FTC

“Pharma Bro in contempt”: Everything going to plan

by

I’m signed up for the Federal Trade Commission newsletter, because I like to get news of marketing scams, pyramid schemes, and other skulduggery that can be useful for business. So a few days ago, I got a press release with the unlikely but highly satisfying headline:

“FTC Asks Federal Court to Hold ‘Pharma Bro’ Martin Shkreli in Contempt”

You probably know Shkreli. He’s a young guy who caused mass outrage a few years back. He bought a pharma company that sold a lifesaving drug, and then raised the price of that drug 55x, from $13.50 to $750 per pill.

Shkreli then schemed to suppress competition, to make sure desperate patients were forced to pay the new 55x price for his drug.

When this became international news, Shkreli smirked at cameras, and said the one mistake he made was that he didn’t raise the price even higher.

“Why are people coming after you?” asked one interviewer.

“It might have something to do with me being very handsome,” Shkreli answered with a smile.

People were fuming.

“Martini Shkreli,” said one irritated TV announcer, doing what he does best: looking like a real slappable prick.”

So the FTC headline is very clever and very fitting. The new news, by the way, is not that Shkreli is now officially contemptible — which is what the headline makes you think, and which is what most people feel — but that he disobeyed court orders, and is therefore himself “in contempt of court.”

Whatever. Point is:

Maybe Shkreli is a natural-born “slappable prick.” Or maybe it’s an act he’s putting on for reasons of his own.

Either way, I think Shkreli’s behavior is worth studying — and even emulating.

“Whoa whoa hold on there,” I hear you saying. “John, you don’t want to go down that road! There are many better ways to get attention than to become contemptible. It’s not worth it!”

No doubt. And I’m not actually planning on getting into the pharma business, or doing anything to taunt the FTC, or playing around with people’s lives.

But that doesn’t change the fact that specific strategies Shkreli is using — whether instinctively or consciously — can be very valuable if you run a completely above-board, highly moral, or even noble business.

That’s something I will write more about in a future book on positioning, which I’m working on now.

But to twist the advice of James Altucher:

“The best way to promote your next book? Get people to read your current book.”

And so let me remind you of my 10 Commandments of A-List Copywriters.

​​Get it now if you want, because tomorrow I will be raising the price of this baby to $200 for the ebook and $250 for the paperback — the highest prices Amazon will me allow me to charge. You can watch the price increase at the page below:

https://bejakovic.com/10commandments

Operation “Income Illusion” comes to a close

by

Back to business as usual? I’ve got an industry update for you today:

Back in December of 2020, I wrote an email about operation “Income Illusion.”

That clever name was what the FTC called its sting operation against a few direct response businesses, most notably Raging Bull, a big and successful financial publisher at the time.

The thing is, when the FTC hunts down direct response businesses, they often do so in really flagrant cases of fraud.

​​But the case against Raging Bull was… worrying. Because it was more basic.

​​This is what the FTC said Raging Bull had done wrong:

“The defendants claimed in their pitches that consumers don’t need a lot of time, money, or experience, and that the global coronavirus pandemic represents a great time to pay hundreds or thousands of dollars to learn their secret trading techniques, claiming in one ad that the pandemic ‘…might be the most exciting opportunity in decades!’ The defendants also made claims like ‘Learn how you could DOUBLE or TRIPLE your account in One Week!'”

In other words, the FTC took issue with Raging Bull over pretty standard direct marketing practices. Making big claims… using the most flattering testimonials… appealing to people’s greed and sloth.

Well, operation Income Illusion has concluded, at least in the case of Raging Bull. The verdict is in:

1. Raging Bull will have to pay $2.425 million to the FTC.

2. Raging Bull can’t keep making claims about potential earnings without having written evidence that those claims are typical for consumers.

3. Raging Bull can’t keep claiming that investors will be successful regardless of their experience, the amount of capital they have to invest, or the amount of time they spend trading.

Now I don’t know how much money Raging Bull was making back in 2020. But from what little I do know about financial publishing, $2.425 million is what a successful financial promo can pull in a week.

Also, I’m not a lawyer. But again, from what little I know about FTC regulations about marketing, points 2 and 3 above were already law, and are nothing new.

So to me, this entire verdict sounds like an ineffective elementary school teacher pointing to the sign on the wall and handing out detention to the bad kid in the back of the class. “How many times do I have to tell you Billy! No chewing gum! You’re driving me crazy!”

So what will be the consequences of this?

I’m terrible at predicting the future. But personally, I feel like it’s just back to business as usual, if that ever stopped.

After all, a few Agora imprints had a similar verdict made against them almost exactly a year ago. And yet, it hardly stopped them, or anybody else in the industry, from claiming that their next promo “… might be the most exciting opportunity in decades!”

So that’s all I got for you today.

Tune in tomorrow, where I’ll tell you about a little-known statistical anomaly… that’s allowing a small group of American patriots (as well as patriots of a few other nationalities)… to DOUBLE or TRIPLE the odds that their business will be a long-running success.

Verdict in for Agora

by

The verdict is in. The background is this:

In October 2019, before any of us had heard of such an animal as a pangolin, the FTC went after direct response behemoth Agora. Specifically, the FTC said Agora deceived customers with two products.

The first of these was “The Doctor’s Guide to Reversing Diabetes in 28 Days.” No diet changes… no drugs… no exercise required.

How?

The pitch was that diabetes is caused by “Non-Ionizing Radiation,” which the FTC says is based on no known scientific fact.

The second deceptive product was a book titled, “Congress’ Secret $1.17 Trillion Giveaway.”

The advertising for this book claimed you are entitled to get “Republican checks.” And if you don’t collect yours, somebody else will.

Really?

According to the FTC, it turned out to be the old play of “transubstantiating” dividend-paying stocks into free money.

So two days ago, the United States District Court for the District of Maryland, Northern Division, announced the verdict for this anti-Agora action.

​​From what I understand:

Agora has to stop making misleading, unsubstantiated claims, as with the two products above. (For example, they have to drop the “Non-Ionizing Radiation” shtick I mentioned upstairs.) They also have to pay a fine of $2M.

I’m just reporting this as industry news. I don’t have a single specific point to draw out of this. But here are a few thoughts circling in my head:

1. The $2M fine seems easy to manage for a billion-dollar company.

2. I’m no lawyer or blind supporter of the Bill of Rights. But to me, banning books (and consequent advertising) that promote unproven medical theories sure sounds like a violation of the 1st Amendment.

3. Overall, this decision seems fairly limited and uninteresting. At least it’s nothing comparable to the Raging Bull action currently in progress, which I wrote about before Christmas.

But fear not. When that verdict comes out, I’ll send you another update… and you can then decide whether it’s time to look for a new job.

A chilling Christmas card from the FTC

by

Maybe you’ve already heard about Operation Income Illusion. It’s the FTC’s latest action, and it started earlier this month — just in time for Christmas.

The FTC filed lawsuits against five different companies. Among these is Raging Bull, a big and successful player in the financial publishing space.

​​Raging Bull got a restraining order prohibiting it from doing any more marketing… and it had its assets frozen.

So what exactly did Raging Bull to draw the eye of the FTC? From the FTC site:

“The defendants claimed in their pitches that consumers don’t need a lot of time, money, or experience, and that the global coronavirus pandemic represents a great time to pay hundreds or thousands of dollars to learn their secret trading techniques, claiming in one ad that the pandemic ‘…might be the most exciting opportunity in decades!’ The defendants also made claims like ‘Learn how you could DOUBLE or TRIPLE your account in One Week!'”

Errr…

That sounds a lot like the VSL I just finished writing for a real estate investing opportunity. So I find this whole Income Illusion thing a bit chilling.

Because from what I’ve seen in the past, when the FTC goes after a direct marketing company, that company is probably doing something really shady.

But the FTC took issue with Raging Bull over pretty standard direct marketing practices. Making big claims… using the most flattering testimonials… appealing to people’s greed and sloth.

I have no idea where this will go in the future. Maybe the lawsuit will be dismissed… maybe it won’t, but Raging Bull will somehow beat it… maybe it will be a one-time action by the FTC to set an example, without broader consequences. Or maybe it’s a sign of things to come.

In any case, it’s something to keep an eye on.

Now here’s an unrelated pitch, also in time for Christmas:

I’m launching a weekly email newsletter about travel during corona (“…the most exciting opportunity in decades!'”). The first issue will go out tomorrow, right on Christmas Day. If you’re interested, you can sign up at the link below:

https://masksonaplane.com/

The FTC strikes again

by

A couple days ago, the news around the marketing and copywriting water cooler was that the FTC, the club-wielding government body in charge of stamping out deceptive and prohibited marketing practices, had sued several Agora companies.

Agora and its offshoots are some of the biggest players in direct response space, so this has the potential to be big news. Or not. But in any case, it got me curious about what the FTC is up to, so I signed up for their newsletter.

And only yesterday, while I was in the middle of hacking away at my current real estate VSL, I got an FTC email with the subject line, “Yet another real estate seminar scam.” The email reads:

“For the second time in about a month, the FTC sued a company that falsely promised it would show people how to earn money in real estate to get them to pay thousands of dollars for seminars. […] If someone says you can earn a lot of money on an investment with little or no risk, that’s probably a scam.”

So how does this affect the real estate promo I’m writing, which pretty much says you can make money in real estate with little or no risk, and also has an $1k+ upsell on the back end?

​​Well, I’ll tell you about that another day.

​​For now, I encourage you to head over to the FTC site and sign up for their newsletter. It’s entertaining reading, and might be a lifesaver if you’re doing work in edgy markets like bizopp, investing, or health.