FTC challenges Online Trading Academy’s money-making claims

Share This Page

Ads for health products often target Boomer Consumers, but those aren’t the only claims pitched to people looking toward retirement. An FTC action alleges a company called Online Trading Academy has taken in more than $370 million by gearing its deceptive representations to that demographic. In addition, the complaint alleges violations of the Consumer Review Fairness Act.

Online Trading Academy complaint exhibitsAccording to the FTC, the California-based operation, related companies, and three individual defendants advertise a “patented strategy” that consumers can apply “to any asset class including stocks, options, futures and currencies” to rake in big money. They claim their “training programs” – with price tags as high as $50,000 – will teach consumers how to “invest like the pros on Wall Street.” ”No matter your experience and goals,” people were told the defendants’ “proven” strategy was “designed to make money in any market, whether it’s going up or down.”

The complaint recounts the process the defendants use to attract consumers through TV and radio ads, online promotions, and direct mail. First comes an in-person “preview” seminar. Next, people pay $299 for a three-day “orientation.” That’s where the defendants urge attendees to sign up for seminars costing thousands more. The defendants assign each attendee an “Education Counselor” – a/k/a salesperson working on commission – who follows up by phone or email. According to the complaint, the defendants train their Education Counselors not to “look like, act like or sound like, a traditional salesperson,” but instead to take on a “role” and lead consumers through “The Pain Funnel,” Q&A designed to overcome consumer qualms.

To get people to sign up for more seminars, the defendants routinely offer to finance all or part of the cost with loans at 18%, with the promise to forgive the interest if the consumer pays the total off within six months. The FTC says that in some instances, the defendants lead buyers to believe they’ll be able to repay the loan quickly with money they’ll make using that “patented strategy.”

So how much does Online Trading Academy say consumers will earn? A central theme of their pitch is “You don’t have to work on Wall Street to make money like Wall Street.” Infomercials feature purchasers claiming that “in three hours I made $12,000” or “I made $32,000 in less than seven trading days.” In a YouTube video, a retiree says he made “$40,000 in a single trade.” In addition, a speaker at a live event claimed consumers “could potentially make $50,000 of annual income with an account size as low as $5,000” because Online Trading Academy has “a patent on the fact that you can time the markets,” which “gives us the ability to know when to get in and when to get out, long-term and short-term.”

Other speakers – including some of the named defendants – paint a picture of lavish lifestyles filled with international travel, a “super luxury car” every year, and homes in areas where kids have “live-in nannies, cooks, gardeners.” One speaker said the money he made using Online Trading Academy’s strategy allows him to live in an enclave so exclusive that a neighbor, a renowned Olympic gold medalist, taught his daughter to swim.

But the facts paint a different picture. The FTC alleges the defendants don’t systematically collect data sufficient to substantiate their earnings claims. But even the evidence they do have gave them good reason to know their representations are deceptive. For starters, according to the FTC, the defendants know that few consumers who take out those high-interest, short-term loans repay them in full within six months. Indeed, of loans at least a year old, a significant number have gone into default or other non-payment status – like bankruptcy.

In addition, the FTC says the company’s own customer satisfaction surveys belie their big-money ad claims. For example, a 2018 survey asked – among other things – “As a result of your experience at Online Trading Academy, would you say you’re ‘making money’ through trading and investing?” The results: Just 3% of people who responded claimed to be making “a lot of money,” 31% reported making “a little money,” and 66% said they were making no money at all. The story wasn’t much better for people who had forked over thousands for the defendants’ “Mastermind” membership. According to the FTC, the survey results were so disastrous that Online Trading Academy’s CEO Eyal Shachar forbid anyone from taking a copy out of the room. So the defendants went back to the drawing board and conducted a second survey, which again showed that few people were earning anything and many were losing money. In addition, the FTC alleges that data from a trading platform that Online Trading Academy recommended to its students showed that many consumers didn’t trade at all and of those who did, nearly 75% lost money.

Dissatisfied that the defendants’ “strategy” didn’t live up to the hype, purchasers have often asked for their money back. In numerous cases, the corporate defendants and CEO Shachar require that consumers getting refunds sign a form contract that includes a non-disparagement provision barring them from saying anything negative about Online Trading Academy to anyone – including law enforcement agencies and the Better Business Bureau. The form specifies “negative” comments “on any blog, internet chat room, website, including all forms of social media.”

The FTC lawsuit alleges the defendants made false or unsubstantiated earnings claims and challenges their representations that any consumer – regardless of education, background, capital, or time to devote to the “strategy” – can make meaningful income. The complaint also charges that the corporate defendants and CEO Shachar violated the Consumer Review Fairness Act by imposing a non-disparagement clause in form contracts.

The case is pending in federal court in California.
 

Comments

I posted a positive and non-abusive and kind comment on 3/5/2020 and it wasn't posted either. I don't understand why it wasn't put up online. Makes you wonder why only negative comments are posted online. I feel like only comments that support the governments case are posted. That's not the free and fair AmericaweI live in.

We review all comments that are submitted. This is a moderated blog. We will not post comments that do not comply with our comment policy, available here.

It is highly telling that every response to questions about posts disagreeing with FTC's/disgruntled student's position not being allowed is a canned statement that their forum "is a moderated blog; we review all comments before they are posted. We expect participants to treat each other and the bloggers with respect. We will not post comments that do not comply with our comment policy."

FTC does not allow opposing views to their agenda. Typical strong-arm government censorship - will not listen to both sides of the story.

That is not an excuse NOT to post comments from students who have had different or successful results. Too convenient to push an agenda that may or not be entirely accurate.

Is the FTC law suit applicable to other countries too?
I registered for the course and paid partially and paying monthly installments. I am not satisfied with the money they charge and the training they provide.Training is an eye wash and money collected does not match that anywhere close.
My questions:
1)Do the FTC lawsuit applicable to all other countries as well?
2)Do we need to continue paying our training loan till the lawsuit settlement done?
3)Are we not eligible for full refund though we signed contract?

I'm surprised that nobody here complained about their computer spyware.

Finally..FTC is on board hopeful to shut them down. Hopefully they return our hard earned monies. It was a class for lifetime but it is the same class over and over. More expensive than a masters degree that can give a better stable.job. Shame!

I thought their program sounded like the solution to the fulfillment of my retirement dreams. The instructor of the three day introduction class makes it look so easy. After signing up for the MM Program, in my first class, I felt it was very fast paced and I thought it was my lack of computer skills, but in retrospect, I realize the instructors are the ones who "get it", either because of their former experience working in the stock market, or they just have a knack for teaching the concept. Really, when you ask a question, they either don't understand what you are asking, or they tell you to "ask someone around you who knows how to do that". I realized I had been scammed when I went to what they call a "graduate event" and some of the people there had been in the program 10 years! If the strategy was so effective, why are people still attending these events 10 years later? The classes are geared for students who are taking the class for a second or third time and leave the first time attendees feeling lost. In Core Strategy one student said "I keep getting stopped out so I am retaking this class, hoping I can figure it out". My friend is making money in the stock market without using OTA strategy, just watching the candles and selling when the candle goes up.

Online Trading Academy "my"(OTA), has been a family I have dream't about since 2001. I first learnt about the markets when the World Trade center builds got attacked. I was living in a different country, and my mother explained to me what was happening in the news. I took interest, and ask her what are stocks. And with her limited knowledge she explained to me what they were, and I told her that I wanted to do that.

I have gone to school, but nothing has prepared me for life like myOTA family. Education is key. Discipline is key. Rules, your own rules are a responsibility you live by. I am sadden to hear that my family is now facing this challenge. But life has been about challenges, and I today I stand with my family as we go through this.

I’m a victim of Online Trading Academy still battling to pay the loan without making any money from the strategy. It’s a daylight robbery

I lost $30k of my ‘training’ cost plus $70k in trading. I did not complain before out of embarrassment as I lost some of the trades because of my own mistakes. The biggest issue is that they teach you how to input trades in Tradestation, but don’t teach you how to measure the overall risk and profitability of the strategy. Had I known the Drawdowns associated with their strategy, the amount of trades that it would take to make money -if everything went perfect- I would have never attended to this ‘academy’.

Keep up the investigation and make them pay with their assets. You can ask Tradestation the real status of their students’ accounts. I am sure you will be flabbergasted with the results.

It's about time as a former OTA student myself I'm very excited to see that the FTC is doing something about this.. Thank you!! I might have lost the $14k I gave to the school but hopefully this will eliminate some of the BS...

I'm so glad that you got these crooks they Robbed me

Very shocking! I went to an Ascend business conference event and Mr Womderful (from shark tank)
Even prompted them..... people lined up to up buy these 3 day packages! So glad I didn’t jump the gun...
Will stick to my conventional methods of being self taught due to the aggressive sales culture that exists!! Thank goodness for the FTC.... it’s time all these sales happy places with no proven data get halted! It’s getting out of hand and at unacceptable levels of bad!

A number of years ago, I spent over $20,000 to learn how to trade futures. After one year and losing $8,000, I stopped. I do not use their system any longer. They hype the returns you can make but never show documentation of what their instructors are making following these systems.

I would like to join the current FTC Litigation because I am a current OTA student who has requested a refund of my Tuition prior to the February 28, 2020 FTC Restraining Order issued against OTA. I had expressed dissatisfaction and disappointment to an OTA Education counselor at the Brooklyn Center. I was assured that I would learn more in the retake which was scheduled for May 18, 2020 and for the second asset class which has been cancelled after the ruling. I am yet to hear of the tuition refund from OTA and my calls and emails go unanswered.

Can FTC stop their collecting agencies? Universal Account Services is still sending statement of accounts showing the amount I have to pay and the interest and due dates...while this is on a case I hope no collection agencies must be allowed to collect from students. Their phone number is 888 8422461/ usupport @ ugafinance. com.

I totally agree with everyone. I initially signed up for the Cash Passort bundle package for $20,000 in late January for the February courses. However, something told me not to proceed and get my refund prior to taking the courses. I recieved only a portion of my money back from my bank and yet still waiting for OTA to complete my refund that I have requested several times. Then it dawned on me how cleverly they convinced me to use my IRA money to pay for the classes. Now I feel so stupid that I allowed the Educational coach to talk me into withdrawing from my hard earned income. In essence, OTA is guilty of what they accuse Wall Street doing. The difference is that they evaluate how much money a person has in their IRA account and use their over priced packages to take your money in broad daylight while Wallstreet takes your money overnight during a recession or bear market. I wouldn't be surprised if the OTA uses a portion of the so called tuition money to give as student loans and pocket an extra portion for their trading gain. I tried in the beginning to give them the benefit of the doubt to come through by now, but I really need my refund and glad the FTC is involved.

Does this apply to outside of US franchisee as well?. I am stuck here. Can i stop paying them? If so do they send to credit bureau?. Please advise

My wife who is a two time lung cancer survivor can not attend the upcoming $200 three day class because of the corona virus outbreak and OTA won’t answer my emails or phone calls, I feel after doing research this whole thing is a scam.
All their voice mails are full. What can I do?
Thank you

You’re lucky you only lost $200 people on here talking about upwards of $15,000

OTA are total scammers and prey on the middle income and older people who are looking for income as a supplement. The instructors also know this fact and portray OTA as this great opportunity of a lifetime. I invested, paid so far at least $14K of the $30,000 package that I was pressured to sign up on the three day class I paid $199.00 for. A WH from Texas was specifically at the Bklyn Center to sign up students in November 2019. He gave me all this hype of how if I dedicate the time and effort now that I am retired into trading using OTA strategies I will make a lot of money. I fell for the bait and signed up for their Core and two asset classes for $29,995.00. I was told I had to pay down $7,500 on a credit card and pay over $1,102.00 per month to OTA (Universal Account Servicing is the third-party billing service provider for OTAF New York, NY. and if not paid out by May 2020 I would be charged 16 percent interest rate for the balance. Once I took the first five day Core Strategy class, and talked to others who were retake students I realized I just signed up for disaster and that I was paying for classes that would never work in my favor. More so that OTA was a scam. I went in to see the OTA education counselor at the Brooklyn Center and asked about a refund. He immediately got up and closed his door so that other students could not hear the conversation. I was then convinced that OTA is indeed a scammer. This counselor told me that there was no way I could get a refund and immediately state that I could have a retake class. I also found out from other students that everyone was given a different price for the same classes. This fact made me very worried and stressed that I had been taken for a ride. I sent numerous emails to OTA requesting a refund but to date I have not heard from them. Instead OTA keep sending emails to me to sign their petition and with follow up phone calls and a card, where I am encouraged to say how happy my experience has been with OTA. In addition, that I indicate that I have been making money using OTA to support OTA case against FTC. Many students have also received the same emails and phone calls of the same nature. I would like to join the FTC litigation with the hope that I can recover the thousands paid to OTA.

I’m so glad to see the FTC pursuing these con artists. I’m a pretty savvy trader (series 63 20 years ago). I accompanied a friend who is a novice to an OTA free introductory session on 2/29. My jaw dropped when the sales guy promised that their “software” could predict market downturns and upturns with close to 100% accuracy. The pitch was very calculated and good - I can see how they sucker people in. I probably asked too many uncomfortable questions since they never called me back even though I filled out my contact info - they did call my friend though.

It's a shame that this site is not allowing perspectives from both sides. Shameful!

I'm a student of OTA. After learning about the FTC pending lawsuit I asked for the refund. OTA Georgia declined to refund and asked to make remaining loan payment. They claimed they are not affected by the lawsuit and operating as before. When I referenced the court order that they cannot collect any loan payments from students they closed my account and marked it as delinquent.

Is it possible for students to get there money back not knowing this company was a scam?

Can we get is as soon as we can?

My 2+ years experience as an OTA 'student' have been an absolute disaster. I consider myself of above average intelligence, not prone to being scammed or taken advantage of easily. Yet, I fell for this scam. I went all in and bought the full package of 'education'. I made every attempt to use 'The Strategy' yet failed miserably time and again. I hold myself responsible for buying into the hype but I definitely hold OTA fully accountable for what is now clear to me to be a giant hoax. Their 'cast of characters', all those 'long time' students who continually chime in on the chat panel during lessons and sessions, were very convincing for quite some time. I had been working so hard and not getting the results I saw posted, had lost so much money, that I became too embarrassed and ashamed to tell anyone. I became deeply depressed and now I am fully convinced that I made an enormous mistake giving even a single dime to OTA. I wish I had never heard of them and will now begin my battle to receive a full refund.

If the FTC wins you’ll get a whooping $100 back at. best. Not sure it’ll do

Great to see the FTC go after OTA. I enrolled in 2008, initially I only spent $10,000 for classes and XLT online, later I was lured into spending another $8,000 on more futures programs and XLT's. The lure for me was the near misses that constantly had me thinking "if I knew just one more asset I would be making money." For example the stock trading XLT would always bring up that you must first check the futures to get the right move before trading stocks, then in the futures they would always mention forex or options. After I spent the $18,000 I ended up losing about $20,000 in the markets. Ironically I lost that money following their advice and had I done what the "sheeple" do, according to them, I would have bought and held. Had I bought and held like a novice in 2009 I would be well above my $20,000 investment. Having been to several live classes I would always ask if the people next to me were making money and nobody ever was. It was always a scam, now I hope they pay for it.

OTA is a sure ripoff they took 40k from my friend who was down and out going through a divorce and scammed her with the promise that she will make double in no time. She has no access to a computer at this time and never even access any of the class online. They sure took advantage of her. The so called Education Counselor should be made to pay dearly. I hope she get back her money through this FTC case. She has since filed a complaint with FTC against OTA

When I contacted OTA after hearing about the FTC lawsuit they declined to refund the paid fees amount and asked to make the remaining loan payments through Universal Accounting Services (UAS). When I questioned they cannot collect student payment as per the court order, they canceled my OAT student account as delinquent. Please help.

same thing here. They said the account is deceased but the collections continue. We need help for refund soon please.

I went to their 3-day training. The academic advisor/salesman was so aggressive that I had to leave after two days. They take you to separate room one-on-one and shame you if you don't buy it. I especially feel bad about the old and retired people who want to find a second stream of income. May God protect them and their life savings!

I went to a 3 day training and signed up for the course and lost every cent. I want the money I lost back. I did stop paying for the loan and stopped contact after watching over $3,000 and no progress, just suggestions I take more courses. How do I get involved to get my money back ?

Wow I thought I was scammed simply by the way I was brought into a room and had to complete the financial history info they needed to assess where I had money. Looking back I was an idiot!! They asked $32K for a class I thought was inadequate at best. That was my retirement dream. They’re still taking money out of my account. I’m cancelling those pymts tomorrow because I am not getting anything from it. Scammers they are. Thanks for letting me know it was just not me !!!

I have paid over $44,000.00 for education to the Mastermind level in 2019 at the Overland Park, KS, Online Trading Academy. Much of that expense was financed through two student loans. One was through Mary Mae Financial and the other was through Tuition Options. I was told the education could be deducted on my income taxes it I maintained a certain level of trading to show that I was an active trader. Following completion of the education I invested heavily in a Tradestation account, which was their recommended platform for trading, and proceeded to execute first simulated trades and then moved to live Futures trading. I was assured by Matt McGrath, their Senior Education Counselor who sold me the courses and structured the financing, that I should make as much as $1,000 per day trading at that level. Over the next several months I executed 487 trades using their strategy. Gross profits were over $26,000.00 and Gross losses were over $-51,000.00 for a net loss of nearly $-25,000.00. In addition, commissions on those trades was over $1,400.00. I discontinued trading in September until I could determine why their trading method was not working for me. When 2019 ended and I began putting together my 2019 tax returns I discovered that the education was not tax deductible as they claimed because the Online Trading Academy is not a certified education facility. Additionally, the two student loans I established do not qualify as student loans for the same reason. Therefore, I did not receive a 1098-E from both lending organizations and could not claim the interest on my student loans as tax deductions. I concluded that the Online Trading Academy uses false claims in their marketing. They provide only enough education to get the student in financial trouble. Their education is not complete enough to create competence in their students and their claims of financial return are unfounded. They failed to disclose that their facility is not certified by law to qualify for certified student loans and that the loans cannot be treated as student loans which the US Government will recognize.

Pages

Add new comment

Comment Policy

Privacy Act Statement

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system (PDF), and user names also are part of the FTC’s computer user records system (PDF). We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.