BurnLounge Gets The Hose Turned On It By The FTC

Jun 14th, 2007 // 1 Comment

burnlounge.pngThe Federal Trade Commission has called for the shuttering of BurnLounge, the “roll your own music store” operation that boasted investors like Justin Timberlake and Shaquille O’Neal and bore more than a few resemblances to a pyramid scheme. From the commission’s release:

According to the FTC, BurnLounge recruited consumers through the Internet, telephone calls, and in-person meetings. The sales pitch represented that participants in BurnLounge were likely to make substantial income. BurnLounge recruited participants by selling them so-called “product packages,” ranging from $29.95 to $429.95 per year. More expensive packages purportedly provided participants with an increased ability to earn rewards through the BurnLounge compensation program.

The BurnLounge compensation program primarily provided payments to participants for recruiting of new participants, not on the retail sale of products or services, which the FTC alleges would result in a substantial percentage of participants losing money.

The FTC specifically alleges that the defendants operate an illegal pyramid scheme, make deceptive earnings claims, and fail to disclose that most consumers who invest in pyramid schemes don’t receive substantial income, but lose money, instead. These practices violate the FTC Act, the agency alleges.

We immediately got suspicious of BurnLounge when we saw beleaguered reliever John Rocker among its clients, but we have little hands-on experience with the company. We’d love to hear from people who have attended BurnLounge “recruiting” meetings–what the promises were, whether Herbalife protein bars were served, etc. Anonymity is assured, so you won’t have to deal with tons of spammy comments like this ex-recruit did. Drop a line to tips@idolator.com.

FTC Asks Court to Shut Down Illegal Pyramid Operation [FTC]

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  1. iamlovebot

    lucas: much like cockroaches and fire ants, you can never be truly rid of john rocker.

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