FTC Settles Consumer Deception Allegations with Amazon Business Program Seller DK Automation

With a simultaneously filed complaint and proposed settlement, the Federal Trade Commission (FTC) announced an enforcement action against DK Automation and its owners, Kevin David Hulse and David Shawn Arnett over unfounded claims that induced customers to invest in money-making schemes involving Amazon business packages, business coaching, and cryptocurrency. Under the terms of the proposed agreement, the defendants will return $2.6 million to customers and refrain from certain deceptive business practices.

According to the FTC, the Florida-based owner defendants promised customers that they could generate passive income without much effort, when in fact few customers ever profited from their touted money-making schemes. The programs they sold, including AMZDFY and Amazon Done For You, instructed enrollees about how to earn money selling products on Amazon. They reportedly advertised the programs as offering a “100% turnkey” business and charged consumers as much as $100,000 for it.

In addition, their marketing and sales pitches consisted of fake consumer reviews bragging about huge profits, the FTC said. The behavior continued despite agency warnings of deceptive earning claims, the complaint noted, in addition to the defendants’ profits of at least $52 million between 2017 and 2021.

The FTC further alleged that the defendants suppressed negative reviews and failed to present customers with an accurate picture of the opportunity being sold. Under the proposed consent agreement, the defendants must refrain from making false claims and deceiving consumers, stop interfering with reviews and complaints, and provide refunds.

Though the order includes a total monetary judgment of nearly $53 million, the bulk of the amount was suspended due to inability to pay. The FTC notes that if the defendants are found to have lied about their financial condition, then the full amount of the judgment would be immediately due.