Together Dating Service's Billion Dollar Investment Fraud Against "Lonely Hearts" Reported
a...@cupidnet.com
TOGETHER DATING SERVICE'S BILLION DOLLAR INVESTMENT FRAUD AGAINST
"LONELY HEARTS" REPORTED TO THE SECURITIES AND EXCHANGE COMMISSION
AND TO THE FEDERAL TRADE COMMISSION WITH REQUEST TO STOP ITS FRAUD
NEW HAVEN, Conn.--The Enforcement Division of the Securities
and Exchange Commission and the Consumer Protection Bureau of the
Federal Trade Commission were today urged to put a prompt stop to
an "investment" fraud alleged to have already taken in $1 Billion
$47 Million by intentionally preying on "lonely hearts" with hard-
sell tactics used against single people "at what is often the most
vulnerable point of their lives (after a recent death of a spouse,
divorce or another traumatic experience)," and to end it before St.
Valentine's Day, by Victims Together, a nonprofit group formed by
customers who feel defrauded by the Together Dating Service chain.
Victims Together's request alleges that these actions comprise
the "[l]argest sale of unregistered securities through unregistered
investment advisers using mail-and-wire frauds in false advertising
and in scam telemarketing in all of United States business history"
and have already cost consumers more than $1 Billion $47 Million,
today, with not-less-than $2,150,000 more being taken in each week,
based on figures that Together provided its bankers and investors.
Victims Together supported it allegations with pages from the
Together Operations Manual transmitted to the two federal agencies
charged with oversight of securities sales and of advertising prac-
tices, including explicit sales "SCRIPT" claims that "you can sell
it for a lot more than your original invewtment" (sic); "you stand
to make ____ profit if you sell it for the current rate"; and "even
if you sell it for less or even just to recoup your investment[,]
there's money in your pocket that you wouldn't have had and you've
met the love of your life! You can't go wrong!" Victims Together
also attached the Together Manual's "UPGRADE TIPS," which further
claim: "It's almost like putting the money in a temporary savings
account thats [sic] earning tons of interest, and you get to with-
drawl [sic] the money when wedding/honeymoon time comes around!"
Victims Together's request, presented by its attorney, alleges
that "high pressure" sales tactics and "outright frauds" are used
by "unregistered investment advisers (who are in fact 'commission
only' sales people but who masquerade as so-called 'professional
counselors')," and that these same "hard sell" tactics and "fraudu-
lent practices have been repeatedly prosecuted, including fraud and
related unfair-business-practice actions filed by state Attorneys
General in New York, New Mexico, Florida, California and Arkansas,
and by Connecticut's Commissioner of Consumer Protection."
The Arkansas Attorney General has stated on nationwide televi-
sion that "Together is a sham operation," among other criticisms.
The letter to the SEC and FTC making the request is attached.
Further data are available at http://www.cupidnet.com/aem and addi-
tional information about the Together chain is welcome at that web
address or at Victims Together, Box 99, Kirkland, Washington 98083.
WILL KNEDLIK
Attorney at Law
206-822-1342
January 9, 1997
Mr. William R. McLucas, Director
Division of Enforcement
Securities and Exchange Commission
450 Fifth Street NW
Washington, D.C. 20549
Ms. Jodie Bernstein, Director
Bureau of Consumer Protection
Federal Trade Commission
Sixth Street & Pennsylvania Avenue NW
Washington, D.C. 20580
Re: Largest sale of unregistered securities through unregis-
tered investment advisers by use of mail-and-wire frauds
in false advertising and in scam telemarketing in all of
United States business history at $1 Billion $47 Million
Dear Mr. McLucas and Ms. Bernstein:
As the attached "UPGRADE SCRIPT" and "UPGRADE TIPS" explicitly
indicate, Together Dating Service specifically claims to consumers
that buying a so-called "membership" in the largest commercialized
dating service in the United States -- which are priced as high as
$4,995 -- constitutes an attractive "investment" that can be resold
for a substantial "profit." For example, the chain's comprehensive
Operations Manual's "UPGRADE SCRIPT" expressly claims that "you can
sell it for a lot more than your original invewtment" (sic); "you
stand to make ____ profit if you sell it for the current rate"; and
"even if you sell it for less or even just to recoup your invest-
ment[,] there's money in your pocket that you wouldn't have had and
you've met the love of your life! You can't go wrong!" Likewise,
after noting the "best time to call" retail customers ("when their
excitement level is highest"), the Manual's "UPGRADE TIPS" further
claim: "It's almost like putting the money in a temporary savings
account thats [sic] earning tons of interest, and you get to with-
drawl [sic] the money when wedding/honeymoon time comes around!"
What the attached materials cannot indicate are that this pur-
ported "investment" is foisted onto all potential retail customers
at what is often the most vulnerable point of their lives (after a
recent death of a spouse, divorce or another traumatic experience)
through very "hard sell" tactics, together with several other out-
right frauds, used by unregistered investment advisers (who are in
fact "commission only" sales people but who masquerade as so-called
"professional counselors"), and that these "high pressure" tactics
and fraudulent practices have been repeatedly prosecuted, including
fraud and related unfair-business-practice charges brought by state
Attorneys General in New York, New Mexico, Florida, California and
Arkansas, and by Connecticut's Commissioner of Consumer Protection.
Securities and Exchange Commission January 9, 1997
Federal Trade Commission Page Two of Two
What the attached materials also do not indicate is the extent
of those securities sold as an "investment" through such frauds. In
particular, given the "average" $1,495 sales price which the chain
has claimed to its bankers and potential investors, and the 700,635
so-called "members" whom it claims to have to its retail customers
(in documents of public record within litigation files), Together
Dating Service operations have already taken in over $1 Billion $47
Million by selling "dates" to "lonely hearts" (i.e. the customers,
in so-called "singles industry" terminology, whom it targets) based
upon false claims that purchasing its highly questionable "service"
constitutes an "investment" that can be resold "for a lot more than
your original invewtment" (sic); that earns "tons of interest, and
[that] you get to withdrawl [sic] the money when wedding/honeymoon
time comes around!"; and, therefore, that "[y]ou can't go wrong!"
In reality, based upon extensive research by my legal clients,
Victims Together, a Washington nonprofit corporation, and several
retail customers victimized by this securities scam, actual resala-
bility of this so-called "investment" is either nil or else nearly
so -- with virtually none reselling at any price, and with no evi-
dence that even one "investor" ever resold said "investment" secur-
ity "for a lot more than [her or his] original invewtment" (sic).
To the extent that the numbers given by the Together Dating
Service chain to its bankers, investors and customers are accurate,
retail consumers are being defrauded out of over another $2,150,000
more each week (in addition to the $1 Billion $47 Million stolen to
date). Thus, on behalf of my clients, I urge your agencies to take
all steps necessary to put a prompt end to the fraud, including but
not necessarily limited to cease-and-desist orders or an injunctive
action fully sufficient to protect all single people who have been
and are being preyed on with claims directed toward exploiting them
in what is often the most vulnerable period of their lives, so that
all fraud has been halted before St. Valentine's Day 35 days hence.
If Victims Together, the hundreds of victims cooperating with
its educational and other activities, or the undersigned can be of
any assistance, then please do feel free to call on me at any time.
Respectfully yours,
Will Knedlik
WK: dd
Enclosures
cc: Victims Together
North American Securities Administrators Association
National Association of Consumer Agency Administrators
National Association of Attorneys General
Association of Ethical Matchmakers