When it comes to certain diet pills, perhaps the only things getting slimmer are the wallets of the companies that sell them. Those companies, including Sale Slash LLC, agreed to pay over $43 million in a settlement last month after the FTC alleged they violated provisions of the FTC Act and the CAN-SPAM Act.
According to the FTC’s amended complaint filed in October 2015, Sale Slash sold different weight loss products, including Pure Garcinia Cambogia and Pure Caralluma Fimbriata Extract. They advertised their products through a host of methods, including banner advertisements and unsolicited spam emails. For instance, Sale Slash created banner advertisements that were posted on websites with proclamations such as “1 Tip for a tiny belly: Cut down on a bit of your belly every day by following this 1 old weird tip” and “Garcinia Cambogia Exposed – Miracle Diet or Scam?” Additionally, Sale Slash hired agents to hack into personal email accounts and send emails that appeared to be from the hacked account. These emails were sent to the account holder’s contact list, containing exclamations like “Hi! [link] Oprah says it’s excellent” and “Hi! It’s incredible! [link].” Recipients could not unsubscribe from future emails.
Those individuals enticed enough to click on the email links and banner advertisements would be taken to fake news websites with URLs like healthconsumerreviews.com. The websites contained supposed news articles which appeared to report objectively on the effectiveness of Sale Slash’s weight loss products. These articles cited a growing body of testimonials where users would lose twenty-eight pounds in five weeks. In fact, the FTC alleged that these articles were actually written by Sale Slash marketers.
The FTC claimed that Sale Slash’s representations that its products result in rapid and substantial weight loss were false, misleading and unsubstantiated. The FTC brought claims of misrepresentation under the FTC Act and alleged violations of the CAN-SPAM Act because of the materially false and misleading emails. During the pendency of the litigation, the court issued a temporary restraining order, freezing Sale Slash’s assets and forcing Sale Slash to turn over financial statements.
In the settlement, Sale Slash neither admitted nor denied any wrongdoing. The U.S. District Court for the Central District of California (Judge Percy Anderson) permanently enjoined Sale Slash from claiming that its products help with weight loss and provide health benefits unless these claims are not misleading and backed by competent and reliable scientific evidence consisting of clinical testing on humans. Further, the court permanently enjoined Sale Slash from misrepresenting that the efficacy of its products were endorsed by celebrities like Oprah Winfrey or verified by objective news reports. Finally, the court permanently enjoined Sale Slash from sending emails that contain misleading information as to the sender and fail to provide an option to unsubscribe from future emails. Sale Slash and other defendants stipulated to pay over $43 million dollars to the FTC as equitable monetary relief.
It looks like Sale Slash will have to tighten its belt after this settlement.