The FTC’s mission is to stop fraudulent practices in the marketplace and protect the consumer.
Recently, they began cracking down on the stock market thieves and their marketing schemes.
Specifically, they’re going after “Online Trading Academy” who has “used false or unfounded earnings claims to sell “training programs” costing as much as $50,000. OTA has collected more than $370 million from consumers nationwide within the last six years.”
This is a long time in the making. Everywhere you look on the internet, there seems to be another stock market guru promising you infinite returns or easy tricks that someone can pick up to initiate instant profits. The marketing world is now saturated with this kind of illegal activity, and it seems like the Federal Trade Commission is beginning to magnify on the practices.
The people involved with this scheme, specifically, “are charged with violating the FTC Act and the Consumer Review Fairness Act.” The commission voted unanimously to move forward with the proceedings.
This is a great thing, as a lot of other trading academies, stock trading shops, and vague marketing scams have been popping up on every square inch of social media.
The advent of digital marketing has proved lucrative for many businesses. Advertisers appearing out of any crevice, willing to push any product on a digital billboard they can get their hands on.
From Google to Facebook to Amazon, we see these advertisements everywhere.
Anywhere you go, you’ll see all sorts of slogans on banners. It could be that the company proves they’ll win 95% of their trades or that they make 100% returns in a year. Some people even go so far as to guarantee it. Other times, you see some story about a person who magically converts $15,000 in debt to $3 million in under a year.
It’s some kind of miracle. According to these marketing campaigns, anybody can do it.
This is where the Commission is beginning to hammer in a legal lesson. The FTC can do more than impose hefty penalties and fines. Thankfully, it can also aid in criminal prosecution, should these cases go that far.
Here is what the FTC says on their website:
Specifically, in contrast with that, the Commission had scraped a few of the many testimonials from OTA’s website:
“It took me 18 years to develop a decent salary. After three months here at OTA, I’m making almost as much money as my business.”
“The story of Jasmine Wang, an OTA employee, who purportedly grew a $12,000 trading account to $128,000 in nine months.”
“A promotional video featuring a retiree who purportedly used OTA’s trading strategy to create a retirement income that was bigger than his income while he was working, including $40,000 in a single trade.”
Things like this are common across the internet. If the FTC succeeds in this case, it will set a great precedent to safeguard consumers moving forward. Better yet, it will set a clear legal benchmark for the future of digital marketing.
In another part of the FTC’s filing, they state:
Many dissatisfied customers have requested refunds of the monies they paid for OTA’s training. In numerous instances, when Defendants agree to honor a refund request, they condition the refund on the consumer signing an agreement barring the consumer from posting negative reviews about OTA and its services, and from providing negative information about OTA and its employees, including potential law violations, to law enforcement agencies.
This is, in fact, very common across the board. This is why companies such as The Raging Bull LLC not only change their business name all the time, but they have so few negative reviews on places like the Better Business Bureau:
Companies like this one generally aren’t shy from either purchasing reviews on places like Trustpilot to boost the semblance of authenticity. This is the fundamental nature of fraud that the Federal Trade Commission is attempting to stop.
To a certain extent, businesses have snake-oil salesmen. Car dealerships work off commission, as do real estate agents, etc. People need to transact in order to make a living. However, these commission agents sell you something. The trajectory of digital marketing today isn’t actually attempting to sell you anything. It’s imposing as a form of free insurance when it is going to leave you with less than you started — at its core, it’s an illegal transfer of wealth that has been flying under the FTC’s radar for a long time.
The commission is finally catching on.
One of the more critical things moving forward will be disproving OTA’s claim that anybody can purchase their online course and use their strategy to earn a substantial income.
The Online Trading Academy is only one of many fraudulent day trading marketers out there. And, according to the FTC, OTA alone has collected $370 million in the last six years.
More recently, on April 7th, a federal court granted the FTC a preliminary injunction to halt all business activity of OTA.
Time will tell how this case will play out. If it ends up a win for the FTC, I’m anticipating that many of these gurus all over the internet will magically begin to disappear.