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For people who were looking to run their own businesses, the lesson of the FTC’s proposed $2.1 million proposed settlement with Las Vegas-based Seed Consulting, LLC, is that neither their future nor their fortune was in the cards – credit cards, that is. The defendants’ modus operandi was to file falsified credit card applications in consumers’ names – a service for which they charged a hefty fee – so that consumers could use those lines of credit to pay for “business seminars” offered by third-party outfits with whom Seed Consulting was in cahoots. According to the FTC, Seed’s tactics left many consumers in an even deeper financial hole than where they began.

The scheme started with promises of financial freedom made by companies that claimed to offer the secret to online or real estate riches through seminars, coaching programs, or other training. Consumers were often lured in through free or low-cost events only to learn that the “real” training cost tens of thousands of dollars – fees that were out of reach for many people already struggling to make ends meet.

So what were cash-strapped consumers to do? Enter Seed Consulting. According to the FTC, the training companies funneled consumers to Seed as a source for “funding.” But as the complaint alleges, Seed didn’t provide funding at all. Instead, they convinced consumers to shell out between $3,000 and $4,000 so Seed could apply for numerous credit cards in their names – cards that came with big lines of credit – in a scheme called “credit card stacking.” To make consumers look eligible for all those cards, Seed often inflated consumers’ income on the applications by $100,000 or more, falsely telling consumers that they could expect that kind of increase after they took the seminars. Once consumers had the credit cards in hand, they typically used them to pay for the pricey programs.

How closely were the training companies and Seed working together? The complaint includes numerous examples, but here’s just one. The FTC alleges the defendants often notified the seminar companies when consumers got the cards so the companies could pitch additional programs based on the amount of credit Seed told them consumers now had. The complaint quotes a telling email from a training company executive that illustrates that buddy-buddy relationship. In prepping for a pitch meeting that evening with a consumer, the executive asked Seed for a breakdown of suggested amounts to put on each of the cards. A Seed person responded, “Chase AARP-15k;” “BOA-4.2k;” and “Discover-10.5k.” The complaint details other examples of the seamless cycle of subterfuge that enriched Seed and its partners, but ultimately stacked thousands more in debt on the backs of consumers for training that didn’t live up to its money-making claims.

Oh, and a word about the partners who hooked consumers up with Seed. FTC watchers may recognize that many of them – MOBE, Digital Altitude, Sellers Playbook, FBA Stores, and Apply Knowledge – have been the subject of FTC and sometimes State AG law enforcement. Other Seed partners – Nudge and Zurixx – currently face FTC charges for allegedly bogus money-making claims.

The alleges Seed, Credit Navigator, LLC, Erik Gantz, and Randy Lang violated the FTC Act, the Telemarketing Sales Rule, the Credit Repair Organizations Act, and the Consumer Review Fairness Act. In addition to the $2.1 million financial remedy, the bans the defendants for life from applying for or obtaining credit cards for consumers in exchange for a fee. The order also prohibits them from misrepresenting any consumer’s financial status to a financial institution.

The proposed settlement is instructive for people in the training seminar ecosystem.

The FTC will evaluate the roles played by everyone whose conduct contributed to consumer injury. Laws like the FTC Act and the Telemarketing Sales Rule recognize that teamwork can make the scheme work. That’s why companies that provide fuel to keep fraudulent fires burning may be found liable. In this case, the FTC alleges that Seed worked hand in glove with the training companies to pull off the deceptive scheme. The takeaway tip: Don’t make unsubstantiated financial claims and don’t team up with companies that do.

Squelching feedback can violate the Consumer Review Fairness Act. The defendants and their training company pals tried to coordinate their responses to the mounting stack of bad online reviews. For example, in addition to pressuring consumers to withdraw complaints they made to the Better Business Bureau, the defendants often made refunds contingent on consumers’ agreement to abide by “non-disparagement” provisions that barred them from saying anything critical about the defendants. The Consumer Review Fairness Act has been in effect for more than four years. Does your conduct comply with the law?

Looking to supplement your income? Don’t overextend yourself by incurring a load of training debt before you’ve even started – especially when so many free resources are available. The has helpful information and volunteer mentors affiliated with its . Other groups eager to help: more than 1,000 (SBDCs) across the country, ready to offer free consulting. Then there’s the method recommended by many successful business people. Approach an experienced entrepreneur in your community, at your place of worship, or through a school or veterans network. For the price of a socially distant cup of coffee, you may be surprised by their willingness to share their success strategies.

Before shelling out even a penny on business training or coaching, read the FTC brochure, .