By now, it shouldn’t be news. Using illegal spam and bogus news sites to convey false claims for diet products is bound to attract Federal Trade Commission attention. Oh, and did we mention the phony representation that the products were endorsed by Oprah and the people on the TV show "The Doctors"?
Those are just some of the allegations in a case the FTC has filed against Glendale (CA)-based Sale Slash, Purists Choice, Artur Babayan, and Vahe Haroutounian. How does the operation work? The defendants peddle a host of weight loss products which supposedly contain stuff like green coffee, garcinia cambogia, and “Premium White Kidney Bean Extract.” According to the complaint, one way they market the products is by misappropriating people’s e-mail contacts lists. The defendants send -- or hire affiliates to send -- unsolicited messages that look to the recipients to be from friends, family members, or other contacts. To add to the authenticity, the heading often includes the purported sender’s name, reinforcing the impression that the e-mail is from someone the recipient knows. The messages include glowing recommendations of the products, with linksto where consumers can buy them. A federal judge in California entered a temporary restraining order that freezes the defendants' assets. But even at this early stage, the lawsuit sends four messages to marketers:
- The FTC’s CAN-SPAM Rule draws clear lines between acceptable promotion and deceptive practices. Time for a refresher? Read CAN-SPAM Act: A Compliance Guide for Business.
- No diet, no exercise? No way. Making bogus weight loss claims could win you a one-way ticket to the center of the FTC’s law enforcement radar screen.
- Affiliate arrangements won’t insulate wrongdoers from liability. The FTC has taken action -- and will continue to take action -- against multiple links in the affiliate chain responsible for alleged violations of the law.
- Advertisers like to drop prominent names because they attract the attention of prospective buyers. But if celebrity endorsements are false, guess who else’s attention they attract: The FTC’s.
Double spammy FTC Halts Deceptive Marketing of Bogus Weight-Loss Products (FTC Press release)