Jamaal Sanford received a disturbing email in May of last year. The message, whose sender claimed to be part of a \u201cRussian shadow team,\u201d contained Sanford\u2019s home address, social security number and his daughter\u2019s college. It came with a very specific threat.<\/p>\n
The sender said Sanford, who lives in Springfield, Missouri, would only only be safe if he removed a negative online review.<\/p>\n
\u201cDo not play tough guy,\u201d the email said. \u201cYou have nothing to gain by keeping the reviews and EVERYTHING to lose by not cooperating.\u201d<\/p>\n
Months earlier, Sanford had left a scathing review for an e-commerce \u201cautomation\u201d company called Ascend Ecom on the rating site Trustpilot. Ascend\u2019s purported business was the launching and managing of Amazon storefronts on behalf of clients, who would pay money for the service and the promise of earning thousands of dollars in \u201cpassive income.\u201d<\/p>\n
Sanford had invested $35,000 in such a scheme. He never recouped the money and is now in debt, according to a Federal Trade Commission lawsuit unsealed on Friday.<\/p>\n
His experience is a key piece of the FTC\u2019s suit, which accuses Ascend of breaking federal laws by making false claims related to earnings and business performance, and threatening or penalizing customers for posting honest reviews, among other violations. The FTC is seeking monetary relief for Ascend customers and to prevent Ascend from doing business permanently.<\/p>\n
It\u2019s the latest sign of the FTC\u2019s crackdown on e-commerce money-making schemes on top of some of the internet\u2019s leading marketplaces, like Amazon and Airbnb. Since mid-2023, the agency has sued at least four automation companies, alleging deceptive marketing practices and falsely telling customers that they could generate passive income.<\/p>\n
The FTC isn\u2019t just focused on e-commerce automation businesses. On Wednesday, the agency said it\u2019s stepping up enforcement against companies that use artificial intelligence \u201cas a way to supercharge deceptive or unfair conduct that harms consumers.\u201d The agency pointed to Ascend as a company that it took action against in part because of its claims that it used AI \u201cto maximize clients\u2019 business success.\u201d<\/p>\n
The FTC has also pledged to go after companies that try to suppress negative reviews online as part of new rules issued this year targeting fake reviews.<\/p>\n
Automation businesses like Ascend promote their easy money opportunities on Instagram, TikTok and YouTube. But their promises go mostly unfulfilled, and often the storefronts get shut down for violating policies around dropshipping \u2014 the selling of products to customers without ever stocking inventory \u2014 or counterfeits.<\/p>\n
The FTC\u2019s complaint against Ascend accused co-founders Will Basta and Jeremy Leung of defrauding consumers of at least $25 million through their scheme. Formed in 2021, Ascend has done business under several entity names with operations registered in states including Texas, Wyoming and California.<\/p>\n
The filing shows that the threats against Sanford grew more menacing. Two days after the initial email, Sanford\u2019s wife\u2019s phone lit up with a text message containing an image of a severed head that again urged the removal of the unflattering review.<\/p>\n
\u201cYour husband has angered some people with his ignorance,\u201d the text message said. \u201cThe type he does not wish to anger.\u201d<\/p>\n
Sanford soon purchased a security system for his home.<\/p>\n
Sanford said in an interview that Ascend had promised his Amazon storefront would generate enough revenue to cover the cost of inventory the company bought each month on his behalf. Months went by and his store amassed a \u201csmorgasbord\u201d of items, from LED lights to vitamins, which Ascend purchased from other retailers like Macy\u2019s and Home Depot and then sold on Amazon, Sanford said. The company used the dropshipping model, Sanford said, which often led to the stores getting suspended on Amazon.<\/p>\n
Amazon prohibits merchants from dropshipping unless they identify themselves as the seller of record, meaning their name is listed on the invoice, packing slip and other materials.<\/p>\n
As Sanford\u2019s sales sputtered and his debts swelled, he made a series of complaints to Basta and Leung. When they went unanswered, he left the negative reviews. Sanford said <\/strong>Ascend eventually offered to refund him $20,000 if he would take down the review, but he declined.<\/p>\n \u201cI think I\u2019m resigned to the fact that I won\u2019t be getting my money back and now I just want accountability,\u201d he said.<\/p>\n Karl Kronenberger, a lawyer for Ascend, said in a statement that the company denies ever threatening customers and it attempted to resolve any disputes \u201cin good faith.\u201d<\/p>\n \u201cWe are investigating whether a competitor of Ascend may be the driving force behind some of the allegations in the case,\u201d Kronenberger said.<\/p>\n Ascend\u2019s marketing pitch claimed customers could quickly earn thousands of dollars from sales generated on Amazon, Walmart and other platforms. The company said it had developed proprietary artificial intelligence tools that it used to identify top-selling products.<\/p>\n E-commerce automation companies are increasingly exploiting Amazon\u2019s third-party marketplace, which now hosts millions of merchants and accounts for more than half of all goods sold on the site.<\/p>\n Amazon didn\u2019t provide a comment for this story.<\/p>\n Ascend promoted the scheme as \u201crisk free,\u201d the FTC said, because of its buyback guarantee, which effectively committed to make clients whole if they didn\u2019t recoup their investment within 36 months.<\/p>\n \u201cAfter consumers invest, the promised gains never materialize, and consumers are left with depleted bank accounts and hefty credit card bills,\u201d the regulator wrote in its complaint.<\/p>\n To add an air of legitimacy, Ascend falsely claimed it had been featured in media outlets like Forbes, Yahoo! Finance and Business Insider, the FTC said. It primarily advertised its business on social media platforms TikTok, X, YouTube and Instagram.<\/p>\n Ascend faces two lawsuits in California that allege breach of contract and other claims, according to the FTC. In January, an arbitration action was filed against Ascend in Florida on behalf of 30 customers. Nima Tahmassebi, an attorney representing the Ascend customers, told CNBC that the clients chose to withdraw the claim once they learned of the FTC case.<\/p>\n Tahmassebi said he has been contacted by more than 100 individuals who \u201call but begged for legal assistance\u201d because they lost money after paying for Ascend\u2019s automation services.<\/p>\n \u201cI\u2019m talking to people who said I can\u2019t get Christmas gifts this year because of my situation with them,\u201d Tahmassebi said. \u201cPeople took money they could have applied to their kid\u2019s college tuition. Now it\u2019s gone, and they\u2019re left bewildered.\u201d<\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Jamaal Sanford received a disturbing email in May of last year. The message, whose sender…<\/p>\n","protected":false},"author":1,"featured_media":8404,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-8403","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/8403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/comments?post=8403"}],"version-history":[{"count":0,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/8403\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media\/8404"}],"wp:attachment":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media?parent=8403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/categories?post=8403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/tags?post=8403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}