March 11, 2022

FTC Bullish on Deceptive Tactics: Stock-Trading Website to Pay More Than $2.4 Million

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

The FTC has reached a settlement with the operators of online stock trading site RagingBull.com and affiliated entities (collectively, “RagingBull”) to resolve allegations that RagingBull used false earnings claims to influence consumers to sign up for costly subscription plans that were difficult to cancel in violation of the FTC Act and the Restore Online Shoppers Confidence Act.
According to the complaint, RagingBull made false claims to potential customers regarding the profits they could realize trading stocks through the Company’s services, including unverified testimonials from purported customers claiming to have made “[$]6500.00 in 20 minutes” and “$500 in 15 min[utes].” The Complaint further alleges that RagingBull charged hundreds or thousands of dollars for recurring subscriptions for its services, and made it difficult for customers to cancel their subscriptions by subjecting them to confusing cancellation instructions, lengthy hold times, disconnections, and other issues..
Under the terms of the proposed settlement order, RagingBull will be required to pay $2.425 million to the FTC, and will be prohibited from misrepresenting, among other things, the necessary level of experience, time and effort, and amount of capital necessary for consumers to effectively use RagingBull’s services. RagingBull will also be prohibited from misrepresenting that any good or service containing a negative option feature is being offered on a free, reduced, trial, or discounted basis without clear and conspicuous disclosures of certain terms, and must provide an easy method for consumers to cancel subscriptions, meet specific customer support metrics, and provide customers with notice of the FTC’s order and its obligations to consumers under the order.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.