For people trying to gain a financial foothold, the promise of “$10,000 per week” is a heavyweight representation. But all too often, they wind up losing their life savings to the promoters of bogus investment schemes. The FTC just announced a $2.425 million settlement in its action against RagingBull.com, an outfit the agency says exploited people’s dreams of economic security while often leaving them on the financial ropes and trapped in hard-to-cancel subscriptions.
Filed in 2020 in a Maryland federal court, the lawsuit against Raging Bull.com alleged that the defendants pitched pricy subscriptions that supposedly gave people access to the company’s investment “gurus” who could “double or triple” subscribers’ trading accounts in a week. The defendants’ promotions also featured testimonials from subscribers claiming to have made $500 in 15 minutes and $6,500 in 20 minutes.
The complaint, which named (among others) RagingBull.com, LLC, Sherwood Ventures, LLC, Jason Bond, LLC, Jeff Bishop, and Jason Bond, alleged that the defendants’ big-money boasts weren’t typical of the results that subscribers actually achieved. What’s more, the FTC says Raging Bull didn’t track customers’ trading results, so the defendants had no way to support their claims about how much subscribers would make. According to the lawsuit, the defendants’ customer service record was similarly shoddy. Raging Bull got paid through recurring charges to customers’ credit cards, but people who tried to cancel experienced long waits, phone hang-ups, and other road blocks that made it hard for them to say “Enough!”
To settle the FTC’s charges against them, Raging Bull and its owners will pay over $2.4 million, which will go toward refunds for customers. Among other things, the order prohibits them from making any representations about potential earnings without written proof that those claims are typical for consumers. They’ll also have to get people’s express informed consent before enrolling them in a recurring subscription plan and they must provide an easy way to cancel. The FTC’s action against defendant Kyle Dennis remains pending.
We usually end posts like this with a warning to prospective entrepreneurs about protecting themselves from the snare of high-dollar hucksters. But today we want to talk directly to people who make their living by promoting investments, coaching seminars, franchises, work-at-home programs, MLMs, e-commerce and gig economy offers, and other money-making ventures. In case you hadn’t noticed, the FTC has shown a keen interest in the kind of earning claims companies are conveying to consumers. The FTC has filed new cases challenging deceptive financial representations. And more than 1,100 businesses that pitch money-making ventures have received Notices of Penalty Offenses letting them know that misleading claims could result in large civil penalties.
What should those developments tell you? First, if you make claims about how much people are likely to earn with your product or service, you must have written documentation that supports what you say. Now is the time to conduct a compliance check to ensure that any earnings claims you or your agents make are backed up with verifiable proof, not just hot air and hype. Second, consumers tend to interpret earnings claims from customers to be typical of what other people will make. So don’t mislead people by cherry picking your success stories. Verify the accuracy of what endorsers claim and ensure that their experience reflects the results that others can expect. Third, if you sell subscription services online, provide consumers with a simple mechanism to cancel. Don’t force people to call in and then keep them on hold. And definitely don’t subject them to more sales pitches while they’re waiting.
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On a related front, I am getting email advertising about signing up for investment advice. When I UNSUBSCRIBE from one, another one or two pops up in its place under a different URL. They act like they are news and information sites but they are only fronts trying to get people to subscribe.
How can I get them stopped?