7.01.2007

BurnLounge Changes Comp Plan After FTC Pressures

PC World:
BurnLounge Inc. has eliminated the "network marketing" portion of its business that was targeted by the FTC, the company said.

The FTC's complaint accused BurnLounge of making deceptive earnings claims for members who paid between US$29.95 and $429.95 a year for one of the company's product packages. Members were supposed to be paid to sell digital music and movies to others, but the FTC alleged that BurnLounge's compensation program primarily provided payments for the recruiting of new participants, not on the retail sale of products.

Most BurnLounge members would lose money if they only sold music and didn't recruit other members, the FTC alleged.

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