Back to business as usual? I’ve got an industry update for you today:
Back in December of 2020, I wrote an email about operation “Income Illusion.”
That clever name was what the FTC called its sting operation against a few direct response businesses, most notably Raging Bull, a big and successful financial publisher at the time.
The thing is, when the FTC hunts down direct response businesses, they often do so in really flagrant cases of fraud.
But the case against Raging Bull was… worrying. Because it was more basic.
This is what the FTC said Raging Bull had done wrong:
“The defendants claimed in their pitches that consumers don’t need a lot of time, money, or experience, and that the global coronavirus pandemic represents a great time to pay hundreds or thousands of dollars to learn their secret trading techniques, claiming in one ad that the pandemic ‘…might be the most exciting opportunity in decades!’ The defendants also made claims like ‘Learn how you could DOUBLE or TRIPLE your account in One Week!'”
In other words, the FTC took issue with Raging Bull over pretty standard direct marketing practices. Making big claims… using the most flattering testimonials… appealing to people’s greed and sloth.
Well, operation Income Illusion has concluded, at least in the case of Raging Bull. The verdict is in:
1. Raging Bull will have to pay $2.425 million to the FTC.
2. Raging Bull can’t keep making claims about potential earnings without having written evidence that those claims are typical for consumers.
3. Raging Bull can’t keep claiming that investors will be successful regardless of their experience, the amount of capital they have to invest, or the amount of time they spend trading.
Now I don’t know how much money Raging Bull was making back in 2020. But from what little I do know about financial publishing, $2.425 million is what a successful financial promo can pull in a week.
Also, I’m not a lawyer. But again, from what little I know about FTC regulations about marketing, points 2 and 3 above were already law, and are nothing new.
So to me, this entire verdict sounds like an ineffective elementary school teacher pointing to the sign on the wall and handing out detention to the bad kid in the back of the class. “How many times do I have to tell you Billy! No chewing gum! You’re driving me crazy!”
So what will be the consequences of this?
I’m terrible at predicting the future. But personally, I feel like it’s just back to business as usual, if that ever stopped.
After all, a few Agora imprints had a similar verdict made against them almost exactly a year ago. And yet, it hardly stopped them, or anybody else in the industry, from claiming that their next promo “… might be the most exciting opportunity in decades!”
So that’s all I got for you today.
Tune in tomorrow, where I’ll tell you about a little-known statistical anomaly… that’s allowing a small group of American patriots (as well as patriots of a few other nationalities)… to DOUBLE or TRIPLE the odds that their business will be a long-running success.