Since 2023 the FTC has taken action against at least five ecommerce automation companies that sold “done for you” Amazon and Walmart stores as passive income. The cases follow the same pattern: big earnings claims, large upfront fees, stores that broke marketplace rules, and pressure on clients not to complain. Several ended with the owners permanently banned from selling business opportunities.

We run an ecommerce automation agency, so we have a stake in this story. Every one of these cases makes buyers more wary of companies like ours, and that’s fair. The best thing we can do is explain what went wrong, so you can spot it before you pay anyone.

The details below come from FTC announcements and case records. In settled cases, the defendants usually didn’t admit the allegations.

Click Profit

Click Profit, which also traded as FBALaunch, Automation Industries and PortfolioLaunch, promised to “build you a massively profitable e-commerce store from the ground up” on Amazon, Walmart and TikTok. According to the FTC’s case record, it sold passive income from an AI-powered system, falsely claimed ties with Nike and Disney, and cost consumers at least $14 million.

The FTC also alleged that Amazon suspended or terminated about 95% of the stores for breaking seller policies, as NBC reported. In August 2025 the defendants agreed to orders banning them from the industry and handing over assets for refunds.

The lesson: a store that breaks marketplace rules gets shut down, and a closed store can’t earn anything, whatever the sales pitch said.

FBA Machine (Passive Scaling)

FBA Machine, first called Passive Scaling, told consumers they could earn money from online stores run with AI-powered software. The FTC sued in June 2024, alleging the company took more than $15 million from consumers without delivering the promised earnings.

In July 2025 the owner agreed to a permanent ban from selling business opportunities and a $15.7 million judgment, partly suspended because he couldn’t pay it in full. The order also bars him from enforcing contract terms that the Consumer Review Fairness Act prohibits.

The lesson: income promises with nothing behind them.

Ecommerce Empire Builders

Ecommerce Empire Builders sold training for almost $2,000 and done-for-you stores for tens of thousands of dollars. The FTC alleged that it encouraged people to believe they could build an “AI-powered Ecommerce Empire” and make millions, and that those profits never came. A May 2025 order permanently bans the company and its owner from selling business opportunities.

The lesson: the pitch sold a lifestyle, not a business plan.

Automators AI

Automators AI, which also used the names Empire Ecommerce and Onyx Distribution, told clients they could be “passive investors” in Amazon and Walmart stores. Its claims included “$4k-$6k consistently monthly net profit.” The FTC says consumers invested $22 million and most lost significant amounts. When clients complained, they were allegedly offered new stores instead of refunds and pressed to sign non-disparagement agreements. A federal court temporarily shut the operation down in August 2023.

The lesson: specific income figures, plus claims about the owners’ success that the FTC says were false.

DK Automation

DK Automation sold Amazon “done for you” programs as a “100% turnkey” business for as much as $100,000. The FTC said the company used fake reviews and suppressed negative ones. Under the settlement, the owners agreed to return $2.6 million to customers.

The lesson: fake social proof and a promise that the business would run itself.

The 5 patterns behind these cases

  1. Passive income promises. Each company sold a store as income without work. A real store needs decisions every week.
  2. Specific earnings claims. Monthly profit figures and payback dates are what the FTC’s Business Opportunity Rule targets when they can’t be backed up.
  3. Large upfront fees. Clients paid thousands, sometimes tens of thousands, before they saw results or even a plan.
  4. Breaking marketplace rules. Stores were suspended for policy violations. Shortcuts that bring quick sales tend to end with a closed account.
  5. Silencing complaints. Gag clauses and refund-for-silence deals came up again and again. The Consumer Review Fairness Act makes those clauses illegal in consumer contracts.

What this means if you’re choosing an agency

The lesson isn’t that every ecommerce automation company is a scam. It’s that buyers need to check what these companies hid. Make sure you own the account and receive the payouts. Get a written, itemised budget. Read the contract for review and refund terms, and ask how the agency keeps your account within policy.

Use our 12 questions to ask before you hire an ecommerce automation agency as a checklist, and read is Amazon automation legit for the warning signs in plain terms.

At AmzWave we don’t sell passive income, promise earnings or take control of your account. You can see what we do on our Amazon automation services page.

Frequently Asked Questions

No. The FTC has acted against specific companies over false earnings claims and other deceptive practices. Running a store for a client is still legal.

It requires sellers of business opportunities to give buyers a disclosure document and to back up any earnings claims they make. Several automation companies were accused of breaking it.

In some cases the FTC collects assets to refund consumers. Check the case page on ftc.gov for refund announcements.

Search the company's name and its owners' names on ftc.gov and in the news. These companies often trade under several names, so search each one.