The Federal Trade Commission (FTC) has filed a complaint against OTA Franchise Corporation and other defendants. The FTC has alleged that Online Trading Academy (OTA) has violated the Federal Trade Commission Act and the Consumer Review Fairness Act of 2016. The complaint was filed with the California Central District Court.
The FTC stated that OTA claimed to teach users how to “invest like the pros on Wall Street” by showing users how to find “low-risk, high-potential investing opportunities” via a “patented strategy to any asset class including stocks, options, futures and currencies.” OTA targeted older users. OTA attempted to “convince consumers to pay thousands and often tens of thousands of dollars for OTA’s training and related services, Defendants routinely represent, directly or by implication, that purchasers are likely to generate substantial income with OTA’s trading strategy.” Some examples of profit promotion included a video of a retired person who claimed after he used OTA’s strategy he received “$40,000 in a single trade.” They claimed that users can quickly learn their patented strategy to earn money. However, the FTC claims that “Defendants’ earnings claims are false or unsubstantiated. OTA’s strategy does not work as advertised, Defendants do not track the trading performance of their customers, and Defendants do not have data that would allow them to predict the trading performance of their customers.” Further, if a refund was granted to a dissatisfied customer, the customer was purportedly required to sign an agreement that prohibited the customer from posting negative reviews about OTA or providing negative information to law enforcement for potential legal violations. OTA has allegedly collected “hundreds of millions of dollars” from consumers for their plan, in violation of the FTC Act and CRF Act.
The FTC claims that in order “[t]o entice consumers to purchase OTA training, Defendants make false or unsubstantiated claims through their sales process.” Further, OTA allegedly often paid for all or part of the course, offering loans with an 18 percent interest rate. The ads suggested that users will be able to change their lifestyle as a result of this additional income.
The complaint explained that OTA maintained a team of “Education Counselors,” commission-based salespeople, to enroll consumers in the courses. The Education Counselors check in with consumers and emphasize that they are “likely to profit substantially of they purchase OTA Training.” Consumers were also allegedly led to believe that the program is a selective admissions process. However, anyone who pays for the program will be accepted. Customers disclosed income, wealth, and assets, this data was ostensibly used to create an “Education Plan,” but the complaint alleged that the information was really used as a sales tool.
The FTC claimed OTA violated the FTC Act because of its “[m]isrepresentations of material fact[, which]constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act.” OTA claimed false and unsubstantiated earnings, as well as other misrepresentations for its training program. OTA allegedly violated the Consumer Review Fairness Act of 2016 because it barred consumers from writing a negative review or from contacting law enforcement or other agencies in relation to any potential legal violations by OTA. The FTC has sought preliminary injunctive and ancillary relief to prevent further consumer injury, as well as a permanent injunction to prevent future violations in addition to compensation for damages to consumers.
