2by2.net (closed in 2007)
Company was co-founded by Jeffrey P. Morgan and Dennis Wong and provided Internet shopping Malls the company was shut down by the FTCfor being a pyramid scheme
Mall Ventures, Inc., doing business as 2by2.net, recruited investors into their pyramid as “eCommerce Consultants” for $300 to $420 per spot. According to the FTC’s complaint, the defendants touted 2by2.net as a lucrative business opportunity in which consumers could earn over $1,000 per month if they were just “1% successful,” and up to $117,000 per month after five years of effort. Many consumers were persuaded to pay up to $2,940 for multiple spots and to spend thousands of dollars more in their attempts to make money through 2by2.net.
2by2.net’s Internet malls contained links to retail Web sites maintained by third-party merchants. The FTC alleged that 2by2.net falsely represented to its eCommerce Consultants that they could make substantial commissions on purchases made through these 2by2.net Internet malls, as well as by selling Internet access, vitamins, and prepaid long distance telephone cards. The defendants also stated that consultants were “limited” to earnings of $15,000 per week, implying that it was reasonable to hope to earn that much money as an eCommerce Consultant. As the FTC charged in its complaint, the few eCommerce Consultants who made money through 2by2.net did so by recruiting others into the program, and the vast majority of eCommerce Consultants made very little or no money, regardless of the effort expended.
The settlement with Mall Ventures and its co-founders Jeffrey P. Morgan and Dennis Wong bars them from participating in any prohibited marketing scheme, including any business that operates as a pyramid scheme. It bars them from misrepresenting the potential or likely earnings or income from any business venture, the benefits any participant can expect, and assisting others to make misleading claims. They are required to provide upfront disclosures about actual earnings and prohibited from erecting unreasonable barriers to investors who want refunds.
The order contains a suspended monetary judgment of $10.4 million, the amount of consumer injury. Based on the defendants’ financial condition, the order requires them to pay $400,000. If the court finds that the defendants misrepresented their assets to the Commission, the entire $10.4 million will become due.
Past News Stories
- May 12, 2005 FTC Cracks down on Internet Mall Pyramid Promoters Dennis Wong 2by2.net
- August 2007 FTC shuts down Dennis Wong’s company 2by2 & yor.com