The operators of RagingBull.com, an online stock trading site, have settled FTC charges alleging they used bogus earnings claims to get consumers to sign up for costly subscriptions that would give them access to the company’s investment gurus. Users of their services could supposedly double or triple their trading accounts in a week. One testimonial claimed the subscriber made $6,500 in 20 minutes.
The company also allegedly tried to profit off the COVID pandemic. One “guru” claimed he racked up nearly $500,000 in profits by trading stocks related to the pandemic and that subscribers to the company’s tips could replicate that success.
The FTC said such claims were not typical of RagingBull subscribers; many lost significant amounts of money using its services and trade recommendations. In fact, the company didn’t track its customers’ trading results and, therefore, had no basis on which to make claims about how much they could make.
RagingBull’s services are set up as recurring subscriptions that are charged quarterly or annually and cost hundreds to thousands of dollars. People who tried to cancel them experienced long waits, phone hang-ups, and other roadblocks.
RagingBull has an F record with the BBB with over 400 complaints filed in the past three years. Many were prompted by the company shutting down its services because of the FTC action, but others mirror the FTC’s allegations. For example:
- “I have tried unsubscribing to their scam emails over one hundred times over the past year. Yet they continue to spam me with their sales pitches. This needs to stop immediately.”
- “I signed up for multiple raging bull services after seeing their crafty advertising. I was led to believe that you didn’t need much experience to start following their trade recommendations. I tried multiple services and each time I was worse off than just using my own stock picks.”
- “They advertised that by learning their techniques or simply mirroring their trades, I could make a lot of money. I mirrored only the trades they said were Mortal Locks or their best pick in weeks. All of them lost money. I’ve lost $28,000 of hard earned money.”
RagingBull isn’t the only company pitching money-making ventures that misleads consumers about the potential earnings. In October, the FTC sent Notices of Penalty Offenses to over 1,100 companies describing the kinds of representations it considers deceptive. They include the ones it accused RagingBull of, as well as falsely telling consumers they don’t need experience to earn income and that they have to act immediately to participate.
Companies receiving the notices included multi-level marketing companies offering the chance to own a business, investment coaches promising to share secrets on how to beat the odds, and “gigs” that pitch a steady second income. The FTC didn’t accuse any specific company of wrongdoing, but clearly it’s concerned there may be other RagingBulls out there.
The FTC says companies should learn these lessons from its enforcement actions and notices:
- They should have verifiable proof substantiating earnings claims.
- They shouldn’t cherry pick success stories. The experience of endorsers should reflect the results others can expect.
- They should provide consumers with a simple mechanism to cancel subscription services.
Consumers should thoroughly research any business or investment opportunity, avoid high-pressure pitches, and take testimonials with a grain of salt.
Randy Hutchinson is the president of the Better Business Bureau of the Mid-South. Reach the BBB at 800-222-8754.