The operators of RagingBull.com, an online stock trading site that used bogus earnings claims to trick consumers into signing up for services and then trapped them into hard-to-cancel subscription plans with costly charges, will be required to pay $2.425 million, end the earnings deception, get affirmative approval from consumers for subscription sign ups, and provide them with a simple method to cancel recurring charges.
“Raging Bull’s baseless earnings claims and hard-to-cancel subscriptions cost consumers millions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s proposed order continues the FTC’s crackdown on false earnings claims, returning millions to consumers and requiring click-to-cancel online subscriptions.”
In December 2020, the FTC filed a lawsuit alleging that Raging Bull marketed its stock and options trading services to consumers with deceptive earnings claims, including claims that consumers who followed the advice and trade recommendations of Raging Bull’s “gurus” could “double or triple” their trading accounts quickly and easily.
As the complaint further alleges, the defendants featured testimonials from purported customers claiming to have made “[$]6500.00 in 20 minutes” and “$500 in 15 min[utes].” In addition, the defendants allegedly tried to profit off the COVID-19 pandemic, with one “guru” claiming that he was able to “rack up nearly $500K in profits by trading stocks related to the COVID-19 pandemic” and that consumers could replicate this success.
According to the complaint, those claims were not typical of the results of Raging Bull’s subscribers, and many lost significant amounts of money using Raging Bull’s services and trade recommendations. The company also did not track its customers’ trading results and had no basis on which to make any claims about how much subscribers could make.
The FTC’s complaint noted that Raging Bull’s services, which cost hundreds or thousands of dollars, were set up as recurring subscriptions that are charged quarterly or annually, and that subscribers faced significant hurdles in preventing those recurring charges. The FTC alleged that different services had different cancellation requirements, and that in many cases, the company’s customer service line had lengthy hold times, disconnections, and other issues that led to subscribers being charged for renewals they did not want.
Under the terms of a proposed settlement order, settling defendants RagingBull.com, LLC; Sherwood Ventures, LLC; Jason Bond, LLC; Jason Bond and Jeff Bishop will be required to pay $2.425 million to the FTC.
In addition, the order will prohibit the settling defendants from making any claims about potential earnings without having written evidence that those claims are typical for consumers. The settling defendants will also be prohibited from making claims misrepresenting that purchasers can be successful in trading regardless of their experience, the amount of capital they have to invest, or the amount of time they spend trading.
The order will also require the settling defendants to provide consumers with an easy method to cancel their subscriptions and require them to get express, informed consent from consumers before signing them up for a recurring subscription plan. It also requires that consumers who call to cancel cannot be placed on hold longer than 10 minutes, and that any voicemails requesting cancellation be returned within one business day. The settling defendants will also be required to provide Raging Bull customers with a notice of the FTC lawsuit and an outline of their obligations to consumers under the proposed settlement order.
The FTC’s lawsuit against defendant Kyle Dennis will continue.
The Commission vote approving the stipulated final order was 4-0. The FTC filed the proposed order in the U.S. District Court for the District of Maryland.
NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.
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