Tuesday, March 8, 2022
Bureau of Consumer Protection: Deceptive/Misleading Conduct on Online Stock Trading Site
- The FTC is requiring RagingBull.com, an online stock trading site, to pay $2.425 million and to implement tactics that end the alleged deceptive acts, require affirmative approval from consumers signing up for a subscription, and provide consumers with a simple method of cancelation. According to FTC allegations, the online stock trading site used bogus earnings claims to trick consumers into signing up for services and then trapped them in hard to cancel subscription plans. More specifically, RagingBull.com allegedly made claims that consumers who followed the advice and trade recommendations of its “gurus” could “double or triple” their trading accounts quickly and easily. The FTC complaint further alleges that the defendant included testimonials from purported customers claiming to have made significant amounts of money in short periods of time, e.g., “$6500.00 in 20 minutes.” The complaint noted that Raging Bull’s services, which costs 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 took issue with the allegedly different cancellation requirements that each service had. The proposed order comes on the coat-tail of the FTC’s efforts to crackdown on false earnings claims, returning millions to consumers and requiring click-to-cancel online subscriptions.
Thursday, March 10, 2022
Bureau of Consumer Protection: Deceptive/Misleading Conduct by Payment Processing Company
- The FTC is requiring iStream Financial Services, Inc. (iStream), a payment processing company, and some of its directors to pay $2.3 million. According to the FTC complaint, iStream and its senior directors allegedly debited money from consumers who were seeking payday or cash advance loans, but were actually enrolled in bogus coupon services and were charged initial fees up to almost $100 plus as much as $19.95 each month. Consumers were enrolled in the discount club scheme online and through outbound telemarketing. The complaint alleged that 99.5% of the consumers being illegally charged for the “discount clubs” never accessed any coupons, and that tens of thousands called the defendants to try and cancel the charges, while thousands more disputed the charges directly with their banks. In addition to the monetary remedy, the defendants are permanently prohibited from using any form of remotely created payment order and face a potentially permanent ban from working with high-risk clients.
Friday, March 11, 2022
Consumer Protection: Deceptive/Misleading Conduct in the “gig” economy
- The FTC charged Denver-based HomeAdvisor, Inc., a home improvement projects lead website that also does business as Angi Leads, with using false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers, such as general contractors and small lawn care businesses, who are in search of potential customers. According to the administrative complaint, HomeAdvisor told service providers that its leads resulted in home improvement jobs at rates higher than what its data showed. In addition, the FTC alleges that HomeAdvisor misled service providers about the cost of an optional one-month subscription to a software platform that HomeAdvisor sold along with its leads. The agency also alleges that HomeAdvisor’s claims caused some service providers to follow up on leads “that are below the quality HomeAdvisor promises, and [spent] even more time seeking refunds from the company for those leads.” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated that “[t]oday’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.” He also warned that “[g]ig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses.”