Abbott reaches agreement with Ky. company
HOUSTON (Legal Newsline) - Texas Attorney General Greg Abbott announced an agreement on Tuesday with a Lexington, Ky.-based direct sales firm that allegedly operated an illegal pyramid scheme.
Fortune Hi-Tech Marketing Inc. agreed to repay up to $1.3 million to its Texas customers. The agreement resolves Abbott's allegations that the company violated the Deceptive Trade Practices Act.
In a typical illegal pyramid scheme, an investor or purchaser pays a fee for the opportunity to receive profits in the future. Those payments are primarily obtained by inducing others to join the operation and pay a fee rather than from the sale of an actual service or product. Fortune Hi-Tech's customers complained that the defendant falsely represented the earnings they would achieve if they became one of the independent representatives of the defendant.
The settlement agreement prohibits Fortune Hi-Tech from engaging in deceptive trade practices in the future and requires the defendant to refund up to $299 to each Texas customer who qualifies, up to a total of $1.3 million.
Qualified customers may obtain additional information about the settlement and may submit a refund claim to the company by downloading a claim form from Abbott's Consumer Protection Division at www.texasattorneygeneral.gov. Claims must be submitted to Fortune Hi-Tech Marketing no later than Nov. 28.