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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 1 of 38 

JAMES REILLY DOLAN 

Acting General Counsel 

BRIAN N. LASKY 

NY Bar No. 3993417; blasky@ftc.gov 

CHRISTOPHER Y. MILLER 

NY Bar No. 3983160; cmiller@ftc.gov 

FEDERAL TRADE COMMISSION 

One Bowling Green, Suite 318 

New York, NY 10004 

(212) 607-2829 

(212) 607-2822 (fax) 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

UNITED STATES DISTRICT COURT 

DISTRICT OF NEVADA 

FEDERAL TRADE COMMISSION, Case No. 2:21-cv-154

Plaintiff, COMPLAINT FOR 

v. PERMANENT INJUNCTION 

AND MONETARY JUDGMENT 

SEED CONSULTING, LLC, also doing 

business as SEED CAPITAL and 

FOUNDATION FUNDING, a Nevada 

limited liability company, 

CREDIT NAVIGATOR, LLC, a Nevada 

limited liability company, 

ERIK GANTZ, individually, and as a 

principal and owner of SEED 

CONSULTING, LLC and CREDIT 

NAVIGATOR, LLC, and 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 2 of 38 

RANDY LANG, individually, 

Defendants. 

Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges: 

1. The FTC brings this action under Sections 13(b) and 19 of the Federal 

Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, Section 6(b) of 

the Telemarketing and Consumer Fraud and Abuse Prevention Act 

(“Telemarketing Act”), 15 U.S.C. § 6105, Section 410(b) of the Credit Repair 

Organizations Act (“CROA”), 15 U.S.C. § 1679h, and Section 2(d) of the 

Consumer Review Fairness Act of 2016 (“CRFA”), 15 U.S.C. § 45b, to obtain 

permanent injunctive relief, rescission or reformation of contracts, restitution, the 

refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief 

for Defendants’ acts or practices in violation of Section 5(a) of the FTC Act, 15 

U.S.C. § 45(a), the FTC’s Trade Regulation Rule entitled Telemarketing Sales 

Rule (“TSR”), 16 C.F.R. Part 310, Section 404 of CROA, 15 U.S.C. § 1679b, and 

Section 2(c) of CRFA, 15 U.S.C. § 45b. 

JURISDICTION AND VENUE 

2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 

§§ 1331, 1337(a) and 1345. 

3. Venue is proper in this District under 28 U.S.C. §§ 1391(b)(2), (c)(1), 

and (c)(2), and 15 U.S.C. § 53(b). 

SUMMARY OF THE CASE 

4. Since at least 2013, Defendants Seed Consulting, LLC, Credit 

Navigator, LLC, Erik Gantz, and Randy Lang (collectively, “Defendants”) have 

charged consumers to obtain so-called “funding” to pay for costly trainings offered 

by a number of third-party companies with whom Defendants partner. These 

include a number of companies sued by the FTC and other law enforcement 

agencies for orchestrating major deceptive schemes (the “Training Companies”). 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 3 of 38 

The Training Companies sell seminar and coaching packages costing tens of 

thousands of dollars that purport to teach consumers how to make money by 

investing in real estate or operating an online business. Defendants’ “funding” 

operation relies on customer referrals from the Training Companies, and the 

funding they provide is often pitched to consumers as a way for them to obtain 

capital to grow their nascent businesses or to invest in real estate or securities. 

5. Defendants are not in fact lenders and do not provide any form of 

financing themselves. Instead, Defendants charge consumers a fee of $3,000 or 

more to submit numerous applications for personal credit cards on behalf of their 

customers, a process known as “credit card stacking.” Defendants generally try to 

obtain at least $50,000 in total credit lines with introductory zero-percent interest 

rates for each of their customers across a half dozen or more credit cards. 

6. In order to maximize the amount of credit they obtain for consumers, 

Defendants include income figures in the credit card applications they submit on 

behalf of their customers that are substantially overstated. They justify this 

practice on the pretext that the figures purportedly reflect the additional income 

their customers can anticipate earning in the coming year by utilizing the training 

provided by the Training Companies. Defendants take other steps to manipulate 

the underwriting processes of the credit card providers, such as using credit locks 

to artificially reduce the number of credit inquiries. Defendants’ practices result in 

consumers obtaining numerous credit cards and significantly more credit than the 

banks would otherwise provide. 

7. After Defendants obtain numerous credit cards for customers, they 

routinely tell the Training Companies that the consumers now have funds available 

to them, often without the consumers’ knowledge that the Training Companies are 

being so informed. This allows the Training Companies to pitch additional costly 

products or services to the consumers. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 4 of 38 

8. In the end, most of Defendants’ customers do not earn substantial 

money through the Training Companies’ programs and, as a result, they are unable 

within a reasonable timeframe to pay off the balances from the cost of the trainings 

on the credit cards obtained by Defendants. Many of Defendants’ customers end 

up mired in debt with their credit scores in ruins. Defendants, on the other hand, 

have profited considerably from this scheme, having taken in millions of dollars 

from consumers across the country. 

PLAINTIFF 

9. The FTC is an independent agency of the United States Government 

created by statute. 15 U.S.C. §§ 4158. The FTC enforces Section 5(a) of the FTC 

Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or 

affecting commerce. The FTC also enforces the Telemarketing Act. Pursuant to 

the Telemarketing Act, the FTC promulgated and enforces the TSR, 16 C.F.R. Part 

310, which prohibits deceptive and abusive telemarketing acts or practices. The 

FTC also enforces CROA, 15 U.S.C. §§ 16791679j, which prohibits, inter alia, 

making any statement, or advising any consumer to make any statement, that is 

untrue or misleading in connection with an application for the extension of credit. 

The FTC also enforces the CRFA, 15 U.S.C. § 45b, which prohibits, inter alia, the 

offering of provisions in form contracts that restrict individual consumers’ ability 

to communicate reviews, performance assessments, and similar analyses about a 

seller’s products, services, or conduct. 

10. The FTC is authorized to initiate federal district court proceedings 

by its own attorneys, to enjoin violations of the FTC Act, the Telemarketing Act, 

CROA, and the CRFA, and to secure such equitable relief as may be appropriate in 

each case, including rescission or reformation of contracts, restitution, the refund 

of monies paid, and the disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 

57b, and 1679h(b). 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 5 of 38 

DEFENDANTS 

11. Defendant Seed Consulting, LLC (“Seed”), also doing business as 

Seed Capital and Foundation Funding, is a Nevada limited liability company with 

its principal place of business at 1707 Village Center Circle, Suite 200, Las Vegas, 

NV 89134. Seed transacts or has transacted business in this District and 

throughout the United States. At all times material to this Complaint, acting alone 

or in concert with others, Seed has advertised, marketed, or sold its credit card 

funding service to consumers throughout the United States. In addition, at times 

material to this Complaint, Seed has been the 25% owner of WCAP Business 

Services, LLC, also doing business as WCAP Financial (“WCAP”), which has 

engaged in marketing and lead generation services for Seed. 

12. Defendant Credit Navigator, LLC (“Credit Navigator”) is a Nevada 

limited liability company with its principal place of business at 1707 Village 

Center Circle, Suite 200, Las Vegas, NV 89134. Credit Navigator transacts or has 

transacted business in this District and throughout the United States. At all times 

material to this Complaint, acting alone or in concert with others, Credit Navigator 

has advertised, marketed, or sold its service for obtaining consumers’ credit reports 

and credit monitoring to consumers throughout the United States. 

13. Seed and Credit Navigator are collectively referred to herein as the 

“Corporate Defendants.” 

14. Defendant Erik Gantz (“Gantz”) is the principal owner of the 

Corporate Defendants and the managing partner of Seed. At all times material to 

this Complaint, acting alone or in concert with others, he has formulated, directed, 

controlled, had the authority to control, or participated in the acts and practices of 

the Corporate Defendants, including the acts and practices set forth in this 

Complaint. Defendant Gantz resides in this District and, in connection with the 

matters alleged herein, transacts or has transacted business in this District and 

throughout the United States. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 6 of 38 

15. Defendant Randy Lang (“Lang”) is a Utah resident. At all times 

material to this Complaint, acting alone or in concert with others, he has 

formulated, directed, controlled, had the authority to control, or participated in the 

acts and practices of the Corporate Defendants, including the acts and practices set 

forth in this Complaint. In addition, at times material to this Complaint, Lang has 

been the 75% owner of WCAP. Defendant Lang, in connection with the matters 

alleged herein, transacts or has transacted business in this District and throughout 

the United States. 

COMMON ENTERPRISE 

16. The Corporate Defendants are closely held companies that have 

operated as a common enterprise while engaging in the deceptive acts and 

practices and other violations of law alleged below. The Corporate Defendants 

have conducted the business practices described below through interrelated 

companies that have common ownership, officers, managers, business functions, 

employees, and office locations. Also, the Corporate Defendants commingle funds 

and rely on a shared method to identify potential customers. Because these 

Corporate Defendants have operated as a common enterprise, each of them is 

jointly and severally liable for the acts and practices alleged below. Furthermore, 

Gantz and Lang (collectively, the “Individual Defendants”) have formulated, 

directed, controlled, had the authority to control, or participated in the acts and 

practices of the Corporate Defendants that constitute the common enterprise. 

COMMERCE 

17. At all times material to this Complaint, Defendants have maintained a 

substantial course of trade in or affecting commerce, as “commerce” is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 7 of 38 

DEFENDANTS’ BUSINESS ACTIVITIES 

A. Seed’s Business Practices and Referral Relationships 

18. Seed was formed in 2009 in the State of Nevada by defendant Gantz 

and another individual. Gantz is now the sole owner of Seed. 

19. Defendants market Seed’s services as obtaining purported “funding” 

or “financing” for consumers to start or grow a business. 

20. Seed’s “funding” comes about through a process known as credit card 

stacking, whereby Seed prepares and submits applications for numerous personal 

credit cards that typically come with introductory zero-percent interest rates. The 

credit cards are offered by third-party financial institutions that are unaffiliated 

with Seed and with whom Seed does not have a business relationship. In its 

customer contracts, Seed guarantees that it will obtain a specified amount of 

funding for consumers, often $50,000. By stacking together the various credit 

lines on the credit cards it obtains for its customers, Seed purports to satisfy this 

guarantee. Seed charges its customers a fee of between $3,000 and $4,000 for this 

service and usually collects its fee from one of the new credit cards it obtains for 

consumers. 

21. In its initial three years, many of Seed’s customers were individuals 

seeking funding to open or grow a new location of a national franchise. Since at 

least 2013, however, Seed has largely worked with customers referred to it by 

companies that sell training programs on how to purportedly make money through 

a new business or through investments, including the Training Companies. 

22. The Training Companies’ programs take a variety of forms, including 

programs that purport to teach consumers how to generate income by investing in 

real estate, by selling stocks or options, or through operating an online business, 

such as on eBay or Amazon. Referrals from providers of training services now 

generate a majority of Seed’s customer base. Only a small percentage of Seed’s 

business now comes from its work with franchisees. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 8 of 38 

23. The trainings and coaching services offered by the Training 

Companies are expensive, with prices often in the tens of thousands of dollars. In 

order to induce consumers to pay these amounts, the Training Companies often 

represent to consumers that they will earn substantial income as a result of the 

trainings and coaching services, such as several thousand dollars of additional 

monthly income. In actuality, however, the great majority of consumers who 

purchase the trainings and coaching services typically do not earn the promised 

substantial income or even recoup the money they paid to the Training Companies. 

24. Defendants provided “funding” services in connection with many 

training and coaching schemes that have been the subject of law enforcement 

actions, including FTC lawsuits. These enforcement actions have alleged, among 

other things, that the Training Companies misrepresented that consumers who 

purchased their trainings and coaching services were likely to earn substantial 

incomes through online businesses or real estate investments. See FTC & Utah 

Div. of Consumer Prot. v. Nudge, LLC, No. 19-cv-00867-RJS (D. Utah) (complaint 

filed on Nov. 5, 2019) (real estate training scheme); FTC & Utah Div. of Consumer 

Prot. v. Zurixx, LLC, No. 19-cv-00713-DAK (D. Utah.) (complaint filed on Sept. 

30, 2019) (real estate training scheme); Utah Div. of Consumer Prot. v. Stevens, 

Case No. 190907053 (Utah Dist. Ct.) (complaint filed on Sept. 6, 2019) (real estate 

training scheme doing business as “Real Estate Workshop”); FTC v. MOBE Ltd., 

No. 18-cv-00862-RBD (M.D. Fla.) (final order against corporate defendants 

entered on Apr. 13, 2020) (online business training scheme); FTC v. Digital 

Altitude LLC, No. 18-cv-00729-JAK (C.D. Cal.) (final order entered on Mar. 6, 

2019) (online business training scheme); FTC & State of Minn. v. Sellers 

Playbook, Inc., No. 18-cv-02207-DWF (D. Minn.) (final order entered on Nov. 20, 

2018) (online business and business opportunity scheme); FTC v. AWS, LLC, No. 

18-cv-00442-JCM (D. Nev.) (final order entered on Jun. 15, 2018) (online business 

training scheme doing business as “FBA Stores”); FTC v. Apply Knowledge, LLC, 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 9 of 38 

No. 14-cv-00088-DB (D. Utah) (final order entered on February 16, 2016) (online 

business coaching scheme doing business as “Coaching Department”). 

25. During the time period relevant to this Complaint, the two largest 

sources of customer referrals to Seed were real estate training and coaching 

schemes Nudge, LLC and its affiliated entities (collectively, “Nudge”) and Zurixx, 

LLC and its affiliated entities (collectively, “Zurixx”), both of which are based in 

Utah. 

26. Nudge and Zurixx have each referred customers to Seed since at least 

2016. Defendant Lang, who has longstanding ties to the business coaching and 

training industry, has established the referral arrangements between Seed and most 

of the Training Companies, including Nudge and Zurixx. In addition, Lang, both 

individually and through his company WCAP, has provided various marketing and 

lead generation services to Seed. In exchange, Seed has paid WCAP, which is 

75% owned by Lang, a share of all of the customer sales WCAP generates. Once 

the referral arrangements with the Training Companies have been established, 

Defendant Gantz generally handles the ongoing management of Seed’s 

relationships with these companies. Gantz regularly communicates with the 

Training Companies and has attended many of their training events, including 

numerous Nudge seminars. 

27. Between approximately 2010 and 2014, Lang co-owned Daeus 

Financial (“Daeus”) with Zurixx officers Jeffrey Spangler and Cristopher Cannon. 

Daeus sold various add-on services to consumers referred to it by business 

coaching and training companies. Since at least 2012, Spangler and Cannon have 

co-owned Zurixx with a third individual. Through his relationship with Zurixx’s 

owners, Lang established the referral arrangement between Zurixx and Seed. As a 

result, at times material to this Complaint, Seed paid a $750 commission to WCAP 

for customers referred to Seed by Zurixx. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 10 of 38 

28. Similarly, Lang established the referral arrangement between Nudge 

and Seed through his relationship with one of Nudge’s owners. As a result, at 

times material to this Complaint, Seed paid a $1,000 commission to WCAP for 

customers referred to Seed by Nudge. 

29. Lang has also provided Seed with customer service support with 

respect to consumers who submitted complaints to the company or to government 

agencies or who complained online, including on websites maintained by the 

Better Business Bureau (“BBB”). Lang has often used a “seedcapital.com” email 

address to communicate with these consumers. According to Lang, WCAP 

formally ceased marketing for Seed in March 2019, but Lang continues to assist 

Seed with both lead generation and support with respect to consumer complaints in 

his individual capacity. 

30. Gantz often asks Lang to handle the most serious customer complaints 

concerning Seed or the Training Companies, while a Seed customer service 

representative covers the others. Lang or the Seed representative typically speaks 

to the consumer complainants to identify their concerns and assess whether they 

intend to pursue their complaints publicly or with government agencies or BBBs. 

This information is then conveyed to Gantz along with a refund recommendation, 

with Gantz responsible for approving any refund offers. 

31. Numerous consumer complaints received by Defendants state that 

consumers are unable to profitably implement the Training Companies’ strategies, 

that the trainings and coaching services themselves are of limited value, that 

consumers take on substantial debt to pay for the trainings and coaching services, 

and that their credit scores often plummet as a result of being unable to timely 

repay these debts. 

32. Defendants routinely coordinate their responses to these complaints 

with the Training Companies and, in many instances, have attempted to suppress 

consumer criticisms of their business practices and their relationships with the 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 11 of 38 

Training Companies. Defendants have frequently tried to convince consumers to 

withdraw public complaints and reviews, including consumers’ online submissions 

to the BBB. In addition, Defendants have attempted to prevent consumers from 

publicizing their experiences or cooperating with government entities by using 

refund agreements with consumers that contain a “Non-Disparagement” provision. 

This clause in Defendants’ form agreement purports to prevent consumers from 

making verbal or written statements “that might reasonably be construed to be 

derogatory or critical of, or negative toward” Defendants. 

33. Consumer complaints received by Defendants about the Training 

Companies include the following: 

• In April 2017, Gantz authorized a refund for a consumer who told a Seed 

representative that “she quickly became aware that the service” she 

purchased from FBA Stores, a Training Company that purported to show 

consumers how to make money by selling on Amazon, “was essentially 

useless and that there was no way” her new business would generate 

enough sales to pay off her credit card debt. The Seed representative 

described the consumer as “intelligent” and “likely a serious career 

professional,” who also complained that FBA Stores was a “scam” that 

“use[s] your company [Seed] to[] secure funds so that they can be paid.” 

Lang quickly reported to FBA Stores that this was “a 911” situation 

involving a consumer who had reached out to “government agencies,” 

adding that Seed was giving a full refund and advising that FBA Stores 

should do the same. 

• In February 2017, Lang and Gantz learned about a complaint by a Nudge 

consumer who had a “very debilitating” case of multiple sclerosis that 

prevented him from walking very far and continuing to do his job. 

Before he enrolled in the training program, the consumer explained to 

Nudge that he has “many limitations,” but Nudge employees assured him 

that “he could do it and it would all be ok.” Contrary to these promises, 

the consumer told Seed customer service representatives that he was 

“unable” to use the Nudge training, that the real estate program “wasn’t 

being very helpful,” and that Nudge representatives “weren’t hearing me 

every time I explained my disability issues.” After the consumer learned 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 12 of 38 

that he could not use the credit cards he obtained through Seed to invest 

in real estate at a Nudge event, the consumer said he would use the 

internet to “expose” Nudge because “it wasn’t fair what they did to us.” 

In his report to Gantz and Lang, a Seed representative commented that, if 

true, “it appears to me to be a classic Bait & Switch plus a whole bunch 

o’nother things that ain’t good.” When Gantz was informed of the 

complaint, he warned Lang and others, “We need to head this off.” 

• In December 2017, a Seed customer service representative emailed Gantz 

and Lang about a consumer who “said that every bit of his Seed [$]78k 

has been used to pay Response [a Nudge affiliate] for all the various 

programs they told him he needed.” The consumer complained that “he 

has been working very hard to complete RE [real estate] deals but that 

basically Response isn’t doing anything for him” and added that “he 

considers their website to be a joke and so he sees no reason to try and 

use it anymore, with Zillow and Redfin, etc. being a lot more useful.” 

Gantz forwarded this email to a Nudge employee to ensure that the 

consumer was “on your radar.” 

• In February 2018, a Nudge representative contacted Gantz about a 

consumer complaint to a government agency for which Nudge was 

providing a refund and “recommend[ed]” that Seed do the same. In his 

complaint, the consumer alleged that “absolutely nothing was learned” at 

a Nudge training event; instead there were “teases” about “what could be 

taught” if he purchased another training package. According to the 

consumer, after he purchased the additional package, he was taught 

strategies like putting up public signs offering to sell “moldy” homes 

without actually having any such homes to sell. The consumer alleged 

that this tactic was both “deceitful” and “100% illegal” in his home state 

without a real estate license. 

• In May 2018, a customer emailed a Seed representative complaining that 

he had “followed ever[y]thing my MOBE business partners have told me 

in everyway [sic] . . . but [I] have not made any money,” that “I have paid 

out to the cards almost all my savings” and “[I] have sold ever[y]thing of 

value [I] own and [I’m] almost financially ruined.” The consumer 

recounted that MOBE, a Training Company that purported to teach 

consumers how to start an online business, had previously “assur[ed] me 

there would be plenty of sales and it would be easy to pay back the cards. 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 13 of 38 

. . . not so.” Gantz forwarded this email to his contacts at MOBE with a 

simple “Pls see below.” 

• In January 2019, Lang authorized a refund for a consumer who had taken 

training through Sellers Playbook, another Training Company that 

purported to teach consumers how to make money selling on Amazon. 

The consumer agreed to withdraw an online BBB complaint that alleged 

that WCAP, which enrolled many of Seed’s customers, “can definitely 

help get you money, but they leave you with a hot credit card mess that 

may devastate you, and then refuse to return your calls. . . . Just don’t do 

it!!!!! They affiliate with business scammers!!!!!!” 

• In February 2019, Gantz agreed to a refund and settlement with a Zurixx 

customer to “[e]nsure we [Seed] are left out” of future complaints. In 

requesting the refund, the consumer had told Seed that “[e]verything 

[Zurixx] promised us turned out to be a lie” and that “[t]his is not a legit 

company” while noting that she took out a home equity loan to help pay 

down over $50,000 in credit card charges that had “destroyed” her credit. 

34. Through consumer complaints such as these, as well as their 

coordination with the Training Companies to respond to these complaints, 

Defendants have repeatedly been made aware of the deceptive practices of the 

Training Companies. Despite this knowledge, Defendants have continued to work 

with Training Companies because of the lucrative referrals they generate. 

Thousands of consumers referred by the Training Companies have become Seed’s 

customers. 

35. For example, between April 2017 and November 2019, consumers 

referred by Nudge and Zurixx paid Seed more than $10 million in fees. Gantz and 

Lang, in turn, received substantial distributions of these revenues through closely 

held companies that they control. 

36. The arrangement has also been a financial boon to the Training 

Companies. Seed’s services have resulted in its customers having increased credit 

available to them, thereby enabling the Training Companies to deceptively sell 

additional, costly training and coaching programs to consumers. For example, 

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Seed obtained more than $230 million in available credit card lines for the 3,840 

consumers that were referred to the company by Nudge between February 2016 

and May 2018. Moreover, Seed has paid many of the Training Companies a 

commission for their referrals, including at least $250,000 paid to Nudge. 

B. The Marketing of Seed’s Credit Card Stacking Services 

37. Defendants rely extensively upon the Training Companies to market 

Seed’s services. Many of Seed’s customers first learn about the company when it 

is pitched at seminars held by one of the Training Companies. Seed has provided 

training to Training Companies’ salespeople on how to promote Seed’s services to 

consumers. 

38. In the case of Nudge and Zurixx, Seed’s services are typically first 

marketed to consumers at “Workshops” by the Training Companies’ presenters 

from the front of the seminar room. Workshops are the second stage in the 

companies’ seminar sales cycle. This sales cycle begins with free “Preview 

Events” that largely serve to market the three-day Workshops, which typically cost 

at least $1,000. The Workshops, in turn, market additional, more expensive 

“Advanced Trainings” that typically cost tens of thousands of dollars. Given the 

substantial cost of the Advanced Trainings, Nudge and Zurixx often promote Seed 

to consumers at the Workshops as a source of additional capital. 

39. Even after consumers purchase one of the Advanced Training 

packages, some of the Training Companies, including Nudge and Zurixx, attempt 

to sell additional products and services to their customers, including purported 

personalized coaching programs (“Coaching Programs”) that often cost tens of 

thousands of dollars more. The Training Companies use outbound telemarketing 

to sell the Coaching Programs to consumers. The funding Seed obtains for 

consumers is often used by consumers to purchase the Training Companies’ 

Advanced Trainings and Coaching Programs. 

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40. At the Workshops, the presenters often describe Seed’s financing as a 

tool to provide consumers with capital to use to purchase real estate properties and 

grow their real estate businesses. They market Seed this way even though the 

primary reason the Training Companies partner with Seed is so that consumers 

have access to credit to pay for their trainings and coaching services. To lend 

credibility to Seed, the Training Companies’ presenters frequently tout Seed’s prior 

work with individual franchisees, even though most of Seed’s business now comes 

through training providers. 

41. Often, the Training Companies’ presenters do not explain that Seed 

does not itself provide any funding to consumers, but rather only submits 

numerous credit card applications to third-party financial institutions on behalf of 

its customers in exchange for a fee. Many presenters only vaguely indicate that the 

“funding” comes with a zero-percent interest rate for a period of time. 

42. For example, at a July 19, 2019 Workshop, a Zurixx seminar presenter 

described Seed (operating under the name “Foundation Funding”) as offering 

“unsecured loans” or “cash lines of credit” for consumers to use to invest in real 

estate: 

Now, the company -- because we have thousands of successful 

investors doing lots of deals -- has made a special relationship with us. 

You cannot go out and find this on your own. The company spent a 

lot of time and money doing this. The company, called Foundation 

Funding, has done over a billion dollars of entrepreneurial investing 

lending. . . . And they, again, are making a lot of money. The interest 

rate is introductory for a year, zero. They make a lot of money doing 

that. They’ve helped franchises and other businesses like 7-Eleven, 

FedEx, Subway, Coldstone, Nike. These are the top businesses in 

America and they fund us. Why do they fund us? Because they know 

our students are better trained doing good deals. Correct? And 

they’ve offered this special opportunity. So they will help you with 

your real estate business. Right? They’re A-plus rated and it’s zero 

percent financing up to $150,000 unsecured. . . . These are unsecured 

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loans. . . . Now, you get $10,000 to $100,000 in cash lines of credit at 

zero interest. 

43. Many of Seed’s customers understand from statements like these that 

Seed would provide them capital directly, either through a loan or line of credit. 

These consumers do not understand that Seed merely sends out numerous 

applications for personal credit cards that come with teaser introductory rates and 

charges a fee of $3,000 or more for this service. 

44. Many consumers would not have purchased Seed’s services if they 

understood that the purported “funding” comes in the form of multiple personal 

credit cards. Among other reasons, the post-introductory period interest rates on 

these credit cards typically are relatively high compared to other forms of credit, 

often exceeding 15%. In addition, many consumers purchase the funding with the 

goal of using the capital to purchase real estate properties. In order to use a credit 

card to purchase real estate, consumers usually must take a cash advance on their 

credit card. Cash advances often entail substantial fees, as well as higher rates of 

interest compared to the typical interest rates for consumer credit cards. 

45. Although Seed’s employees often do not attend the trainings, 

Defendants know that the Training Companies routinely promote Seed’s services 

in an inaccurate manner. On numerous occasions, Defendants have failed to 

correct the Training Companies’ misrepresentations prior to the time consumers 

decide to purchase Defendants’ services. Defendants have the authority to require 

that Seed’s services be correctly described by the Training Companies, but have 

failed to do so. 

46. For example, in an internal email from March 2018, a Seed customer 

service representative wrote to Defendants Gantz and Lang, among others, that 

“[a]t these [training] events they generally do a pretty slick job of selling their 

students on how they will be working hand in hand with everyone in their network 

to make sure all the client’s needs will be met, while also going on and on about 

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OVER $1.7 BILLION RAISED SINCE 2008. 

Funding a startup is one of the most difficult challenges any entrepreneur will face. Having personally 

founded over a dozen startups, the Seed Capital executive team understands just how difficult it is to 

secure funding and turn an idea into reality. 

Seed Capital's mission is to assist entrepreneurs in financing their start-ups through innovative funding and 

credit building techniques. By providing the cash credit lines needed to launch a business our clients 

benefit from our team's vast knowledge and experience, and our policies have been created to ensure that 

the motivations of our clients and our firm are clearly aligned. 

Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 17 of 38 

how everyone involved (including Seed) are cutting edge experts in this and that 

and we will all know exactly what they need even before they know they need it 

and so on blah blah blah.” The representative added that “[a]nd then you add an 84 

year-old to the mix and you just pray there won’t be any problems.” 

47. Seed’s own website (www.seedcapital.com) (“Seed Website”) is 

consistent with how the Training Companies’ presenters describe the company’s 

funding. The term “credit cards” does not appear anywhere on the Seed Website; 

instead, the website only vaguely mentions that Seed has raised over “$1.7 billion” 

through “cash credit lines”: 

C. Defendants’ Qualification and Enrollment Process 

48. After promoting Seed’s services, the Workshop presenters encourage 

consumers to find out whether they qualify for funding through Seed during a 

break in the Workshops. Consumers who qualify are then encouraged to enroll 

with Seed onsite during the Workshops. At the same time, many of these 

consumers also sign up for expensive Advanced Training packages that were 

pitched by the Training Companies during the Workshops through deceptive 

claims that they could earn substantial sums of money. The Advanced Training 

packages typically range in cost from approximately $20,000 to as much as 

$45,000. 

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49. Presenters at the Workshops instruct consumers to enter their personal 

information on a website called CreditNav to determine if they qualify for funding 

through Seed. CreditNav is owned and operated by Defendant Credit Navigator. 

50. CreditNav pulls credit reports from the three major credit bureaus 

(Equifax, Experian, and TransUnion) for consumers and determines whether they 

qualify for Seed’s services. In order to qualify, a consumer typically must have a 

credit score that is at least in the high 600s, signifying good credit, but Seed has 

enrolled consumers with lower credit scores in some circumstances. CreditNav 

sorts applicants into three groups: (1) those who qualify “as is;” (2) those who will 

qualify if their credit profile is “fixed” in certain ways; and (3) those who do not 

qualify. 

51. Defendants refer to consumers in the second group, “if fixed,” as 

“contingent file” consumers. At the Workshops, presenters often tell consumers 

that Seed can help fix any issues in their credit reports so that they will be able to 

proceed with Seed’s funding. 

52. For example, at a July 19, 2019 Workshop, a Zurixx speaker 

encouraged consumers to sign up with CreditNav as follows: 

There’s more money -- more deals than money. So there’s no risk in 

applying. They’ll also – if there’s -- by the way, about 20 percent of 

you they’ll say, hey, there’s a mistake on your stuff; let’s fix it or let 

me help you fix it. Got it? And that’s what happened to me. There 

was a mistake on mine and they fixed it for me. 

53. The CreditNav reports for contingent file consumers include an “If 

Fixed” section that describes how the consumers’ credit reports will need to be 

improved in order to qualify for Seed’s service. Based on the CreditNav reports, 

Defendants work with consumers on the items identified in the “If Fixed” section 

of the reports, sometimes with the help of representatives of the Training 

Companies. Defendants assist consumers in disputing and removing negative 

items, such as collections or tax liens, and paying down existing credit card 

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balances so that the consumers are not utilizing more than 45% of their existing 

credit card lines. The CreditNav report provides the precise dollar amount that 

consumers need to pay down to get below this threshold. In many cases, Seed 

itself interacts with the credit bureaus in order to improve consumers’ credit 

profiles and submits the relevant documentation, such as the proof of a new credit 

card balance, directly to the bureaus. 

54. During the process of fixing consumers’ credit profiles, Seed regularly 

monitors consumers’ credit profiles with the three credit bureaus through 

CreditNav. If the bureaus accept the information provided by Seed and update the 

consumer’s credit record, Seed then begins the credit card application process on 

behalf of the customer. As explained below, however, any improvements in 

consumers’ credit profiles are often temporary. By the conclusion of the 

application process, many consumers have suffered a significant decline in their 

credit scores. 

55. At the time of enrollment, Seed’s customers sign a “Business 

Consulting Services Agreement” (the “Consulting Agreement”) that sets forth the 

terms of Seed’s service. The Consulting Agreement defines Seed as the 

customer’s “Consultant” and provides that “Consultant” will provide “consulting 

services and assistance related to establishing financial and credit accounts of [sic] 

behalf of Client and Client’s business.” The standard form Consulting Agreement 

does not mention the Training Companies, and they are not a party to the contract. 

56. Under the Consulting Agreement, Seed’s initial fee becomes due 

when Seed helps a consumer obtain credit cards with total available credit lines in 

excess of the “capital acquisition performance guarantee” (“CAPG”) specified in 

the contract. The CAPG is typically $50,000, but in some cases the threshold is 

$25,000. Depending on the referral source, Seed’s fee is between $3,000 and 

$4,000, regardless of the CAPG. Seed typically collects its fee by charging one of 

the new credit cards it obtains for its customers. 

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57. An attachment to the Consulting Agreement discloses certain 

“highlights” of Seed’s program, including that “[f]unding comes in the form of 

unsecured credit cards,” “[t]he funding total will be achieved across multiple credit 

lines; 6-8 on average,” the “[l]ines of credit will be 0% on average, for the first 12-

18 months,” and the “fully indexed interest rate, after the 0% period, will be 

between 8-15%, based on a student’s exact credit profile.” In numerous instances, 

the highlights document is the first time it is revealed to consumers that Seed’s 

“funding” comes in the form of multiple personal credit cards. The document is at 

odds with the prior statements by the Training Companies’ presenters and the 

language on the Seed Website that leads many consumers to understand that Seed 

would be providing a loan or line of credit to consumers, rather than merely 

submitting personal credit card applications. 

D. Seed Causes Credit Card Applications Containing Inflated 

Income Figures to Be Submitted to Credit Issuers 

58. Within a few days of enrolling a new customer, a Seed representative 

typically calls the customer to discuss Seed’s process. This call is commonly the 

first contact between the customer and a Seed employee. Up to this point, the 

customer typically engages only with representatives of the Training Companies 

about Seed’s funding. 

59. Among other things, on the call, the Seed representative often 

discusses the income figure that Seed will list in the credit card applications it 

submits on behalf of its customers. The applications do not mention the name of a 

business or any business purpose and therefore are treated by the issuers as 

applications for personal credit from consumers. The issuers require such 

applications to include income figures in order to comply with legal requirements 

that they consider a consumer’s ability to pay in connection with an application for 

personal credit. 

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60. Specifically, Regulation Z, 12 C.F.R. Part 1026, implements the Truth 

in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. Regulation Z requires credit 

issuers to consider a consumer’s ability to pay before opening a new personal 

credit card account or increasing the credit limit on an already-existing account. 

12 C.F.R. § 1026.51. In making this determination, the issuer must consider “the 

consumer’s ability to make the required minimum periodic payments under the 

terms of the account based on the consumer’s income or assets and the consumer’s 

current obligations.” Id. 

61. Regulation Z further requires that card issuers maintain reasonable 

policies and procedures to consider the consumer’s ability to pay, including 

“treating any income and assets to which the consumer has a reasonable 

expectation of access as the consumer’s income or assets, or limiting consideration 

of the consumer’s income or assets to the consumer’s independent income and 

assets.” Id. 

62. In its official commentary on Regulation Z, the Consumer Financial 

Protection Bureau states that when card issuers assess a consumer’s income in 

making an ability to pay determination, the issuers “may consider any current or 

reasonably expected income” of the consumer. 12 C.F.R. § 1026.51(a)(1)(i), cmt. 

4i, Supp. 1. The commentary further explains that “[c]urrent or reasonably 

expected income includes, for example, current or expected salary, wages, bonus 

pay, tips, and commissions.” Id. at 12 C.F.R. § 1026.51(a)(1)(i), cmt. 4ii, Supp. 1. 

As a result, some card issuers define income in their credit card applications to 

include amounts that consumers “reasonably expect” to earn. 

63. Other card issuers do not incorporate the concept of reasonably 

expected earnings into the definition or examples of income that appear in their 

credit card applications. Nonetheless, Seed has obtained approvals for applications 

submitted to these issuers that incorporate projected income in the income figures 

listed in the applications. Seed submits its credit card applications on a “stated 

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Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 22 of 38 

income” basis, without providing any support for the income figures. The 

applications do not distinguish consumers’ current incomes from any projected 

income. 

64. In numerous instances, Seed’s employees have represented to Seed’s 

customers that they can expect to earn substantial additional income through the 

programs provided by the Training Companies and that this additional, projected 

income should be included in the credit card applications. 

65. In many cases, Seed’s representatives suggest to consumers that they 

should reasonably expect to earn an additional $100,000 or more of income in the 

next year. As a result, the credit card applications that Seed prepares and submits 

on behalf of consumers routinely include income figures that exceed consumers’ 

current annual income by $100,000 or more. 

66. Defendants do not have a reasonable basis to include, or to encourage 

consumers to include, substantial projected income amounts in the income figures 

listed in consumers’ credit card applications. To the contrary, most consumers 

referred to Seed do not earn substantial additional income by implementing the 

Training Companies’ programs. Indeed, the majority of Seed’s customers do not 

even recoup the cost of the programs they purchased from the Training Companies. 

67. During their calls with consumers, Seed representatives often 

complete an “Ability to Repay/Income Calculation Worksheet” (“Income 

Worksheet”). Seed uses the Income Worksheets to record the income that Seed 

will list in the credit card applications it submits. 

68. Until at least February 2018, the Income Worksheets that Seed used 

with all of its customers listed three categories of consumers’ purported income: 

“Current Income,” “Anticipated/Projected Income,” and “Income of others in 

which you have Reasonable Access.” The Income Worksheets define 

“Anticipated/Projected Income” as “[a]ny income that is reasonably expected to be 

earned over the next 12 months,” including “income from a new business, 

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investments (properties or otherwise), new or additional employment, settlement, 

etc.” Seed representatives total the amounts listed in each of these three income 

categories and list the cumulative figure as the consumer’s income in the credit 

card applications they submit. 

69. In a sample of 317 Income Worksheets completed by a Seed 

representative for Nudge customers, nearly half (140 out of the 317) of the 

worksheets indicated that the consumers had a current income of $50,000 or less. 

Conversely, nearly two-thirds (185 out of the 317) of the worksheets indicated that 

the consumers had an additional projected income of at least $100,000. Notably, 

105 of these worksheets listed a projected income of exactly $100,000. 

70. In February 2018, at Nudge’s request, Seed modified the Income 

Worksheet it used with Nudge-referred customers to delete the reference to 

“Anticipated/Projected Income.” Nonetheless, Seed continues to include figures 

that incorporate substantial projected income amounts in the credit card 

applications it submits on behalf of its customers. Seed does not have a reasonable 

basis to include substantial projected income in the applications it submits. 

71. Seed’s listing of inflated incomes in the credit card applications it 

submits on behalf of its customers interferes with credit issuers’ capacity to 

accurately perform their consumer ability to pay analysis. Through this conduct, 

Seed causes issuers to extend credit to consumers under false pretenses and the 

conduct results in the company obtaining more credit for its customers than it 

would otherwise obtain absent this income inflation. 

E. Seed Further Undermines the Credit Issuers’ Underwriting 

Processes 

72. After the initial customer call, Seed employees submit numerous 

credit card applications to third-party financial institutions seeking personal credit 

cards on behalf of its customers. Seed does not have a special relationship with 

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these financial institutions, and the credit cards it helps obtain are widely available 

to the general public. 

73. The credit card applications do not disclose that Seed, and not the 

consumer, prepared and submitted the applications. Most of the applications are 

submitted online and Seed either creates, or directs its customers to create, a new 

email account that Seed includes in the applications. Seed requires its customers to 

provide Seed access to this email account so that the company may monitor the 

status of the applications without the issuers becoming aware of Seed’s 

involvement in the application process. 

74. A smaller number of credit card applications are submitted by phone. 

In an August 2017 email to a new customer, a Seed representative explained 

“Phone application – We will do your phone applications for you.” Seed directs its 

customers not to mention that they are working with a third party if a credit issuer 

contacts the customer about a credit card application. 

75. Seed submits the credit card applications in a manner that is designed 

to subvert the normal underwriting processes of the credit issuers. Defendant 

Gantz is the individual primarily responsible for the development of Seed’s credit 

card application process. 

76. In ordinary circumstances, consumers receive a “hard inquiry” on 

their credit reports every time they submit a credit card application. Hard inquiries 

occur when a bank or other financial institution checks a consumer’s credit in 

connection with making a lending decision. “Soft inquiries” occur when a 

consumer checks his or her own credit or when credit card companies preapprove 

potential customers for credit card offers. Unlike soft inquiries, hard inquiries 

appear on consumers’ credit reports and impact their credit scores. 

77. Credit issuers’ underwriting algorithms identify when consumers have 

a significant number of hard inquires on their credit reports within a short period of 

time. When that occurs, the issuer may either deny the credit application or require 

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additional information from the consumer. This is because numerous credit 

inquiries may signal that a consumer is experiencing financial distress or plans to 

overspend. 

78. Seed uses several tactics to undermine the issuers’ underwriting 

processes. For example, Seed has employed credit locks to block the credit 

issuers’ ordinary credit pulls. Credit locks restrict access to consumers’ credit 

reports and are normally used by consumers to prevent identify theft, including the 

unauthorized opening of new accounts in their names. Seed has used locks to try 

to force credit issuers to only check a consumer’s credit with one credit bureau 

while the others are locked, thereby reducing the number of hard credit inquiries in 

connection with an application. This tactic helps hide the fact that Seed applies for 

numerous credit cards for each consumer and allows the company to obtain 

additional credit for consumers. 

79. Seed also compiles information on how quickly credit issuers review 

their credit card applications and which of the three major credit bureaus (Equifax, 

Experian, or TransUnion) the issuers use to conduct hard inquiries. Based on this 

information, Seed times and sequences the submission of its applications to 

minimize the number of credit inquiries associated with the consumer. As Seed 

explains in one of its promotional materials: 

Seed Capital’s understanding of each individual bank’s underwriting 

is so in-depth, we even know what bank will pull which credit bureau 

based on a client’s geography. Unlike other companies that take a 

shotgun and hope approach, Seed Capital employs a highly surgical 

strategy to bank application submissions, ensuring that inquiries are 

evenly distributed over all three bureaus. This makes certain that our 

clients will never be declined for “excessive inquiries” (which is the 

most common decline code and is nearly impossible to overturn) and 

it guarantees the highest degree of protection to our clients’ credit. 

80. The overall effect of Seed’s tactics is to reduce the number of credit 

inquiries on its customers’ accounts and thereby prevent the credit bureaus and 

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11. CONFIDENTIAL INFORMATION. Consultant ,icknowledges that it may receive statutorily confidential personal information during 

the performance cif the. Services. Consultant agrees that such information Is of a highly confidential nature, and that, unless 

Consultant has the prior written approval of Client, both during and after the Term of this Agreement, Consultant shall not, without 

the prior written consent of Client; (i) use or disclose to any third party any details regarding Client or Client's business, including, 

without limitation any information regarding any of the Client's customer information, business plans, or price points (the 

''Confldentlol Information"), (ii) make copies of any-confidential Information or any content based on the concepts contained within 

the Confidential Information for personal use or for dlstrlbution, or (iii) use the Confidential Information other than solely for the 

benefit of Client; e>tcept that Consultant may disclose Confidential Information to persons who may be de•signated to work with 

Consultant in order to provide the Services. 

Case 2:21-cv-00154 Document 1 Filed 01/29/21 Page 26 of 38 

credit issuers from obtaining an accurate understanding of consumers’ credit 

profiles. These actions undermine the issuers’ credit underwriting decisions and 

cause them to offer credit to consumers that they would not otherwise offer and 

that exceeds the consumers’ ability to pay. 

F. Defendants Disclose Consumers’ Private Financial Information to 

the Training Companies 

81. In the standard form Consulting Agreement, Defendants pledge that 

they will not “without the prior written consent” of their client “use or disclose to 

any third party any details regarding Client or Client’s business” and that they will 

not use the client’s confidential information “other than solely for the benefit of 

Client”: 

82. Despite these guarantees, Defendants routinely disclose consumers’ 

private financial information to the Training Companies without consumers’ 

knowledge or consent. 

83. For example, Defendants regularly notify the Training Companies 

when their customers have obtained new credit cards – and even the specific cards 

and amounts they have obtained – so that the companies may pitch additional 

coaching or training programs for which the consumers have not previously 

enrolled. This information allows the Training Companies to target consumers 

who have available credit and to determine what level (i.e., cost) of programs to 

pitch to those consumers based upon the amount of credit they have available. In 

many instances, Defendants have purposefully concealed from consumers these 

communications with the Training Companies. 

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84. In one typical exchange from May 2017, a Nudge employee emailed 

Defendant Gantz about a Coaching Program he intended to try to sell to a Seed 

customer. In the email, the Nudge employee wrote “we are going to discuss an 

investment w/[consumer] this evening after hours[.] [T]he most it would be is 

$29,690. Could we get a breakdown of what cards to use before you guys leave 

this eve? Please don’t contact the client about the investment as we have not 

discussed it with them yet, thanks.” Gantz forwarded this email to a Seed 

employee and instructed her to provide the information. The Seed representative, 

in turn, emailed the Nudge salesperson a breakdown of how to charge $29,700 on 

the consumer’s cards: “Chase AARP-15k;” “BOA-4.2k;” and “Discover-10.5k.” 

85. Communications like this – in which Seed provides its customers’ 

private credit information to the Training Companies to enable them to pitch 

additional trainings or coaching services to the customers – are commonplace for 

Defendants. 

G. Seed’s Funding Service Impairs Many Consumers’ Credit Scores 

86. Seed’s funding service causes substantial and long-lasting declines in 

many of its customers’ credit scores. Defendants do not tell their customers about 

the likely credit score impact of its service, instead falsely suggesting that 

consumers’ credit scores will significantly improve by the end of Seed’s process. 

87. A consumer’s credit utilization rate is the ratio of the consumer’s 

revolving credit balances to his or her revolving credit limits. Credit utilization 

rates are one of the primary factors in calculating credit scores. In many instances, 

within mere days of Seed obtaining new credit cards for its customers, the Training 

Companies charge tens of thousands of dollars to the cards for the cost of their 

training programs. This causes a substantial portion of the credit lines to be 

immediately exhausted by the cost of these trainings. The substantial charges on 

these new credit cards cause the consumers’ credit utilization rates to spike, 

leading their credit scores to significantly decline. 

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88. The negative impact on Seed’s customers’ credit scores is exacerbated 

by the fact that most consumers who pay for the Training Companies’ trainings 

and coaching services do not earn substantial additional income through the 

programs. Even though Seed advises many of its customers to project $100,000 or 

more of additional income following the programs, the great majority of 

consumers do not even recoup what they paid to the Training Companies. 

Accordingly, many of Seed’s customers are unable to timely pay down the large 

credit card debts associated with the cost of the programs. 

89. For these reasons, many of Seed’s customers experience substantial 

and sustained drops in their credit scores from the funding process. In many cases, 

Seed’s customers experience long-term credit score declines of more than 100 

points that, in some cases, last years. 

90. Seed does not disclose to consumers before they enroll that many 

customers experience a significant, long-term negative impact on their credit 

scores as a result of the Seed process. To the contrary, Seed’s website falsely 

suggests that the only risk from Seed’s funding process is “minimal” and shortterm: 

Is there any risk or negative impact on me or my 

company? 

There is no risk to you or your company other than the owner will receive 

inquiries on their personal credit report and those can have a minimal negative 

impact on the personal credit score for up to 6 months. 

91. After enrollment, Seed’s representatives continue to downplay the 

negative credit score impacts from the Seed funding process. For example, in a 

standard form email to Seed’s customers on “Utilization’s Effect on Credit,” 

Seed’s representatives indicate that in the “short term (0-6 months),” the 

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consumers will experience “temporary stress on your credit score.” However, in 

the “long term (1 year and beyond)”: 

Once your overall balances are brought below the 50% utilization 

mark and you have now demonstrated a year of timely payments on 

all your new accounts; you can expect a PROFOUND increase to your 

credit score. You have proven to the banks you are able to effectively 

manage a large amount of credit and are now a rock star in any 

lending institution’s eyes! At this stage, we routinely see our clients’ 

credit scores increase dramatically; anywhere from 50-100 points 

compared to when they first entered our program. As a credit rock 

star you can expect to be granted credit (of any kind) at the very best 

terms. 

92. Seed’s statements misleadingly minimize the negative credit score 

impact from its services and convey the false impression that most consumers can 

expect to experience an improved credit score. In actuality, many of Seed’s 

customers experience substantial, lasting credit score declines as a function of 

loading up their credit cards with the cost of the trainings and their subsequent 

inability to timely pay down these debts. 

93. Based on the facts and violations of law alleged in this Complaint, the 

FTC has reason to believe that Defendants are violating or are about to violate laws 

enforced by the Commission because, among other things: Defendants engaged in 

their unlawful acts and practices repeatedly over a period of at least six years; 

Defendants continued to enable the acts and practices of the Training Companies 

despite knowledge that many of them were the subject of law enforcement actions 

predicated on their illegal conduct; and Defendants continued to engage in the 

conduct at issue in this Complaint after the Defendants learned that the FTC was 

investigating them. 

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VIOLATIONS OF THE FTC ACT 

94. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or 

deceptive acts or practices in or affecting commerce.” 

95. Misrepresentations or deceptive omissions of material fact constitute 

deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 

96. Acts or practices are unfair under Section 5 of the FTC Act if they 

cause or are likely to cause substantial injury to consumers that consumers cannot 

reasonably avoid themselves and that is not outweighed by countervailing benefits 

to consumers or competition. 15 U.S.C. § 45(n). 

COUNT I 

Deceptive Income Claims 

97. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of their credit card funding services, 

Defendants have represented, directly or indirectly, expressly or by implication, 

that consumers who purchase and use the products and services of the Training 

Companies are likely to earn substantial income and may include such substantial 

projected income in applications submitted to credit issuers. 

98. In truth and in fact, in numerous instances in which Defendants have 

made the representations set forth in Paragraph 97, consumers who purchase and 

use the products and services of the Training Companies are not likely to earn 

substantial income and may not include such substantial projected income in 

applications submitted to credit issuers. 

99. Therefore, Defendants’ representations as set forth in Paragraph 97 

are false or misleading and constitute deceptive acts or practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

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COUNT II 

Deceptive Coordination with Training Companies 

100. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of its credit card funding services, Defendants 

have represented, directly or indirectly, expressly or by implication, that 

Defendants (a) will act in the consumers’ interest and for their benefit; and (b) will 

not disclose the consumers’ personal information to third parties without the 

consumers’ written authorization. 

101. In truth and in fact, in numerous instances in which Defendants have 

made the representations set forth in Paragraph 100, Defendants have (a) not acted 

in the interests or for the benefit of consumers, but instead have acted for the 

benefit of the Training Companies; and (b) disclosed consumers’ personal financial 

information to the Training Companies without the consumers’ prior authorization. 

102. Therefore, Defendants’ representations as set forth in Paragraph 100 

are false or misleading and constitute deceptive acts or practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT III 

Deceptive Credit Score Claims 

103. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of their credit card funding services, 

Defendants have represented, directly or indirectly, expressly or by implication, 

that the only negative impact on consumers’ credit scores related to Defendants’ 

services will be minor and short-term. 

104. In truth and in fact, in numerous instances in which Defendants have 

made the representations set forth in Paragraph 103, consumers suffered substantial 

and long-term negative impacts related to Defendants’ services. 

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105. Therefore, Defendants’ representations as set forth in Paragraph 103 

are false or misleading and constitute deceptive acts or practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT IV 

Unfair Credit Card Funding Practices 

106. In numerous instances, Defendants have obtained credit cards for 

consumers for the purpose of enabling Training Companies engaged in deceptive 

practices to place charges on some or all of those cards, including by: 

a. Obtaining credit cards for consumers that are used to pay for the 

Training Companies’ fraudulent programs while allowing the 

Training Companies to market Defendants’ services as a way for 

consumers to obtain capital to invest in their businesses; 

b. Undermining the underwriting processes of credit issuers so that 

consumers obtain more credit than they would otherwise obtain, 

including by causing credit card applications to be submitted on 

behalf of consumers containing inflated income figures; or 

c. Disclosing consumers’ private financial information to the 

Training Companies without the consumers’ knowledge or consent 

in order to enable the Training Companies to sell additional 

training and coaching services to consumers. 

107. Defendants’ actions cause or are likely to cause substantial injury to 

consumers that consumers cannot reasonably avoid themselves and that is not 

outweighed by countervailing benefits to consumers or competition. 

108. Therefore, Defendants’ acts or practices as set forth in Paragraph 106 

constitute unfair acts or practices in violation of Section 5 of the FTC Act, 15 

U.S.C. § 45(a), (n). 

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VIOLATIONS OF THE TELEMARKETING SALES RULE 

109. Congress directed the FTC to prescribe rules prohibiting abusive and 

deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15 

U.S.C. §§ 61016108, in 1994. The FTC adopted the original TSR in 1995, 

extensively amended it in 2003, and amended certain sections thereafter. 16 

C.F.R. Part 310. 

110. Some of the Training Companies, including Nudge and Zurixx, are 

“sellers” and “telemarketers” engaged in “telemarketing,” as defined by the TSR, 

16 C.F.R. § 310.2(aa), (cc), and (dd). 

111. The TSR prohibits sellers and telemarketers from misrepresenting, 

directly or by implication, any material aspect of the performance, efficacy, nature, 

or central characteristics of goods or services that are the subject of a sales offer. 

16 C.F.R. § 310.3(a)(2)(iii). 

112. The TSR also prohibits a person from providing substantial assistance 

or support to any seller or telemarketer when that person “knows or consciously 

avoids knowing” that the seller or telemarketer is engaged in acts or practices that 

violate Section 310.3(a). 16 C.F.R. § 310.3(b). 

113. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. 

§ 6102(c) and Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation 

of the TSR constitutes an unfair or deceptive act or practice in or affecting 

commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT V 

Assisting and Facilitating Deceptive Telemarketing Acts 

114. In numerous instances, Defendants provided substantial assistance or 

support to Training Companies when Defendants knew, or consciously avoided 

knowing, that the Training Companies were engaged in acts or practices that 

violate Sections 310.3(a)(2) of the TSR, as described in Paragraphs 1 through 93 

above. 

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115. Therefore, Defendants’ acts or practices as set forth in Paragraph 114 

violate the TSR, 16 C.F.R. § 310.3(b). 

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT 

116. CROA took effect on April 1, 1997, and has since that date remained 

in full force and effect. 

117. The purposes of CROA, according to Congress, are “(1) to ensure that 

prospective buyers of the services of credit repair organizations are provided with 

the information necessary to make an informed decision regarding the purchase of 

such services; and (2) to protect the public from unfair or deceptive advertising and 

business practices by credit repair organizations.” 15 U.S.C. § 1679(b). 

118. CROA defines a “credit repair organization” as “any person who uses 

any instrumentality of interstate commerce or the mails to sell, provide, or perform 

(or represent that such person can or will sell, provide, or perform) any service, in 

return for the payment of money or other valuable consideration, for the express or 

implied purpose of – (i) improving any consumer’s credit record, credit history, or 

credit rating; or (ii) providing advice or assistance to any consumer with regard to 

any activity or service described in clause (i).” 15 U.S.C. § 1679a(3). 

119. Seed is a “credit repair organization.” 

120. CROA prohibits all persons from “mak[ing] any statement, or 

counsel[ing] or advis[ing] any consumer to make any statement, which is untrue or 

misleading (or which, upon the exercise of reasonable care, should be known by 

the credit repair organization, officer, employee, agent, or other person to be untrue 

or misleading) with respect to any consumer’s credit worthiness, credit standing, or 

credit capacity” to (A) any consumer reporting agency; or (B) any person who has 

extended credit to the consumer or to whom the consumer has applied or is 

applying for an extension of credit. 15 U.S.C. § 1679b(a)(1). 

121. Pursuant to Section 410(b)(1) of CROA, 15 U.S.C. § 1679h(b)(1), any 

violation of any requirement or prohibition of CROA constitutes an unfair or 

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deceptive act or practice in commerce in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). Pursuant to Section 410(b)(2) of CROA, 15 U.S.C. 

§ 1679h(b)(2), all functions and powers of the FTC under the FTC Act are 

available to the FTC to enforce compliance with CROA in the same manner as if 

the violation had been a violation of any FTC trade regulation rule. 

COUNT VI 

Causing False Statements to Credit Issuers 

122. In numerous instances, in connection with the advertising, marketing, 

promotion, offering for sale, or sale of services to consumers by a credit repair 

organization, as that term is defined in Section 403(3) of CROA, 15 U.S.C. 

§ 1679a(3), Defendants have made, or counseled or advised consumers to make, 

statements which are untrue or misleading with respect to consumers’ credit 

worthiness, credit standing, or credit capacity to persons who have extended credit 

to the consumers or to whom the consumers have applied or are applying for an 

extension of credit, including by causing credit applications to be submitted on 

behalf of consumers containing untrue or misleading information about consumers’ 

incomes. 

123. Therefore, Defendants’ acts or practices as set forth in Paragraph 122 

violate Section 404(a)(1) of CROA, 15 U.S.C. § 1679b(a)(l). 

VIOLATIONS OF THE CONSUMER REVIEW FAIRNESS ACT OF 2016 

124. In 2016, Congress passed the CRFA, P.L. 114-258, 15 U.S.C. § 45b. 

125. “CRFA” defines “covered communication” as “a written, oral, or 

pictorial review, performance assessment of, or other similar analysis of, including 

by electronic means, the goods, services, or conduct of a person by an individual 

who is party to a form contract with respect to which such person is also a party.” 

15 U.S.C. § 45b(a)(2). 

126. The CRFA defines “form contract” to mean “a contract with 

standardized terms (i) used by a person in the course of selling or leasing the 

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person’s goods or services; and (ii) imposed on an individual without a meaningful 

opportunity for such individual to negotiate the standardized terms.” 15 U.S.C. 

§ 45b(a)(3). 

127. Effective March 14, 2017, the CRFA renders void any provision of a 

form contract if such provision prohibits or restricts the ability of an individual 

who is a party to the form contract to engage in a covered communication. 15 

U.S.C. § 45b(b)(l). 

128. Effective March 14, 2017, the CRFA prohibits any person from 

offering a form contract containing a provision described as void in sub-section (b) 

of the CRFA. 15 U.S.C. § 45b(c). 

129. Pursuant to the CRFA, a violation of sub-section (c) of the CRFA 

shall be treated as a violation of a rule defining an unfair or deceptive act or 

practice prescribed under Section 18(a)(1)(B) of the FTC Act, 15 U.S.C. 

§ 57a(a)(l)(b), and the FTC shall enforce the CRFA in the same manner, by the 

same means, and with the same jurisdiction, powers, and duties as the FTC Act. 15 

U.S.C. § 45b(d). Congress empowered the FTC to enforce the CRFA with respect 

to contracts in effect on or after December 14, 2017. 15 U.S.C. § 45b(e). 

130. Defendants have offered “form contract[s],” as that term is defined in 

the CRFA. 15 U.S.C. § 45b(a)(3). 

COUNT VII 

Unlawful Use of Non-Disparagement Provisions 

131. In numerous instances on or after December 14, 2017, Defendants 

have offered form contracts containing provisions that prohibit or restrict the 

ability of an individual who is a party to the form contract to engage in a covered 

communication. 

132. Defendants have thereby violated the CRFA, 15 U.S.C. § 45b(c). 

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CONSUMER INJURY 

133. Consumers have suffered and will continue to suffer substantial injury 

as a result of Defendants’ violations of the FTC Act, the TSR, CROA, and the 

CRFA. In addition, Defendants have been unjustly enriched as a result of their 

unlawful acts or practices. Absent injunctive relief by this Court, Defendants are 

likely to continue to injure consumers, reap unjust enrichment, and harm the public 

interest. 

THIS COURT’S POWER TO GRANT RELIEF 

134. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court 

to grant injunctive and such other relief as the Court may deem appropriate to halt 

and redress violations of any provision of law enforced by the FTC. The Court, in 

the exercise of its equitable jurisdiction, may award ancillary relief, including 

rescission or reformation of contracts, restitution, the refund of monies paid, and 

the disgorgement of ill-gotten monies, to prevent and remedy any violation of any 

provision of law enforced by the FTC. 

135. Section 19 of the FTC Act, 15 U.S.C. § 57b, Section 6(b) of the 

Telemarketing Act, 15 U.S.C. § 6105(b), Section 410(b) of CROA, 15 U.S.C. 

§ 1679h(b), and the CRFA, 15 U.S.C. § 45b(d), authorize this Court to grant such 

relief as the Court finds necessary to redress injury to consumers resulting from 

Defendants’ violations of the TSR, CROA, and the CRFA, including the rescission 

or reformation of contracts and the refund of money. 

PRAYER FOR RELIEF 

136. Wherefore, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the 

FTC Act, 15 U.S.C. §§ 53(b) and 57b, Section 6(b) of the Telemarketing Act, 15 

U.S.C. § 6105(b), Section 410(b) of CROA, 15 U.S.C. § 1679h(b), the CRFA, 15 

U.S.C. § 45b(d), and the Court’s own equitable powers, requests that the Court: 

A. Enter a permanent injunction to prevent future violations of the FTC 

Act, the TSR, CROA, and the CRFA by Defendants; 

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C. Award Plaintiff the costs of bringing this action, as well as such other 

and additional relief as the Court may determine to be just and proper. 

Respectfully submitted, 

JAMES REILLY DOLAN 

Acting General Counsel 

Dated: January 29, 2021 

CHRIS . -i l. ILLER 

Federal Trade Commission 

One Bowling Green, Suite 318 

New York, NY 10004 

(212) 607-2829 (212) 607-2822 (Fax) 

b lasky@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

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