FUTURENET ORDERED TO PAY $1 MILLION; FUNDS TO GO IN ESCROW ACCOUNT.Byline: Ben Sullivan Daily News Staff Writer Multilevel mul·ti·lev·el adj. Having several levels: a multilevel parking garage. Adj. 1. multilevel - of a building having more than one level marketing specialist FutureNet Inc. has agreed with federal regulators to pay $1 million as a condition of relaunching its business. The funds will be placed in an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account to cover possible future damages to FutureNet's dealers and customers, under an agreement reached with the Federal Trade Commission and disclosed Monday. An initial payment of $500,000 into a ``consumer redress Compensation for injuries sustained; recovery or restitution for harm or injury; damages or equitable relief. Access to the courts to gain Reparation for a wrong. REDRESS. The act of receiving satisfaction for an injury sustained. fund'' and a separate $100,000 bond allowed FutureNet to return to full operations Monday, a month and a half after the FTC FTC See Federal Trade Commission (FTC). accused it of running an illegal pyramid scheme Pyramid Scheme An illegal investment scam based on a hierarchical setup that relies on new recruits' funding as the source of money, or so-called returns, to be provided to those earlier investors/recruits above them in the pyramid. and closed it down. The company will deposit the remaining $500,000 into the fund over the next five months, FutureNet Chairman Alan Setlin said. Setlin stressed that the FTC's requirements did not amount to penalties or fines. ``The FTC said: Would you like to be in business? Then these are the rules and regulations you must play by,'' Setlin said. ``But these are a tax-deductible expense of the corporation, not a fine.'' Before the closure, FutureNet sold an Internet device called WebTV, along with electricity and telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. through more than 30,000 distributors statewide. In late February, the FTC accused the company of actually being in the business of recruiting distributors, who paid between $99 and $694 for the right to sell the firm's goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . Under FutureNet's multilevel system, these dealers were encouraged to recruit still more distributors and as an incentive received a cut of their membership fees and future sales. The FTC claimed that to attract dealers, FutureNet exaggerated the moneymaking potential of the operation to recruits. In addition to paying the escrow and bond monies, FutureNet must now allow people to become dealers without paying an initiation fee and must refund fees within 60 days to any current dealers who request it. FTC attorneys could not be reached for comment on the settlement. The FTC has also required that FutureNet derive the majority of its future revenues from sales of merchandise, as opposed to getting them from membership fees. Setlin said the company already makes about 48 percent of its money from sales, so reaching that goal shouldn't be hard. |
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