How Good Is The Guarantee

[ricastein 10]

There are many services available to those of us who no longer wish to put our money in mutual funds or 401K plans, and would rather invest our own savings, in hopes of generating a return. Some of these include advisory newsletters, websites, scanning software, and "black box" systems that claim to have found a "method" for picking winning stocks or short term price movements.

About a year ago, one of these black box trading system companies called me, claiming their system was producing very good returns. They directed me to their web site and showed me trades that their system had actually made. The returns looked quite good. The cost to "use" their black box trading system was about $6,000.00. I then had to transfer $5,000.00 to a futures broker who would trade the account whenever this trading system produced a signal. This company gave a guarantee. If the system did not produce a profit within 6 months of trading the system, I would get my $6,000.00 back.

Within a month this system had lost almost half of my $5,000.00. I then decided to "paper trade" this account for the remainder of the 6 month period. During this 6 month period the system lost.

After the 6 month period was over, and the system didn't produce as claimed, I e-mailed and called this company numerous times for my refund. Well, apparently, so many people were asking for their refunds this company had to put us all on a "list", and can only pay out so many refunds at a time, in order that the company doesn't go bankrupt.

It has now been over 7 months since I was supposed to get my refund. The company has made no attempt what-so-ever to reimburse me.

So, how good is a guarantee, and what can you do about it if this company just doesn't honor their guarantee? If the company doesn't reside in your state, you'll have to get an out of state lawyer. Quite expensive. You can hire a debt collection agency. Also, quite expensive. You can complain to the BBB or a consumer protection agency. They have no authority to make them pay.

An expensive lesson for me. But a lesson I hope others can learn from, as well as me. Any company can make up a big legal looking document with a guaranty. That doesn't mean they will honor it, or perhaps they no longer have the financial capability to honor it.

In all fairness, I have subscribed to numerous advisory newsletters and tried several different types of trading software and stock picking programs. When I requested a refund, they all honored their guaranty, except for this one.

So, if you're considering giving someone several thousand dollars, think about it, what are your options if this company doesn't honor their guaranty?

Can you afford to lose this money? Is it worth it?

[myndex 10]

Obviously you got scammed.

 

Having said that, you should state the name of the company here, so that others can learn of the scam.

 

Second, you should contact the FTC and report the fraud.

 

Also, for breach of contract, the breach happens is the state of the contract. It actually does not matter if they are in a different state - depending, you can sue in your state, where you executed the contract.

 

If there are many people ,there is likely grounds for a class action suit.

 

The company's assertion that they can only pay out so many refunds else they go bankrupt is a spurious defense.

 

What state are you in, and are they in?

 

 

Good luck

 

Andy

[BlowFish 10]

if there are a lot of creditors first to sue usually gets there money, well in the UK at least. It can be quite cheap to litigate over here for small claims however. maybe the threat of litigation might be enough to put you to the top of the list? The squeaky wheel gets the oil. I would keep squeaking.

 

Good luck anyway.

[ricastein 10]

I'm sorry, but I don't believe divulging the name of this company in a public forum is a wise thing to do. I receive several telephone calls a month from companies such as this, promising all sorts of great returns using their "black box" systems. I received a call recently claiming they made 60% a month. Sorry, but I've already bought that piece of prime swamp land in Florida.

 

I have filed a complaint with the FTC and SEC, informing them of this Madoff type Ponzi scheme. I have not received a reply from either agency. After all, how can you make this guarantee if you did not set the money aside to honor it? I have also contacted a couple of lawyers, but neither one will take the case on a contingency basis. In other words, I will have to pay a lawyer to try to retrieve my funds. If it turns out the company can't pay, even after winning in court, I still have to pay the lawyer. And if the company does pay, the lawyer gets his cut. Either way, I don't get my $6,000 back.

 

I believe I made my point with the last two paragraphs of my article.

 

If there are other people out there who have had their money stolen from them in a similar type fashion, perhaps you could suggest how we can contact each other in a private manner, since I am hesitant to give my e-mail address in a public forum.

[BlowFish 10]

A slight off topic .... Personally I have a pretty poor opinion of lawyers, like any profession the large majority (Pareto principle would say 80%) are a waste of space. Having said that I am fortunate enough to know a handfull that are pretty sharp usually the only fee involved is who buys the beers or advice for advice. Anyway as you have decided not to go that route thats all academic!

 

I have always wondered how enforcable those guarentees are. Less so for systems (as those don't interest me particularly) but more so for ebooks and courses. Some don't attach conditions "money back if you are not delighted" is about the extend of it. Over the years I have become pretty good at spotting the wheat from the chaffe, I can see how black box systems present a unique set of challenges. Extra care needed.

[ricastein 10]

If I may quote Paul Harvey, "Have you ever stopped to think that 50% of the lawyers graduated in the lower half of their class?", or perhaps is was doctors. Well, anyway, you get the point.