Dalbey, his wife and his company, the Dalbey Education Institute, are charged with defrauding consumers by making false and unsubstantiated marketing claims that customers could earn fast and easy money by finding, brokering and earning commissions on promissory notes or cash flow notes. The notes are basically IOUs in which one party agrees to pay another party a sum of money over time. Such notes could include a mortgage or a lottery winning payout.
Consumers spent $40 to $160 each on Dalbey's initial cash flow program and were later encouraged to spend hundreds or thousands of dollars more for seminars, coaching sessions and lists that would help them find promissory note holders, the FTC said.
In one of Dalbey's infomercials, hosted by TV personality Gary Collins, 14 people are seated with Dalbey sharing how they made amazing amounts of money, in some cases in as little as a few hours. One gentleman says he made more than $23,000 in a short period of time, spending just two hours a week. A man identified as Garland says he made $128,000.
What people might have missed is the tiny captions that read: "Extraordinary results. Individual results will vary and depend on using the materials, effort and other factors. Testimonial purchased additional products."
Among all the testimonies, the FTC and the state of Colorado focused on that of Kellogg, who is identified as Marsha B. from Ohio (the B stood for her maiden name). The complaint against Kellogg contends that she falsely represented earning $79,975.01 from one promissory note transaction using Dalbey's cash flow program. Her actual take was $50,000 less.
