FTC Cracks Down on AI-Powered 'Passive Income' Scheme: Click Profit Accused of Defrauding Investors

Amazon AI scammers duped investors out of millions with 'passive income' scheme, FTC alleges

The Federal Trade Commission is going after an e-commerce company that allegedly took millions of dollars from consumers as part of a "passive income" scheme, which spun up Amazon storefronts on their behalf and promised "insane returns" that were higher than the stock market. The FTC said Tuesday it filed a lawsuit against the company, called Click Profit; its co-founders Craig Emslie and Patrick McGeoghean; and two other business associates. It also asked a judge to bar the parties from doing business temporarily. The case is the latest example of the FTC cracking down on e-commerce "automation" services. These companies launch and manage online storefronts on behalf of clients, who pay money for the services and the promise of earning tens of thousands of dollars in "passive income." The companies often make extravagant claims about potential earnings and the use of artificial intelligence technology to guarantee profits. Despite their assurances, consumers frequently end up losing money. Click Profit, which also operated under the names FBALaunch, Automation Industries and PortfolioLaunch, promised investors they would "build you a massively profitable e-commerce store from the ground up" by selling products on Amazon, Walmart and TikTok, according to the FTC. The company charged consumers between $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory, the FTC alleged in its complaint, which was filed in the U.S. District Court for the Southern District of Florida. Click Profit took up to 35% of any profits from their customers' stores, the complaint states. The company claimed the business opportunity was "safe, secure and proven to generate wealth," according to marketing materials referenced in the FTC's complaint. They posted screenshots of purportedly successful Amazon storefronts, including one they claimed generated product sales of over $540,000 in one month. Emslie often appeared in TikTok videos and other online ads to pitch prospective consumers. In one ad, he said that "the stock market, real estate or precious metals will never be able to offer you" the level of security offered through investing in Click Profit, according to the FTC's complaint. Other TikTok videos show him appearing alongside an image of Warren Buffett while "fanning himself" with wads of cash, per the complaint.

Amazon AI scammers duped investors out of millions with 'passive income' scheme, FTC alleges

The Federal Trade Commission is going after an e-commerce company that allegedly took millions of dollars from consumers as part of a "passive income" scheme, which spun up Amazon storefronts on their behalf and promised "insane returns" that were higher than the stock market. The FTC said Tuesday it filed a lawsuit against the company, called Click Profit; its co-founders Craig Emslie and Patrick McGeoghean; and two other business associates. It also asked a judge to bar the parties from doing business temporarily. The case is the latest example of the FTC cracking down on e-commerce "automation" services. These companies launch and manage online storefronts on behalf of clients, who pay money for the services and the promise of earning tens of thousands of dollars in "passive income." The companies often make extravagant claims about potential earnings and the use of artificial intelligence technology to guarantee profits. Despite their assurances, consumers frequently end up losing money. Click Profit, which also operated under the names FBALaunch, Automation Industries and PortfolioLaunch, promised investors they would "build you a massively profitable e-commerce store from the ground up" by selling products on Amazon, Walmart and TikTok, according to the FTC. The company charged consumers between $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory, the FTC alleged in its complaint, which was filed in the U.S. District Court for the Southern District of Florida. Click Profit took up to 35% of any profits from their customers' stores, the complaint states. The company claimed the business opportunity was "safe, secure and proven to generate wealth," according to marketing materials referenced in the FTC's complaint. They posted screenshots of purportedly successful Amazon storefronts, including one they claimed generated product sales of over $540,000 in one month. Emslie often appeared in TikTok videos and other online ads to pitch prospective consumers. In one ad, he said that "the stock market, real estate or precious metals will never be able to offer you" the level of security offered through investing in Click Profit, according to the FTC's complaint. Other TikTok videos show him appearing alongside an image of Warren Buffett while "fanning himself" with wads of cash, per the complaint. Click Profit talked up its expertise by claiming it had product sourcing partnerships with legitimate brands, including Nike, Disney, Dell, Colgate and Marvel, the complaint alleges. It also claimed to have spent $5 million to build a "super computer" and other AI technologies to locate the "most profitable products," claiming the super computer had generated "around $100 million in sales," per the complaint. The company even implied that investors' online store could be bought out by venture capital firms connected with Click Profit "at a 3-6x multiple," the FTC alleged. "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. Amazon suspended or terminated about 95% of Click Profit's stores after they violated Amazon's seller policies, the FTC alleged. After accounting for Amazon's fees, more than one-fifth of Click Profit's stores on the platform earned no money at all, while another third earned less than $2,500 in gross lifetime sales, the FTC stated. As a result, most consumers were unable to recoup their investments and "some are saddled with burdensome credit card debt and unsold products," according to the FTC, which also said that Click Profit often refused to refund victims their investments and threatened them with legal action if they posted publicly about their experience. One unnamed consumer mentioned in the lawsuit invested "his life's savings" in Click Profit and was later terminated as a client "with nothing to show for his payments," the complaint states. He posted a negative review online and was allegedly approached by Emslie's attorney, who threatened to sue the consumer and "take everything he and his wife owned," per the complaint. The consumer took the reviews down, then asked Emslie whether he could receive a partial refund, according to the FTC. "The attorney told the consumer that Emslie had responded, 'F*** off,'" the FTC alleged. Representatives for Emslie and Click Profit didn't immediately respond to a request for comment. The FTC alleges Click Profit violated the FTC Act, the Consumer Review Fairness Act and the Business Opportunity Rule. It seeks to permanently prohibit Click Profit from doing business, as well as monetary relief for the victims.

The FTC Is Going After a 'Passive Income' Amazon AI 'Scheme' That Allegedly Scammed Customers Out of at Least $14 Million

Click Profit claimed to set up online storefronts for customers and handle all the logistics in exchange for at least $55,000. Click Profit promised investors that it would build e-commerce stores on Amazon, Walmart, and TikTok and help them earn tens of thousands of dollars in passive income. All the client had to do was pay between $45,000 and $75,000 initially as a management fee, and then $10,000 more for inventory. Now the Federal Trade Commission (FTC) is suing the company, alleging that consumers collectively lost at least $14 million by participating in the so-called investment opportunity. On Tuesday, the FTC filed a lawsuit against Click Profit and its owners, Craig Emslie and Patrick McGeoghean, alleging that the company promised customers $150,000 in "guaranteed" sales by helping them sell brand-name products selected by its AI supercomputer. Click Profit said it would also handle all the logistics, product selection, shipping, and customer service. Investors would make money if products were sold, but Click Profit would receive a 25% to 35% cut. However, the majority of investors found that the promised money never materialized. The agency requested that a federal court stop Click Profit from operating, and the request was granted earlier this month. "Click Profit misled consumers by falsely promising them guaranteed passive income using cutting-edge AI technology and exclusive brand partnerships," said Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, in a statement. "Their deception caused individual consumers to lose tens of thousands of dollars while the Click Profit's operators enriched themselves." The case is the latest in the FTC's crusade against "automation" companies that claim to launch and manage online businesses for clients in exchange for a hefty investment. The FTC sued Ascend Ecom in September 2024, and Empire in August 2023, over similar claims. Related: The FTC Says a Major Ratings Website Published 'Fake' Reviews -- Here's How to Avoid It Happening to Your Business What Are the Allegations Against Click Profit? Per the complaint, Click Profit has been operating as a business since at least 2021 under different names like Automation Industries and PortfolioLaunch. The company marketed its "scheme" as a "passive income" generator powered by AI with profits that "will outperform returns on traditional investments, like stocks and real estate." Click Profit built credibility in advertisements, marketing materials, and sales pitches by claiming to have forged partnerships with companies like Disney, Colgate, and Nike that enabled the company to purchase prime merchandise in bulk at a discounted price. According to the FTC complaint, Click Profit does not have any affiliation with these companies, and the products the company sold on its e-commerce storefronts consisted of generic and off-brand goods like paper clips, food storage bags, and drying racks. In advertisements, Click Profit also told customers that it spent $5 million on a supercomputer that used AI to find the "most profitable products." The FTC wrote in its complaint that "the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize." Related: Don't Copy Big Brands to Increase Your Sales on Amazon -- Do This Instead Amazon suspended or blocked about 95% of the stores Click Profit set up for violating its seller policies, per the complaint. After taking Amazon's fees into account, more than 20% of Click Profit's stores on Amazon earned no money at all while about 33% earned less than $2,500 in lifetime sales -- not enough to recoup the at least $55,000 investment. Customers were left with "burdensome credit card debt and unsold products," per the FTC. Now the agency is asking for monetary relief for Click Profit's clients as well as a permanent barring of the company from doing business.

FTC: eCommerce Support Platform Click Profit Misled Customers | PYMNTS.com

Federal regulators have accused eCommerce infrastructure platform Click Profit of misleading its customers. The Federal Trade Commission (FTC) said Tuesday (March 18) that it had obtained a court order halting Click Profit's operations, alleging that the company had taken at least $14 million from consumers with false promises that they could make big profits via online sales. According to the commission's complaint, Click Profit tricked customers by promising they could make large amounts of "passive income" using a proprietary system powered by artificial intelligence (AI) to sell goods through online platforms like Amazon, Walmart and TikTok. The FTC said the company also falsely claimed to have partnerships with the likes of Nike and Disney to convince customers to turn over tens of thousands of dollars each. "Click Profit misled consumers by falsely promising them guaranteed passive income using cutting-edge AI technology and exclusive brand partnerships," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a news release. "Their deception caused individual consumers to lose tens of thousands of dollars while the Click Profit's operators enriched themselves. The FTC is working to hold the defendants accountable and secure redress for their victims, who have collectively lost millions of dollars." PYMNTS has contacted Click Profit for comment but has not yet gotten a reply. Visitors to the company website are greeted with this message. "Own your own Amazon Store...This is NOT a get rich quick scheme. If you're looking for an overnight success, this is NOT for you!" But while the company is warning potential customers against overnight success, the FTC said that more than 20% of Click Profit's stores earn no money at all. Stores often take months to open, and when they do, 95% of them are either shut down or suspended by Amazon. "In instances where consumers' stores begin to generate revenue, Click Profit pressures the consumers into using that revenue to buy additional inventory for their stores," the FTC said. In other recent FTC news, the commission said last week that its law enforcement actions had yielded $337.3 million in refunds to consumers in 2024. That total included $280.7 million in refunds directly from the FTC, with the rest being returned to consumers by the defendants or other federal agencies administering the refund programs. The total was up from the $324 million in lawsuit-related refunds issued to consumers in 2023. "Getting money back for people across the country is a top priority for the FTC," Mufarrige said in a news release last week. "We will relentlessly pursue refunds for Americans who lost money to unlawful practices."