You probably already figured out that the email you received from your colleague gushing about an “incredible” diet pill wasn’t actually from him. And you probably already figured out Internet “news” claims about cutting down on your belly fat every day “by following this 1 old weird tip” are too good to be true. The Federal Trade Commission figured it out too—and recently won a temporary restraining order against the spammers behind it.
Since 2012, Sale Slash, LLC, Purists Choice LLC, Artur Babayan (owner of Sale Slash and Purists Choice) and Vahe Haroutounian (doing business as Prisma Profits) have sold purported weight loss products under a variety of names, such as Premium Green Coffee and Premium White Kidney Bean Extract. Their tactics included making up fake celebrity endorsements and trying to pass off their marketing sites as legitimate, independent news articles about how great the weight-loss products were. The fake news sites made claims like “Rapid Belly Melt without diet or exercise.” (I’ve seen those and I didn’t believe them either.)
But even worse, the spammers also routinely stole and hacked consumer email accounts and sent emails, which appeared to be sent by the hacked sender, raving about the products. Those emails included links back to the fake news sites, from which consumers could link to product purchase pages.
On April 27, the FTC filed suit in a California federal court for violations of the FTC Act and the CAN-SPAM Act against the “fraud trifecta,” as FTC Bureau of Consumer Protection Director Jessica Rich called them. The FTC alleged the defendants’ misrepresentations about the nature of the products and claims celebrities like Oprah Winfrey endorsed them violated the FTC Act’s prohibition of “unfair or deceptive acts or practices in or affecting commerce” “for the purpose of inducing … the purchase of food [or] drugs.”
The FTC also claimed the spam email violated the CAN-SPAM Act, which states “[i]t is unlawful for any person to initiate the transmission to a protected computer, of a commercial electronic mail message … that contains, or is accompanied by, header information that is materially false or materially misleading.” Other violations of the Act included failure to include an opt-out mechanism or disclosure that the email was an advertisement.
The Court agreed, at least initially, with the FTC’s claims and entered a temporary restraining order against the spammers. The order requires them to stop their conduct, freezes their assets, and appoints a receiver over the entities. Sounds like the spammers’ business model—like their weight loss claims—was also too good to be true.