Authorities Warn Village Life Plan May Be Fraudulent
(Story created: 2/3/03)
What if you could pay off your house? Your car? And have absolutely no bills?
It's the American dream.
It's what Village Life, a company based in Smyrna, Tenn., promises.
But, as NewsChannel 5 investigative reporter Jennifer Kraus discovered, it may not be as easy as some make it sound.
"I'm debt free," says Freddie Carr.
Carr and his wife Jenelle run Village Life.
"I own my home. I own my cars. I own everything in my home," Carr adds.
"That's why I got into it," says Warren Carter. The Mt. Juliet man joined Village Life last year and can't wait for the company to pay off his bills.
"I've got a lot of faith in it."
This is the pitch we heard repeatedly when we took our hidden cameras into Village Life seminars:
"I have an opportunity, a way out, to be debt free," one seminar leaders says.
And we heard how Village Life will supposedly pay off your mortgage and other bills.
"This company will buy you a home."
Or a new car.
"I got my car exactly to the date six months from when I signed up," another seminar leader says.
Village Life claims all you have to do is:
Give them $800, and they'll turn it into $100,000.
Give them $2,800, and they'll turn that into half a million bucks.
All you have to do is get four of your friends to sign up for the program.
"If this is too good to be true, then that means everything you've been doing your whole entire life is too good to be true," one seminar leader adds.
"I want this to work," says Freddie Carr.
Carr says Village Life works a lot like car insurance, where everyone pools their money together and pays off bills one at a time.
"It's a blessing from God."
But authorities in at least one state allege that Village Life's "investment program may be fraudulent." The state of Virginia is now investigating possible securities violations and has temporarily barred village life from doing business there.
Authorities here in Tennessee are also closely watching the company.
And others have questions, too.
"We know you can't put in fifty dollars and all of a sudden get our house paid off," says talk radio's money guru, Dave Ramsey.
Carr responds, "The only way they wouldn't get paid is if we didn't have any growth. The whole idea with Village Life is to keep getting new members and their money to pay off the old members' bills... and so on... and so on.
But if people stop signing up, the money eventually runs out.
Carr says they make that perfectly clear to Village Life members.
"We make them understand that by signing up, the only thing you're guaranteed is the refund of your down payment. It does not guarantee you a payout."
But at the seminars where we had our cameras, the only thing that was emphasized was the promise of a payoff.
"I would have thought this was the three most easiest, most simplest steps in the world to get a home or car paid off," one seminar leader says.
And that guaranteed refund?
"We offer anybody a money back guarantee," Carr says.
And one seminar leaders says, "You get a full refund of everything you've ever given us."
But you actually don't get everything back.
The company keeps $300 for operating expenses.
And if you read the fine print of the Village Life contract, it says you can't get your money back until you've been in the program for six months. If you decide to wait longer than six months for your payoff, you also lose the right to a refund.
Dave Ramsey tells listeners that getting out of debt isn't easy.
"It's hard work," Ramsey says. "It's living on a plan and when someone starts giving you a magic pill, don't take it."
But Warren Carter is unfazed. "Everybody's kind of leery about it because it's so good they think it's too good to be true."
Carter says he's counting on Village Life to pay off his home, his cars and his credit card bills one day soon.