Alleging violations of the Federal Trade Commission Act and the CAN-SPAM Act, the Federal Trade Commission filed suit in Florida federal court against a pair of individuals and their companies in connection with weight loss products they marketed.
Hoping to entice recipients to click on a link leading to websites promoting weight loss products such as Original White Kidney Bean and Original Pure Forskolin, Tachht, Inc. and Teqqi LLC, along with related defendants, paid to have emails sent to consumers from hacked accounts to make it appear as if the messages came from family members or friends, the FTC said. Designed to give the impression of a brief note from a friend, the emails read "Hi! CNN says this is one of the best [link]" and "Hi! Have you already seen it? [link]."
The sites themselves—often styled to look like news sites, with a purportedly independent anchor discussing the products—contained deceptive marketing, the FTC added. False and unsubstantiated claims about the effectiveness of the weight loss products (such as "Burn Fat Quicker Without Dieting or Exercise") were combined with fake testimonials that users lost "4 lbs/week of belly fat" and "41.7 lbs in 2.5 months." The defendants also misrepresented that the products had been featured or endorsed by celebrities including Oprah Winfrey and the hosts of the TV show The Doctors.
To further encourage purchase of the products, the sites would feature messages, like: "ATTENTION: Due to recently being featured on TV we cannot guarantee supply. As of [date website visited] we currently have product IN STOCK and ship within 24 hours of purchase." From the fake news websites, consumers could link to other sites in order to purchase the weight loss products.
According to the complaint, the defendants paid affiliate marketers a commission for each consumer who clicked through from the fake news website to the defendants' website and purchased a product. CAN-SPAM violations occurred because the defendants paid for spam email with deceptive header information and subject lines, the agency said, and they failed to provide an opt-out notice, an effective opt-out mechanism, and a physical postal address as required by the statute.
To read the complaint in FTC v. Tachht, Inc., click here.
Why it matters: The Commission accused the Florida-based defendants of a host of violations, from deceptive advertising claims to false testimonials and endorsements to spam emails. "These defendants used a variety of deceptive tactics to sell their bogus diet pills," Jessica Rich, Director of the FTC's Bureau of Consumer Protection, said in a statement about the case. "But we have a clear message for them—we want their illegal practices to stop and we want to give people back the money they took." The case also serves as a reminder to advertisers that they can be liable for CAN-SPAM violations even where they don't push the "send" button on an email marketing campaign.