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A lesson for WordSmart: Tell the truth

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If you’re a parent, you want to see your child succeed in school. So it may seem like a wise investment when a company claims that its products will improve your kids’ grades, test scores, IQ, reading speed and comprehension and even offers a money-back guarantee. The problem? The FTC found that a company making these claims, WordSmart Corporation, allegedly had no substantiation to support them and relied on outright lies to generate business. WordSmart and its president have agreed to settle the FTC’s charges.

According to the FTC’s complaint, WordSmart’s sales pitch wins the trifecta for false statements:

  1. It deceived parents during telemarketing calls when it claimed that their children had expressed interested in the company’s products and claimed it was affiliated with local schools or national standardized testing companies.
  2. It failed to abide by its 100% money-back 30-day guarantee.
  3. It lacked substantiation for the claims that it made in its telemarketing and advertisements about the benefits and effectiveness of its educational products.

Not so smart, says the FTC.

Adding to its unlawful behavior, WordSmart called people on the Do Not Call Registry, contacted people who had specifically asked the company not to call them, and failed to connect calls to a sales representative within two seconds of the completed greeting, as required by law.

Parents and students: If a company’s ad prompted you to pay for an empty promise, report it to the FTC.

Class dismissed.

Blog Topics: 
Money & Credit


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