XPost: alt.politics.democrats, oc.general, sac.politics
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For Doug Stephens, the free event seemed like a good way to
learn how to flip homes. An online ad for the December gathering
sported pictures of Tarek and Christina El Moussa, the Orange
County stars of HGTV’s “Flip or Flop” who buy rundown homes,
renovate them and try to sell them for a profit. Stephens
watched “Flip or Flop” regularly, along with 2.8 million other
Americans, so he went.

The El Moussas, Yorba Linda residents, did not show up.

In a prerecorded video, the couple told attendees that they were
busy working and filming their show. Undeterred, Stephens paid
$1,997 for three days of classes and $1,000 for real estate
software. But the classes turned into a sales pitch to buy
additional courses that cost thousands more, said Stephens, a
pastor and teacher from Havana, Fla.

“They weren’t really teaching at all,” he said.

THE COMPLAINTS

The El Moussas, like many reality TV stars before them, are
capitalizing on their fame by offering pricey classes. At free
events in hotel ballrooms, instructors tell attendees that if
they pay to enroll in three-day courses, they’ll learn how the
couple flips homes and also gain access to investors who will
give them cash to buy properties, even if they have low credit
scores or a weak job history. They’ll earn back their money
quickly, the instructors say, and will get refunds if they don’t
flip a home within a certain amount of time.

But about a dozen people interviewed by The Associated Press
said those promises did not pan out. Although class leaders
offered some instruction, a lot of time was spent pushing them
to buy more classes, they said; some complained that getting
refunds for the sessions was difficult.

Stephens said his instructor avoided answering questions, told
attendees not to speak to each other and spent a lot of time
hyping the program. The homework on the first day was for
attendees to call their credit card companies and increase their
credit limits, he said. On the last day, Stephens said, the
instructor pushed them to buy training sessions, some of which
cost around $26,000.

The classes featuring the El Moussas are run by Zurixx LLC, an
education company based in Utah. Zurixx has partnered with other
reality TV stars to create education programs under different
names, some of which also have been the subject of complaints
from students. A section of Zurixx’s website that listed its
programs and the reality stars it works with disappeared as the
AP reported this story. The company said it is continually
updating its website.

THE COMPANY BEHIND THE CLASSES

Last year, Zurixx brought in $130.1 million in total revenue,
the company told Inc. magazine. The El Moussas’ program, Success
Path Education, is Zurixx’s most popular and the couple receives
a percentage of the Success Path classes sold, the company said.

The El Moussas are a big draw, with “Flip or Flop” ranked as
HGTV’s second-most watched show. And home flipping is hot off
TV, too: The number of flips, considered a property sold twice
within 12 months, rose this year to the highest point in six
years, according to RealtyTrac.com.

Roger Behle, the El Moussas’ attorney, said the couple did not
have time to be interviewed for this story.

The U.S. Federal Trade Commission, which aims to protect
consumers against unfair or deceptive business practices, has
received 50 complaints about classes connected to Zurixx since
2013, according to documents reviewed by the AP. And in May, the
Better Business Bureau office of St. Louis warned people about
Success Path events in the city, citing the more than 150
complaints it received about classes related to the company.

Zurixx said the complaints represent a tiny percentage of the
more than 370,000 people who have attended its events and the
75,000 who have paid for its products. The company said that
nearly all its students have filled out positive evaluations
about the classes and the company provided copies of more than
2,300 of those evaluations. It also said that it does not
mislead people or push attendees to buy additional classes.

Zurixx also provided contact information for 13 people,
including Billy Batson of North Port, Florida, who said he has
flipped 17 properties since he paid $25,000 for a mentor and one
of Zurixx’s classes two years ago. Batson said he probably could
have been successful without the training, but that the process
would have taken longer. Batson said Zurixx paid for a trip to
Las Vegas for him and a girlfriend so he could talk to students.

“It’s been a really great life-changing experience,” he said.

HORROR STORIES

Patricia Briggs paid $1,798 earlier this year for a three-day
Success Path class, hoping it could change her life, too.

The day after she finished the classes, Briggs found three
properties to try to flip near her home in Roseburg, Ore. She
said she called Success Path several times to help her connect
with the promised investors, but that no one ever picked up the
phone. (The company said it had no record of the calls.) A few
weeks later, Briggs said she received calls from Success Path
representatives who told her that they could put together a team
from the El Moussas to help her, but only if she paid another
$8,000. She said no and asked for a refund of her $1,798. She
was offered half and she took it, she said, but still wants the
balance back.

When she sees the El Moussas on TV now, Briggs said, “I want to
go through my screen and shake the both of them.”

Carol Lepine, who went to a Bonita Springs, Fla., event last
year, said she was shocked when she learned the El Moussas would
not appear and left without buying any classes.

“It’s a definite bait and switch,” she said.

Zurixx said its mailed invites do not state that the stars will
be there, and that the El Moussas can’t go to every class but
show up when they can.

OTHER LAWSUITS

This summer, Zurixx held dozens of free Success Path events
across the U.S., Canada and Puerto Rico as HGTV aired the fifth
season of “Flip or Flop” and a spinoff, “Flip or Flop: Selling
Summer.” More free seminars are scheduled in November, including
in New York, Minneapolis and San Jose. HGTV spokeswoman Audrey
Adlam said in a statement that the network and its parent
company, Scripps Networks Interactive Inc., are not associated
with Success Path and other classes. She declined to answer
specific questions, including how many complaints the network
has received about the classes.

Other reality TV stars have had trouble with their real estate
classes, most notably Republican presidential nominee Donald
Trump, who starred on NBC’s “The Apprentice.” Trump was sued
over his Trump University both by students and New York’s
attorney general, who contended the real estate classes were
merely a vehicle to sell more training that cost as much as
$35,000. Eric Schneiderman, the attorney general, called the
university a “straight up fraud.” Trump has said he will prevail
in the lawsuits.

Another former reality star, Armando Montelongo of A&E’s “Flip
This House,” was sued in February by more than 160 people who
said his company’s $1,500 home-flipping classes were “ruses” to
sell more training that cost as much as $54,000. The case, which
was filed in a California court, was voluntarily dismissed by
the students in September after the jurisdiction was contested.
It will be refiled in Texas where Montelongo lives, according to
court documents. In a statement, Armando Montelongo Companies
said the lawsuit was “frivolous.”

Anyone who purchases classes from Success Path must sign a
receipt with an arbitration clause on the back noting that any
dispute with Zurixx must be lodged in Salt Lake City and “be
conducted on a confidential basis.” Complainants seeking less
than $10,000 can make a claim in small claims court, according
to the document. Those interviewed by the AP said they did not
realize they were ceding their rights to sue by signing the
receipt.

The company said it favors arbitration because it is a cheaper
and a faster way for customers to resolve disputes.

Two of Zurixx’s owners have run into trouble with Utah
regulators in the past. Premier Mentoring Inc., which was owned
by Zurixx co-owners Jeff Spangler and Cris Cannon, was accused
in 2008, 2009 and 2014 of deceptively selling training programs
over the phone, according to documents from the Utah Division of
Consumer Protection. The first two cases were dismissed after
the company reached an agreement with customers; in the 2014
case, the company settled by paying a fine. Spangler and Cannon
told the regulator that Premiere Mentoring stopped telemarketing
operations in 2013.

Customers who took some of Zurixx’s other classes had complaints
that echoed criticisms of the El Moussas’ offerings.

MORE HORROR STORIES

Gloria Pettis, a budget analyst from San Diego, paid $1,500 for
a three-day small business class that featured Daymond John, a
star of ABC’s “Shark Tank.” She said she paid for Daymond John’s
Launch Academy because speakers at a free event in January said
they could help her create a prototype for a wearable tracking
device for children that she wanted to make and sell.

During the entire three days, Pettis said no instructor ever
asked her about the product she wanted to make. But employees
suddenly became interested, she said, after she told them she
opened a new credit card with a $30,000 limit, an assignment the
class was given on the first day. Workers pulled her out of
class six times, she said, pushing her to buy more training in
Las Vegas for $27,000. She did not.

Zurixx said it asks students to increase their credit limits and
open new cards to have access to funds for unexpected business
costs, but Pettis said it was made clear to her that the new
card was to be used to pay for the Las Vegas classes. Zach
Rosenfield, a spokesman for John, said the “Shark Tank” star was
unavailable for an interview. An ABC representative did not
respond to requests for comment.

Susan Martin went to a free Zurixx event featuring reality TV
stars Andy and Candis Meredith of “Old Home Love,” a show that
aired on HGTV and its sister channel the DIY Network. She
ditched day two of her $1,997 three-day class, she said, because
she was told to raise her credit limit and buy $23,000 in
additional education. Brian Samuels, a manager for the
Merediths, said the couple did not have time to be interviewed
because of their shooting schedule.

Martin, a retired bookkeeper from Chico, received a refund after
she wrote a negative review on the Better Business Bureau
website.

Two months later, she received an invite to another free event
that featured a picture of the El Moussas on the front, under
the sentence: “Do you have the courage to retire rich?”

“These people are so stupid that they actually invited me again
after I complained,” Martin said. “Or they thought I was dumb
enough to fall for it again.”

http://www.ocregister.com/articles/classes-733381-zurixx-
company.html

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