I can only hope that inexperienced writers will do their research before signing on with this one.
Check out an informative post about the issue on David Gaughran’s blog. He does a great job of exposing this scam.
A word to new writers: Self publishing is not as difficult as it may seem. Yes, it does take some work. But with a little research and/or asking for recommendations from other authors, it really takes no time at all to find a decent editor, book cover designer, formatter, etc. to sell your books at an affordable cost.