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FTC complaint filed against Fidelity ATM for alleged business scam
December 19, 2006
WASHINGTON - Delray Beach, Fla.-based Fidelity ATM Inc., also d.b.a. Fidelity Bank Card, has been implicated in a Federal Trade Commission investigation.The FTC charges that Fidelity, which sells and places ATMs, misrepresented the basic facts of its business.
According to the FTC, Fidelity claimed that ATM purchasers would earn substantial profits after ATM locations were secured within 45 days. The ATMs were reportedly to be installed and operational in the same time period, and Fidelity allegedly said it would relocate underperforming machines.
The FTC's complaint also claims that Fidelity did not make required Franchise Rule disclosures and had no substantiation for its earnings claims.
"Bogus business opportunities trample on Americans' dreams of financial independence," said FTC chairman Deborah Platt Majoras. "If a business opportunity promises no risk, little effort and big profits, it almost certainly is a scam. These scams offer only a money pit, where no matter how much time and money is invested, consumers never achieve the riches and financial freedom promised."
A December notice filed by Fidelity's temporary receiver says that Fidelity on Nov. 30 ceased all ongoing business.
Fidelity's Andrew Steinberg told ATM Marketplace on Dec. 20 that he could not comment about the case. He did say, however, that Fidelity customers who have questions about the FTC's complaint or Fidelity's closure should call the appointed receiver at (888) 670-4700.
Fidelity investors should receive a status letter by the end of December.
The FTC has named Steinberg Group Inc., Adam Steinberg, Andrew Steinberg and Stephen Duffie in its complaint.
The charges stemmed from a widespread FTC crackdown, known as Project False Hope, on bogus business opportunities and work-at-home scams. The investigation includes more than 100 actions filed by the FTC, the Department of Justice, the United States Postal Inspection Service, and law enforcement agencies in 11 states.
"When the states and the federal government (and) civil and criminal enforcers all work together - sharing information, partnering resources and coordinating our efforts - we can make very significant progress against these unlawful businesses," said Peter D. Keisler, assistant attorney general for the Justice Department's civil division.
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