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Sunday, December 6, 2009
Ex-Con preaching health misinformation for $$$
The unstoppable Kevin Trudeau: Infamous infomercial king is at it again
by Mitch Lipka (WalletPop.com)
Dec 3rd 2009 at 6:00AM
Even if you don't know Kevin Trudeau by name, you'll likely recognize his face. You've probably seen him while channel surfing during a bout of insomnia; he's the perfectly coiffed guy who confidently explains to one or more women on his talk show style-infomercials about having the answers for all that worries you -- from illness to money.
Trudeau is a legendary figure in the world of infomercials, with a charismatic approach that has won him a legion of followers. Over the years, he's offered us advice on how to beat cancer, improve our memory, read faster, lose weight and straighten out our finances. Now he's onto the next life-altering topic. Trudeau is currently saturating the infomercial airwaves with 30-minute segments about his latest book: "Free Money 'They' Don't Want You to Know About."
Trudeau has sold millions of books that dole out his expansive range of advice. Yet, one thing his adoring fans might not realize is that the charming pitchman on the television is also a convicted felon who has been slammed with an extraordinary series of sanctions by the FTC for allegedly misleading consumers. Currently, there is a $40 million-plus fine looming over Trudeau's head in an ongoing court battle with the Federal Trade Commission.
A judge even gave him the distinction of being the only pitchman banned from doing infomercials.But that hasn't slowed Trudeau. In fact, you might have seen him last night on an infomercial. "I have free rein. I can sell whatever I want because I'm protected by the First Amendment," Trudeau told WalletPop. "I can sell a book that says the moon is made of cheese, and it should be protected by the First Amendment."
He has yet to write the moon-cheese book, but if he did, he most certainly would sell a lot of them. His critics -- including the government of the United States -- have portrayed him as a huckster who gets millions of people to pay for worthless advice based on impossible claims. His followers, on the other hand, believe him wholeheartedly."He's just playing right into what everyone wants. He's a master of looking for weaknesses," said marketing expert Tom Antion. "Those are the same characteristics as a con man."
Trudeau was definitely playing a con's game in the late 1980s, leading to criminal charges in 1990 for larceny (posing as someone else to cash $80,000 worth of worthless checks) and credit card fraud (for using a bunch of his customers' credit card numbers to ring up more than $120,000 in charges). He went to federal prison for two years and was released in August 1993. "If I did drugs it would be no problem. Because I bounced checks and couldn't cover them and applied for an Amex card with wrong information, I'm the devil incarnate," Trudeau said. "I made some really bad choices. I did wrong. I pled guilty. I didn't blame anyone but myself."
A few years after Trudeau was released from prison, he paid $185,000 to settle allegations with eight states that he was running a pyramid scheme selling the multilevel marketing program Nutrition for Life. The Federal Trade Commission, meanwhile, has been battling with Trudeau over his advertising claims for well over a decade. In 1998, the FTC and Trudeau negotiated a settlement over allegations his advertisements for "Hair Farming," "Mega Memory System," "Addiction Breaking System," "Action Reading," "Eden's Secret," and "Mega Reading" were deceptive. Trudeau and his colleagues paid $1.1 million in a settlement. The key word here is "settlement." That allows Trudeau to accurately claim he didn't pay a fine (it's not a fine; it's a settlement) and that the charges were dropped.
Then, in 2004, he was banned from infomercials -- except for selling books -- and settled his case with FTC by agreeing to pay $500,000 cash and by surrendering a "luxury vehicle" and a home in California.
A Master of Spin:
Trudeau has managed to turn the constant allegations by the government into a marketing tool. The more trouble he's in, the more he looks like a hero speaking out against a vast government conspiracy intended to silence his powerful messages. His messages, he claims, are ones that the government doesn't want you to know. In fact, the phrase "They don't want you to know about" is incorporated into his most recent book titles."
The government wants to stop the free flow of information. They think these people are too stupid to know they are being ripped off. It's insane," said Trudeau. "It's a testament to his sales ability and naivete of the consumer. This is a person who time and time again has been targeted by different government agencies due to unsavory business practices and continues to sell product," said Scott Testa, a marketing professor at Cabrini College outside Philadelphia. The FTC said in a statement that Trudeau "is free to hawk his books in infomercials, as long as he does not misrepresent the content of the book." "The FTC alleged, and both a federal district court and the 9th Circuit Court of Appeals found, that Mr. Trudeau had made just such a misrepresentation about his book 'The Weight Loss Cure "They" Don't Want You to Know About'," the agency's statement said. A $37 million judgment against Trudeau was vacated in August and sent back to a lower court to be heard again. Now, he faces an even stiffer fine. Yet, Trudeau professes not to care. "I'm never going to pay it," he said. "The FTC has filed briefs in the district court asking for relief consistent with the court of appeals' finding, which if adopted should protect consumers from any further infomercial misrepresentations by Mr. Trudeau," the FTC statement said. When asked if the agency has a particularly antagonistic relationship with Trudeau, the FTC replied: "The FTC's relationship with Mr. Trudeau is no more or less contentious than it is with any party that violates an order. When parties violate a federal court order obtained by the FTC, they can expect the Commission to act."
Policing the kinds of claims that Trudeau makes can be very difficult, said David Rudd, chairman of the Business Department at Lebanon Valley College in Annville, Pa."We have yet to develop an effective means of policing these schemes in an electronic world," Rudd said. "It would be hard to prove he was being fraudulent even if he has the reputation of knowing how to be fraudulent." he told WalletPop in an email.
Trudeau said he has important messages to tell and a lot of people counting on him to spread the word. Even though he said he doesn't need the money, he'll keep on cranking out the books, buying air time on TV to sell them and keep raking in the cash. "I think the people overwhelmingly like what I do or nobody would be buying my stuff," he said.
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