The Federal Trade Commission (FTC) has filed a lawsuit against Digital Income System, its owners, and top promoters, alleging a fraudulent scheme designed to exploit individuals seeking to earn money from home. The regulator claims the operation preyed on consumers' desire for financial independence.

The FTC's complaint, initially filed under seal, emerged following a reader tip. ScamTelegraph previously reviewed Digital Income System in April 2019, identifying it as a $25,000 traffic rotator pyramid scheme. Reader reports suggest the system may have collapsed around May 2020, with the FTC filing its suit in November 2020.

Named in the FTC's action are Digital Income System Inc., owners Derek Jones Foley and William Foley of Florida, and promoters Christopher Brandon Frye of Arizona, Jennifer Hedrick of California, and Kaitlyn Scott of South Carolina. The FTC contends these defendants falsely promised consumers substantial earnings through the sale of memberships.

Defendants allegedly charged steep membership fees, yet the vast majority of participants never achieved significant income, and many earned nothing at all. Promoters like Brandon Frye were featured on Digital Income System's website, with Frye himself claiming to have earned over $500,000. Jennifer Hedrick reportedly used the COVID-19 pandemic as a marketing hook, suggesting the system was a necessary solution for those laid off or unemployed due to the virus.

Promoters frequently displayed Digital Income System checks on social media. Owner Derek Foley also made extravagant income claims, promising a lifestyle of wealth with "almost ZERO effort" for even complete novices.

Upon joining, new affiliates were promised leads generated by "the system." However, consumers repeatedly reported that the system failed to produce sales. When confronted with these issues, defendants allegedly encouraged consumers to purchase additional leads or "traffic" from recommended businesses, asserting this would boost their earning potential. The FTC alleges this practice was part of the ongoing fraudulent operation.