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In brief: If something appears too good to be true, it almost always is. That appears to be the case with an e-commerce company being sued by the FTC for allegedly deceiving customers. Click Profit promised clients they could make huge sums of money in passive income using its proprietary system, powered by AI, that created and managed Amazon storefronts. But the agency says otherwise.
The FTC writes that Click Profit took millions from consumers using the promise of earning big profits from online sales. It told investors that it would leverage cutting-edge AI technology and exclusive brand partnerships with the likes of Nike, Disney, Dell, Colgate and even Marvel, creating e-commerce stores that sold products primarily on Amazon, as well as Walmart and TikTok.
Click Profit convinced individuals to hand over tens of thousands of dollars as its system was supposedly “safe, secure, and proven to generate wealth.” Its social media pages and ads claimed consumers could earn six-to-eight figure incomes from their storefronts. The complaint states that co-founder Craig Emslie appeared in advertisements alongside an image of Warren Buffett while fanning himself with wads of cash.
The company charged consumers a management fee of between $45,000 and $75,000, along with an extra $10,000 to pay for the stores’ inventories. The FTC says that Click Profit took up to 35% of any profits from their customers’ stores, and, collectively, customers lost at least $14 million.
Some other statements made by Click Profit include that it had spent $5 million to build a “super computer” and other AI technologies to locate the “most profitable products,” claiming it had generated around $100 million in sales. There was also an implication that customers’ online stores could be bought out by venture capital firms connected with the company “at a 3-6x multiple.”
“In reality, the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize,” the FTC said in its complaint.
According to the complaint, after accounting for Amazon’s fees, more than one-fifth of the company’s stores on the platform earn no money at all and another third earn less than $2,500 in gross lifetime sales. With Click Profit’s startup fees, ongoing charges, and “profit share” fees, most consumers were unable to recoup their investments, much less earn the promised lucrative income, and “some are saddled with burdensome credit card debt and unsold products.”
There are further allegations that Click Profit often takes months to open customer stores, and sometimes they never open. One person who lost “his life’s savings” claimed that after posting a negative review online, he was approached by Emslie’s attorney, who threatened to sue him and “take everything he and his wife owned.”
The consumer took down the review and when he asked for a partial refund, “The attorney told the consumer that Emslie had responded, ‘F*** off,'” the FTC allege.
According to the complaint, Amazon has blocked, suspended, or terminated about 95% of Click Profit’s stores for violating seller policies. The FTC secured a court order temporarily halting Click Profit’s operations. It seeks to permanently prohibit the company from doing business, as well as monetary relief for the victims.
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