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Fembots, opiates and federal prison – the latest on FTC consumer protection

digitallaw — Fri, 22 Jul 2016 16:49:07 +0000

Ashley Madison

The website whose tagline used to be “Life is short, have an affair” saw many of its users exposed last summer when hackers leaked personal information related to more than 30 million users. Now, amidst the company’s efforts to rebrand, its parent company, Avid Life Media, is facing an FTC probe due to the website’s former use of “fembots.”

The thrust of the investigation is that the company used fake female profiles (fembots) to lure in male customers and artificially inflate the number of female users on the site. This is not the first time a dating website has been accused of using fake profiles to grow its customer base; JDI Dating paid $616,165 for similar practices in a 2014 settlement with the FTC.

The FTC has yet to comment on the investigation.

Sunrise Nutraceuticals

Last year the supplement company was sued by the FTC due to its claims that its product, Elimidrol, would help opiate addicts “permanently overcome withdrawal – the first time.” However, according to the FTC, Sunrise had no human clinical trials to substantiate any of the product claims.

A final stipulated order was entered into July 6, 2016. In addition to requiring Sunrise to have scientific evidence before making future claims, the order includes a judgment of almost $1.4 million – with $235,000 to be paid up front and the remainder suspended based on the company’s financial situation.

Kevin Trudeau

Last month, the FTC issued refund checks totaling approximately $6.3 million to consumers who had purchased Trudeau’s book, The Weight Loss Cure “They” Don’t Want You to Know About. Trudeau advertised the book as an eat anything you want type of plan, but in reality, the book called for daily injections of prescription drugs and a minimalist diet.

Trudeau’s history of fraudulent practices and run ins with the FTC dates back to 1998; and, due to his repetitive and fraudulent actions, and attempts to escape paying millions of dollars in fines, Trudeau is serving 10 years in federal prison for criminal contempt.

When selling products or services directly to consumers, consult an attorney to ensure the company’s sales and marketing practices stay above board; otherwise, you may end up as the subject of one of our articles…

Trimming The Fat

digitallaw — Thu, 29 Oct 2015 13:11:45 +0000

Right about now you are likely feeling a bit plumper after indulging on a Thanksgiving feast and all of those beloved leftovers. If, like some of us, you are looking for a way to shed a few pounds prior to the next wave of holiday goodies, we recommend the traditional methods of diet and exercise rather than “miracle” weight loss supplements, as many of these companies are feeling the burn after getting their gooses cooked by the FTC.

Some businesses involved in the “Pure Green Coffee” scheme have reached multimillion dollar settlements with the FTC after making false claims regarding the effectiveness of the product. The defendants marketed the dietary supplement using fake news sites, footage from The Dr. Oz Show, supposed consumer endorsements, and “clinical proof” that dieters could quickly lose weight without diet and exercise.

Additionally, the FTC recently sent out warning letters to 20 unnamed sellers and marketers of weight loss supplements. The letters warn that Commission staff has reviewed their weight-loss claims and that they could be misleading. They also detail what type of scientific evidence the FTC says is needed before making weight-loss claims and using consumer testimonials. Despite the warning, if the products are making money, some of the letter recipients may ignore the warning.

While some companies can afford to lay it on thick when it comes to their product claims, others cannot risk an FTC investigation and potential monetary judgments against them. If you are selling a nutraceutical, we recommend doing your research before you blur the line between clever and deceptive advertising.

Digital Law Group has experience in reviewing product claims as well as representing companies in governmental investigations.

Please Email us if you have any questions or concerns regarding the content above.

Caffeine in your undies got ya jumpy?

digitallaw — Thu, 23 Oct 2014 22:16:09 +0000

As some of you may know, FTC investigations are commonplace in the consumer product industry. What you may not know, is complaints by consumers that the product did not perform as expected are oftentimes the trigger for these investigations. Most recently in the hot seat, Wacoal America, Inc. and its caffeine-infused underwear, iPant. The iPant promised that the caffeine would pass through the skin leaving users with lasting slimming results. The FTC found the product claims to be unsubstantiated. Not only will Wacoal pay over one million dollars in consumer refunds, but they have become the butt of many coffee-related jokes.

Although many companies make an effort to play by the rules, some have no reason to. Selling for up to $80.00 each, Wacoal likely still came out on top financially; despite the fines. However, this is not the case for all. Some companies cannot afford the risk of walking the fine line between clever and deceptive advertising. So what do you do? We advise that you keep your potential enemy close – when in doubt, get an advisory opinion from the FTC.

The FTC provides opinions to companies and industry organizations on a vast array of issues, including product claims. Although they are only “advisory,” and not binding on the FTC, the opinions provide insight as to whether your proposed practices or claims may lead to consumer complaints and an FTC investigation down the road. The bottom line is, it could save you a lot of money in the end to ask for a little guidance in the beginning.

The FTC attorneys only consider the facts presented to them in your inquiry. This means that it is critical to include all of the relevant rules and regulations, as well as all of the facts. Digital Law Group can help you determine what issues to present to the FTC, draft your inquiry letter and evaluate the issued opinion.