In a lawsuit filed earlier this year, the FTC alleged that Online Trading Academy made unsubstantiated mega-bucks promises about their purported investment training programs. According to the complaint – and the defendants’ own data – for most OTA customers, the only time they saw big money was as it flew out of their hands and into the defendants’ pockets. Under the terms of a settlement, OTA founder Eyal Shachar and others will pay millions toward refunds for consumers. In addition, OTA will have to forgive the debt of thousands of customers who took out financing to take their courses.
Among other things, the settlement prohibits the defendants from making express or implied earnings claims unless they’re non-misleading and supported by written materials that substantiate their representations – documents that must be available upon request to consumers, potential purchasers, and the FTC.
To address alleged violations of the Consumer Review Fairness Act, the order prohibits the use of contract terms that limit consumers’ ability to review the defendants’ products and services. It also bars the defendants from imposing contract terms to restrict consumers’ communications with the FTC and any other law enforcement agency. For consumers with contracts that contain those provisions, the defendants must contact them personally with a notice titled “Your Right to Post Honest Reviews and File Complaints.”
For consumers who took out loans to pay for training, the settlement requires OTA to offer debt forgiveness to consumers whose debt OTA currently holds. In addition, the settlement requires defendant Shachar to pay at least $8.3 million. He’ll also have to surrender the Cessna airplane, the Bentley, the Escalade, the motor home, and six minivans. For every dollar of debt forgiveness that consumers accept, Shachar’s required payment will be decreased by 70 cents, up to $4 million. Darren Kimoto must pay $736,300 and surrender a 2017 Land Rover. Samuel R. Seiden must pay $158,000. The cash and proceeds of the property sales will be used for consumer refunds.
Consumers who are eligible for debt forgiveness will receive both an email and a letter from the defendants explaining the application process. Looking for details about the settlement? The FTC has more information.