Sale Slash, LLC and several other defendants have agreed to pay over $43 million to settle claims that they violated CAN-SPAM and engaged in deceptive practices to sell and advertise weight loss products.
According to the Federal Trade Commission’s (FTC) complaint, the defendants advertised, marketed, and sold various weight loss products in violation of Section 5 of the FTC Act, which prohibits unfair or deceptive commercial practices. The complaint alleges that the defendants falsely claimed that products caused rapid and substantial weight loss.
The FTC further alleged that the defendants created misleading websites containing content that falsely appeared to be objective investigative reports claiming that the product had been tested and resulted in substantial weight loss when in fact the content was paid advertising. The websites also contained false endorsements and testimonials by ordinary consumers as well as certain celebrities who were described as having used the products with successful results.
Finally, the FTC alleged that that the defendants’ spam email campaign violated the CAN-SPAM Act. Specifically, the emails allegedly contained misleading header information and subject headings that suggested the sender of the message was someone the recipient knows, such as a friend or family member. The electronic messages also did not contain an opt-out mechanism. The FTC sought and was awarded injunctive and monetary relief.
TIP: The FTC’s settlement with Sale Slash is notable for a number of reasons, not the least of which is the FTC’s allegation that the emails sent by the defendants violated CAN-SPAM because they contained misleading header information and did not include an opt-out mechanism. This is also a good reminder that “fake news” websites that purport to be objective sources of information but are actually produced by an advertiser are likely to draw the attention of the FTC.