In a recent move, The Federal Trade Commission has banned few marketers of dietary and skincare products from making false claims and misleading consumers via fake news sites and online advertising and is making them pay at least $6.4 million.
The FTC has confirmed that many marketers have agreed to settle FTC charges they tried to sell over 40 weight loss, wrinkle reducing, and muscle building products using fake news sites, fake magazines, phone celebrity testimonials etc.
According to the settlement, the marketers earned $179 million by their customers over a period of more than five years, which is the size of the judgment but will suspend all but $6.4 million after that amount is paid in cash and forfeiture of assets.
The fake news sites included had fake reporters and fake endorsements.
Some of the marketers also used bogus “as seen on” CNBC, Fox News and CNBC come-ons on their Web sites.
According to the complaint and settlement, “Richard Fowler, Ryan Fowler, Nathan Martinez and 19 other companies they control (collectively operating as Tarr, Inc.) used deceptive offers and unsubstantiated claims charged hundreds of dollars for “no cost, risk-free” trials, violating many acts like the FTC Act, the Restore Online Shoppers Confidence Act and that Electronic Funds Transfer Act.
The Southern District of California approved the court order which “permanently bans the defendants from using negative option features to sell dietary supplements, cosmetics, foods, or drugs; products that are sold on a trial or sample basis; or products that are sold as add-ons when consumers purchase other products.”
The FTC decision approving the settlement was 2-0. The FTC is down to one Republican, acting chair Maureen Ohlhausen, and one Democrat, Terrell McSweeny, but they don’t need a quorum to act so long as they are in an agreement.