Never one to shy away from the action, the Federal Trade Commission (FTC) filed two earnings claims-related cases in a single day. While we covered the first action – FTC v. Wellington – here, the second case is no less instructive and further underscores the FTC’s current enforcement priorities.
On April 13, the FTC announced an action against Publishing.com and its principals, Christian and Rasmus Mikkelsen, over allegedly deceptive income claims tied to online self‑publishing programs. The company primarily promoted two offerings: its core AI Publishing Academy course, priced at up to $1,995, and a Publishing Accelerator add‑on that purported to provide enhanced services such as coaching. According to the complaint, Publishing.com marketed and sold the product and related services by promising consumers substantial income from using AI-assisted tools to write and publish books. The FTC alleged that the company’s principals reinforced misleading earnings claims through their own “success” stories, including through emails asserting consumers could replicate a system that generated $1,000 to $3,000 per month in “passive income.”
The FTC alleged that the earnings claims were misleading, as most consumers did not achieve the promised earnings, with many purchasers having made no profits at all. Notably, the FTC also alleged that Publishing.com failed to disclose material connections to reviewers and promoted incentivized testimonials without proper disclosure. In addition, the complaint also pointed to allegedly restrictive and inadequately disclosed refund conditions under the company’s “no questions asked” guarantee that made it difficult for consumers to obtain refunds.
The complaint was filed alongside a stipulated order that prohibits the defendants from making misleading earnings claims or other material misrepresentations, requires clear disclosure and honoring of refund and cancellation policies, and bars misrepresentations involving endorsements and reviews. Regarding the allegations of incentivizing testimonials, the order also requires disclosures of any unexpected material connections between the company and endorsers. Additionally, the order requires payment of $1.5 million to the FTC to administer consumer refunds.
It is also interesting what is not in the complaint: any allegation that how the AI tools were marketed was deceptive. Instead, the focus was on the earnings claims being misleading. This is in line with and similar to the case announced last month involving Air AI.
Takeaways
This action, alongside Wellington, underscores that earnings claims remain squarely in the FTC’s enforcement crosshairs and that misleading practices in this space are a high priority for the current Commission. Notably, in both cases, the FTC trained its focus, at least in part, on the individual operators involved in the alleged schemes – reinforcing that this Commission is willing to focus on prominent individuals who are involved in marketing and promoting a product or service.
As such, companies making income or performance claims should ensure those claims are accurate and well substantiated and that testimonial practices comply with the FTC’s endorsements and testimonials guides. The FTC’s announcements of two similar cases in a single day signals that earnings claims enforcement is not slowing down anytime soon (and neither is the FTC keeping an eye on endorsers). This action is part of the Joint Labor Task Force Chairman Andrew Ferguson announced earlier this year to look at both antitrust and consumer protection barriers for American workers.
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As discussed throughout, Publishing.com is not the only recent FTC earnings claims-related enforcement action. For a recap of Wellington, the other enforcement action filed on April 13, check out Amy, Daniel, and Noah’s Posting with Consequences: FTC Brings Earning Claims Action Against Alleged MLM Participant.