However, he became involved in a bitter dispute over an alleged exposure of the medium Rudi Schneider, causing him to resign from the laboratory and publish attacks on Price.

[8][9] Osty conducted a series of experiments with Schneider in 1930 at the Institut Métapsychique and considered his psychokinetic phenomena to be genuine.

Price made a prolonged investigation of Rudi Schneider and proved conclusively that the medium resorted to trickery when he believed himself to be unobserved... Osty has too often shown in the past, despite some intellectual ability, evidence of an amateurish and uncritical approach to his subject.

"[10] In 1954, Rudolf Lambert in the Journal of the Society for Psychical Research claimed that Osty had shown him some suspicious photographs of the medium Eva Carrière depicting fraudulent materializations that were artificially attached to her hair by wires.

As, however, Richet and Schrenk-Notzing protested energetically against it, and M. Jean Meyer, a militant spiritualist who financed the Institut Metapsychique, also forcibly demanded the concealment of the scandal, Osty had to give up the idea of publishing his discovery.