Download store provider BurnLounge beat back a request for a temp...
Download store provider BurnLounge beat back a request for a temporary restraining order by the FTC in U.S. Dist. Court, L.A., the company and agency said separately. But the FTC will make its case for a preliminary injunction at…
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a June 18 hearing, an FTC spokeswoman told us. The complaint names Chmn. Alex Arnold and BurnLounge promoters John Taylor, Rob DeBoer and Scott Elliott as defendants. Purchasers of the basic $29.95 per month package can earn reward points to convert to music purchases, and for an extra $6.95 per month, they can redeem points for cash. The company provides “much larger rewards” for recruiting than actually selling downloads, the FTC said, citing pitches by defendants in recruitment sessions implying that participants could make hundreds of thousands of dollars per year through BurnLounge stores. The BurnLounge compensation plan “mathematically dictates” that the points-for-cash participants, called “Moguls,” “will spend more money to participate in BurnLounge than they have earned through their involvement with the company,” with most making far less than advertised, the FTC complaint said. BurnLounge “remains committed to compliance with all applicable laws and regulations,” attorney Sheldon Sloan said: “The company’s business continues uninterrupted and it will defend itself vigorously in subsequent court hearings.”