focus, Lightwave Web Builder, and Thrive Learning Institute, and its successors and assigns.

         F. “Credit Card Factoring” means:

(a) Presenting or depositing into, or causing or allowing another to present or deposit into, the credit card system for payment, a Credit Card Sales Draft generated by a transaction that is not the result of a credit card transaction between the cardholder and the Merchant;
(b) Employing, soliciting, or otherwise causing or allowing a Merchant, or an employee, representative, or agent of a Merchant, to present to or deposit into the credit card system for payment, a Credit Card Sales Draft generated by a transaction that is not the result of a credit card transaction between the cardholder and the Merchant; or
(c) Obtaining access to the credit card system through the use of a business relationship or an affiliation with a Merchant, when such access is not authorized by the Merchant Account agreement or the applicable credit card system.

         G. “Credit Card Sales Draft” means any record or evidence of a credit card transaction.

         H. “Customer Information of a Financial Institution” shall have the same meaning as set out in Section 6827(2) of the Gramm Leach Bliley Act, 15 U.S.C. § 6827.

         I. “Defendants” means all of the Individual Defendants and the Corporate Defendant, individually, collectively, or in any combination.

         J. “Individual Defendants” means Matthew Rasmussen and David Rasmussen.

         K. “Merchant” means a Person who is authorized under a written contract with an Acquirer to honor or accept credit cards, or to transmit or process for payment credit card payments, for the purchase of goods or services.

         L. “Merchant Account” means an account with an Acquirer that authorizes and allows a Merchant to honor or accept credit cards, or to transmit or process for payment credit card payments, for the purchase of goods or services or a charitable contribution.

         M. “Payment Processing” means providing a Person, directly or indirectly, with the means used to charge or debit accounts through the use of any payment mechanism, including, but not limited to, Remotely Created Payment Orders, Remotely Created Checks, ACH Debits, or debit, credit, prepaid, or stored value cards. Whether accomplished through the use of software or otherwise, Payment Processing includes, among other things: (a) reviewing and approving merchant applications for payment processing services; (b) providing the means to transmit sales transaction data from merchants to acquiring banks or other financial institutions; (c) clearing, settling, or distributing proceeds of sales transactions from acquiring banks or financial institutions to merchants; or (d) processing Chargebacks or returned Remotely Created Payment Orders, Remotely Created Checks, or ACH Debits.

         N. “Person” means any natural person or any entity, corporation, partnership, or association of persons.

         O. “Remotely Created Check” means a check that is not created by the paying bank and that does not bear a signature applied, or purported to be applied, by the Person on whose financial account the check is drawn. A remotely created check is often referred to as a “demand draft, ” “telephone check, ” or “preauthorized draft.” For purposes of this definition, a Remotely Created Check originates as a paper-based transaction, but can be processed subsequently through electronic means (such as through checking imaging or scanning) or through non-electronic means.

         P. “Remotely Created Payment Order” means a payment instruction or order drawn on a Person's financial account that is initiated or created by the payee and that does not bear a signature applied, or purported to be applied, by the Person on whose financial account the order is drawn, and which is deposited into or cleared through the check clearing system. For purposes of this definition, unlike a Remotely Created Check, a Remotely Created Payment Order does not originate as a paper-based transaction. A Remotely Created Payment Order is created when a payee directly or indirectly enters financial account and routing numbers into an electronic check template that is converted into an electronic file for deposit into the check clearing system.

         Q. “Telemarketing” means any plan, program, or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones, and which involves a telephone call, whether or not covered by the Telemarketing Sales Rule.

         R. “Work-at-Home Opportunity” means any product or service, including any program or plan, that is represented, expressly or by implication, to assist a consumer in any manner to earn money while working from home.

         ORDER

         I.

         BAN ON MARKETING OR SALE OF BUSINESS COACHING SERVICES AND WORK-AT-HOME OPPORTUNITIES

         IT IS ORDERED that Defendants are permanently restrained and enjoined from:

         A. Advertising, marketing, promoting, or offering for sale, or assisting in the advertising, marketing, promoting, or offering for sale of any (1) Business Coaching Service, (2) Work-at-Home Opportunity, or (3) service to assist in the creation, advertising, marketing, or promotion of a Work-At-Home Opportunity, including, but not limited to, business entity formation, corporate document filing, bookkeeping services, business plans, market research, business credit development, product sourcing and drop shipping packages, website tools and services (such as website design, building, hosting programs or services), eBay research tools and services, tax planning services, and website marketing packages and services; and B. Holding an ownership interest, share, or stock in any business, other than a publicly traded company, that engages in or assists in advertising, marketing, promoting, or offering for sale of any (1) Business Coaching Service, (2) Work-at-Home Opportunity, or (3) service to assist in the creation, advertising, marketing, or promotion of a Work-At-Home Opportunity, including, but not limited to, business entity formation, corporate document filing, bookkeeping services, business plans, market research, business credit development, product sourcing and drop shipping packages, website tools and services (such as website design, building, hosting programs or services), eBay research tools and services, tax planning services, and website marketing packages and services.

         Provided, however, that Subsections I.A and I.B above do not prohibit the Individual Defendants from providing services to an existing business that (i) has 2 or more employees working in a commercial brick-and-mortar location, or has been operating for at least 6 months and generated revenue over $150, 000, and ...


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