WWEJSS: How does a fake recruiting firm get a credit card merchant account?

WWEJSS, LLC — a.k.a. SevenFigureCareers — is a “recruiting” company that does not legally exist, yet major credit card companies have authorized merchant accounts that it uses to fraudulently collect fees for services it never delivers, while it silences its victims with a confidentiality agreement that’s fake, too.

WWEJSSA credit card scam

In a series of recent articles, readers shared their experiences with phony recruiters at SevenFigureCareers (a.k.a. 7F, 7figcareers, and loads of other names) who scammed job seekers out of loads of money:

But, how does a racket like SevenFigureCareers get a merchant account to collect fees via American Express, MasterCard and VISA — then win disputes when victims complain about being scammed?

By getting victims to sign a contract.

To defend against claims of fraudulent credit card charges, 7F tells credit card companies that its “customer” signed a contract and that 7F delivered what it promised under the contract — hence, no refund is due.

One victim, John Rice (not his real name), told me that AmEx said it was a contractual problem between him and 7F because 7F reported it had fulfilled its obligations. AmEx suggested he hire a lawyer after AmEx rejected four requests for a refund.

After reports detailing the scam appeared on this website, AmEx eventually refunded Rice and other cardholders thousands in fees collected by 7F, and cancelled 7F’s merchant account. But it seems that AmEx issued that merchant account without confirming whether 7F is a legal entity. AmEx declined to explain exactly how it vets merchants before signing them up. AmEx also won’t disclose what problems it found with 7F after a phony lawyer threatened a user of this website who spoke up about getting scammed.

The SevenFigureCareers contract is a fraud

Two real lawyers reviewed the 7F contract for Ask The Headhunter. One of them explained the problem:

“A contract is between two parties. If there are not two parties, then there is no contract. This contract is invalid because there’s only one party — the victim.”

When high-salary executives don’t recognize that an agreement they’re signing is invalid, then everyone needs to learn the basics.

Read the contract

Let’s start with the SevenFigureCareers contract. Several victims provided me with copies. Each seems to be coded with an ID at the upper left, to identify the victim. I’ve redacted that.

Here’s why the contract is a fraud, and why AmEx — and MasterCard and VISA — should never have issued merchant accounts to SevenFigureCareers.

7f-contract-1

Although it calls itself by many names, SevenFigureCareers does business under a name its victims don’t see until they receive a contract: WWEJSS, LLC. But this “Texas corporation” does not exist. Thus, there is no contract.

Did credit card companies get scammed, too?

So, how does a fake company collect payments through real credit card accounts? Why would credit card companies with anti-fraud departments authorize merchant accounts for crooks? Good questions, for which we have no answers. And that means you should never assume that paying with a credit card protects you from fraudulent vendors.

Did these credit card companies get scammed, too? How? Will they ever admit it?

Tip: If you have concerns about a company you’re about to contract with, investigate the entity. If SevenFigureCareers’s victims had done due diligence, they’d never have gotten suckered. They never would have paid — even with a credit card. John Rice, a seasoned executive, has said to me several times, “I was such a dumb shit.” Yes, he knew better — but he suspended his concerns because he figured American Express would protect him from losses. American Express, however, apparently didn’t take reasonable precautions to protect Rice from this phony merchant.

Caveat emptor really does mean that due diligence is always your responsibility.

WWEJSS, LLC is a fraud

American Express credit card charges from SevenFigureCareers appear as WWEJSS, LLC or WWJESS, LLC on victims’ statements.

After doing some basic research, one victim learned the company is not licensed in Texas and confronted 7F recruiter “Tony French.” French replied in an e-mail that SevenFigureCareers doesn’t have to be licensed, but that it is registered in Texas under “WWEJSS, LLC.”

7f-e-mail-1

On September 29, I contacted the office of the Texas Secretary of State. Victoria, a helpful employee, told me that, “If it’s a legal entity, like a Texas corporation or LLC or limited partnership, it has to be registered with the State, even if it only does e-commerce.”

She then looked up WWEJSS, LLC and WWJESS, LLC, “a Texas corporation,” in the Texas registry.

“There is no WWEJSS or WWJESS registered,” Victoria reported.

That makes Tony French a liar and his “company” illegal.

7f-whitetailsHunting… scammers, or deer?

Nor is there a registration for SevenFigureCareers, Seven Figure Careers, 7Figures, or any other such name. (In 1993, “Seven Figure, Inc.” was registered to Carl Poston, but that expired in 1996.)

There is, however, a registration for 7F, Inc. — to Gary Benbow in Yoakum, Texas. I spoke with Gary, who runs the respected 7F Whitetails Ranch. The 7F comes from an old cattle brand that’s been in his family for generations. He’s never heard of SevenFigureCareers. Gary’s not in the recruiting business. His family raises cattle and offers trophy deer hunting on the property. And he’s not happy about scammers tarnishing his registered brand.

Targeting the credit card companies

American Express and other credit card companies have permitted an unregistered legal entity to collect payments with their credit cards even after the victims gave notice that this merchant is a fraud. Apparently, AmEx failed to do the simplest due diligence. (When I asked, AmEx would not disclose exactly how it vets its merchants.) Then AmEx rejected requests for refunds out of hand, relying on what we now know is an invalid contract used by a fake company operating illegally in Texas.

These credit card companies have put a target on their own backs that says “Fraud.” I didn’t ask Gary Benbow whether he takes credit cards. But I’m sure he’d love to find the guys who call themselves 7F.

As of the date of this column, Texas Company Search lists no registrations for any of the SevenFigureCareers legal entities — least of all WWEJSS, LLC, the name listed on its contracts.

WWEJSS: How it silences its victims

It seems clear that WWEJSS has flourished because it keeps its victims quiet.

After John Rice’s credit card dispute was rejected, he posted about the scam on this website. Within minutes, SevenFigures silenced Rice with an e-mail. A phony lawyer “representing” SevenFigures threatened him with a contractual penalty of $25,000 if he didn’t remove what he posted. It was actually that threat that publicly unraveled the entire SevenFigureCareers scam.

What scared Rice and other victims into silence is an intimidating non-disclosure clause (or NDA, or Non-Disclosure Agreement) in the contract — “Mutual Confidentiality Regarding ENTIRE AGREEMENT and your Search.”

The NDA threat

We’ll forget for a minute that the entire contract is invalid because WWEJSS doesn’t exist. Let’s take a look at what these people agreed to — and at what a lawyer says about it.

7f-contract-2

This clause essentially says that the signer can’t reveal anything about their experience with 7F, or comment about it anywhere to anyone. Victims I interviewed were convinced that, even if they knew they’d been scammed, they’d have to pay 7F $25,000 if they told anyone.

But, this section of the contract by itself wouldn’t stand up in court, say two attorneys who reviewed it. That is, it seems there is no danger to SevenFigures’ victims if they tell all to the world. (Note: The opinions of the lawyers I spoke with are not legal advice. If you have a specific contractual controversy, you need to get advice from a lawyer about your specific problem.)

Phony Lawyering: liquidated damages & penalties

It’s worth understanding a legal concept that’s key to many contracts. The idea is pretty simple. If we bind ourselves with a contract, and I do something that violates our contract, I will cause you damage, and I must reimburse you for that damage.

But, how much could the damages be worth? The law acknowledges this can be hard to calculate. Here’s how one lawyer explains it:

In situations where it’s not practical or maybe possible to come up with an actual number, in a contract parties can “pre-decide” what the damages will be (called liquidated damages), but there has to be a reasonable relation to the actual harm caused. It can’t just be some outlandish number like a bazillion dollars because then that would be more like a “penalty” and less like compensation for actual damages received.

If a court (judge) feels like the amount pre-decided (the liquidated damages) is actually a penalty then they may decide to throw out that figure. That is why lawyers go to great lengths when using a liquidated damages clause to make it seem as far from a penalty as possible, starting with not calling it a penalty!

7f-contract-3In this lawyer’s opinion, the fact that the contract calls the payment a “penalty” would probably invalidate any damages claim. What this — along with the other sloppy wording and writing in this “contract” — tells us is that a lawyer didn’t write it.

My guess is it was written by the same putz who impersonated a lawyer — illegal in all 50 states — in the e-mail threatening John Rice.

This is how 7F silences its victims, using an unenforceable confidentiality agreement in a fraudulent contract to intimidate them into keeping their mouths shut. They naturally worry that speaking up would cost them $25,000 for violating confidentiality. But liquidated damages normally can’t be a penalty — only compensation for damage.

Go suck rocks.

All that Tony French’s victims have to do is tell him to go suck rocks when he threatens them. And that’s why we’re having this brief legal lesson, courtesy of two friendly lawyers who hate scammers.

(We won’t get into it here, but SevenFigureCareers violated its own NDA when Tony French shared confidential communications from his private equity “clients” with the candidates he was supposedly recruiting. Except those PE clients don’t exist — so where’s the harm?)

Who should sue whom?

Well, it seems Mr. French might be doing more than sucking on rocks soon.

I asked Lawrence Barty, a retired attorney who has specialized in employment and labor law, for his views on this case. He suggests the SevenFigureCareers victims may have grounds to sue whoever is behind this phony recruiting firm. Even though SevenFigureCareers doesn’t legally exist, someone convinced the victims that the firm does exist and that the contract is real. And that person faces trouble.

The persuasion of this “person” led you into a situation in which you lost money. If you have a legal claim, it can’t be against an entity that doesn’t exist — right? So who can you sue?

If you can identify the person who perpetrated this fraud, a tort claim of fraudulent inducement might be possible (as always, State laws vary) against that person — not against the illusory 7F. You were induced by X (identity presently unknown) to enter into a contract that cost you money, but was known in advance by X to be worthless. So, you should sue X, the person who tricked you into entering that contract. A claim of that type can be a tort claim, possibly giving rise to compensatory and punitive damages.

Ah. Now we get to penalties. Not just compensatory damages, but punitive damages. Except now the penalty is against the scammer.

This is tricky stuff — maybe more than your readers need to know. The threshold issue is to identify and locate who is behind 7F. You can’t sue someone whom you can’t identify. And, because he is a crook by any definition, he therefore is likely to be a very, very elusive target.

Yah — like a deer on Gary Benbow’s ranch.

What’s next?

Since this series about SevenFigureCareers.com was published, the “firm’s” website has gone dark. Many of the associated phony websites of phony private equity and venture capital firms have disappeared. But SevenFigureCareers continues to operate and collect fees, with a web presence on Manta, a business web-hosting service. It’s newest customers have been in touch with Ask The Headhunter — after they lost their money.

Where is the crook? Has American Express found him?

How does someone running a fake company get merchant accounts with American Express, VISA and MasterCard? What basic controls against fraud do these credit card companies have in place? I mean — how hard is it to look up a corporation’s or LLC’s credentials? A dog with a note in its mouth can do it.

In the next edition, we’ll go down to the bottom of this wormhole: Who’s behind the SevenFigureCareers recruiting scam?

Are you one of the victims scammed by SevenFigureCareers? Or did you see the scam coming and walk the other way? How would you avoid getting fleeced by a “career service?” What due diligence do you do?

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American Express fires recruiting scam merchant “7F”

After realizing they’d been ripped off for thousands of dollars by phony recruiters when they used their American Express cards to pay for “services,” Cate Bruner and John Rice (not their real names) found an active discussion about SevenFigureCareers (a.k.a. 7F) on this website.

Rice learned the 7F lawyer who had threatened him into silence was bogus. Bruner learned the private equity partners she had interviewed with were frauds.

Other readers who had been solicited and scammed by 7F recruiters shared their experiences, as well as documents, phone numbers, voice mails and e-mails they’d saved. Crowd-sourced evidence was quickly gathered in the community and late last week American Express fired the recruiting scam merchant — SevenFigureCareers.

“We did our own research based on some of the things you highlighted,” said American Express spokesperson Ashley Tufts. “We have cancelled the merchant.”


UPDATE : Sometime today, Oct. 12, 2016, the SevenFigureCareers.com website went dark.
Readers have reported the firm is doing business on Facebook and at Manta:
https://www.facebook.com/ArthurFrench.SevenFiguresCareerS/
http://www.manta.com/c/mx6hngr/sevenfigurecareers


American Express fires SevenFigureCareers

When I contacted American Express, the credit card company immediately put its fraud team on the matter. Within a matter of days, it took action.

“We always want to do what’s best for our card members,” Tufts told me, “and one of our policies is that if it’s a fraudulent charge our card members aren’t liable for that.”

She could not comment on exactly what AmEx found when it researched SevenFigureCareers, but said, “We did determine that we wanted to cancel the relationship. They will no longer be able to accept American Express cards. They’re no longer a merchant.”

What to do if you got scammed by 7F

7F uses so many business names that I gave up trying to track them all down. Most are permutations and abbreviations of Seven, 7, figure, and careers. The scam usually starts with an e-mail from Tony French or Art French. For more details, see 7F: Anatomy of A Recruiting Scam.

“If a Card Member has questions about their purchases with this merchant, they should call the number on the back of their Card,” advised Tufts.

So how did 7F slip by?

amex-partner7F victim John Rice said he put aside his misgivings about signing a contract with 7F when he saw the big American Express Partner logo on 7F’s website: “It gave me the confidence to do business with them, because I figured I could get my money back if anything went wrong.” And boy, did it go wrong.

“They promised interviews for six- and seven-figure jobs,” said Rice, “but delivered short phone calls with illiterate phonies.”

Rice filed disputes with AmEx, but didn’t get anywhere. “They said, ‘I’m sorry,’ and I was out $2,500, but I learned a lesson.”

But it seems credit card fraud — whether it’s AmEx, VISA or MasterCard — usually pertains to unauthorized charges being made on your card, or to merchants not delivering what was promised. It seems the credit card companies have a harder time identifying phony merchants.

I asked American Express a few questions

1. How does AmEx verify that a merchant is legitimate before authorizing it to collect payments?

“We have a number of steps we go through when signing up a merchant to accept American Express, including reviewing both information provided by the merchant and information from external sources. We also require that merchants abide by applicable laws and regulations. After account set-up, we provide ongoing monitoring of merchant accounts.”

2. What is AmEx’s process for investigating and issuing refunds?

“Customers can contact us any time they have a concern about a charge on their American Express Card. Whether it’s a charge they don’t recognize, a service that wasn’t delivered by the merchant or any other reason for a billing inquiry, we are happy to investigate, taking into account both the Card Member and merchant perspectives.”

But giving up is not the answer if a credit card company rejects your dispute. It’s up to you to provide additional information — and that’s what happened here. Loads of people helped crowd-source evidence about SevenFigureCareers.

“We may investigate an inquiry further,” said Tufts, “if a Card Member or merchant provides new or additional information after we review the initial supporting documentation regarding a disputed charge. Based on the investigation, American Express will determine if the Card Member is eligible for a refund.”

3. Doesn’t this kind of thing hurt American Express’s reputation?

“American Express maintains the right to…terminate Card acceptance with merchants that may be harmful to our brand, are illegal or high-risk.”

I judge people and businesses by whether they deliver. American Express jumped on this when I brought it to their attention. Tufts did exactly what she said she’d do, and followed up with me several times by phone and e-mail, when she said she would.

I’ll be happy when I learn John Rice and Cate Bruner have gotten their $2,500 back. I’ll be impressed when I learn American Express has contacted all card holders who lost money to a merchant that AmEx now knows has been operating illegally and fleecing card holders. To me, that’s what brand means.

Will anyone get a refund?

American Express made it clear to me that’s between AmEx and its card holders. Tufts could not disclose to me whether refunds will be issued — the card holders will be contacted directly.

To avoid fraudulent transactions, consumers can visit AmEx’s Security Center to learn more about steps they can take to protect themselves from fraud. It seems we’re all a bit too trusting when we buy stuff — but there’s no assurance that using a credit card will protect you from phony vendors. So check the link and think!

Meanwhile, if you got scammed by SevenFigureCareers, don’t let it slide — this is your chance to try to get your money back again. If you succeed, please let me know.

7F vs. AmEx, MasterCard, VISA

7f-credit-cardsI asked Tufts whether, as a result of identifying a scammer merchant, American Express will notify MasterCard and VISA.

“Yes,” she wrote me. “We may report a business name and the name of their principals to the MATCH™ (Member Alert to Control High Risk Merchants) listing maintained by MasterCard.”

It’s ironic — I reported in another article that Art French touts 7F’s cool new technology of the same name!

“7F has developed an automated MATCH technology platform, a different approach to executive recruiting which gives us a significant competitive advantage in the marketplace.”

It’s poetic justice: MATCH™ is being deployed against a phony MATCH. We’ll see which works better — the one that rips people off, or the one that stops fraud.

Company brand & community responsibility

Where does this episode end? With a few people getting their money back? With a phony merchant losing its ability to collect payments using credit card accounts?

If the merchant is operating illegally, this ends when the merchant gets hauled before the authorities, goes to court, is tried, fined and goes to jail. I believe that’s AmEx’s responsibility — and VISA’s and MasterCard’s — to the community it serves and does business with.

If all a credit card company does is cut off a crooked merchant’s account — that’s not responsible community  behavior. And it’s not a smart brand strategy.

Community responsibility means:

  • Taking legal action against scofflaws to protect the community and the company’s brand.
  • Notifying all AmEx card holders who’ve been scammed by SevenFigureCareers — whether last month, last year, or two or more years ago — that their money was taken illegally.
  • Using all legal means to get all victims their money back.

I realize AmEx can’t disclose its legal matters. But if the company files charges against SevenFigureCareers, that’s a matter of public record, so AmEx should make its actions public.

A company’s brand is defined by how it treats its community.

Only American Express has all the evidence and information necessary to prosecute SevenFigureCareers. Will it protect its brand by protecting its community?

How did we bust SevenFigureCareers?

It’s important to understand what kind of crowd-sourced information led to this consumer win. I’ll lay it out in the next Ask The Headhunter newsletter and here on the website: WWEJSS: How does a fake recruiting firm get a credit card merchant account?

Thanks to members of this community for looking out for one another, and thank you to American Express for its timely action.

Sign up for the newsletter if you don’t already get it — it’s free, it’s weekly, it arrives in your e-mail, and it’s loaded with answers to daunting job-search challenges real people face, in a Q&A format.

Then join us here for the post mortem to learn how to recognize recruiting and career scams — including funky contracts and con artists. There’s lots more to this story!

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