Federal Trade Commission says defendants claimed all-star roster of genius endorsers
The Frightful Four
Xcel, EVO, Geniux and Ion-Z: Sounds like a league of evil supervillains, right?
Well, according to the Federal Trade Commission (FTC), it’s an apt simile.
These cognitive diet supplement products were, according to a recent FTC complaint, marketed under a number of false claims – some of which sound like superpowers. For $47-$57 per bottle, the products were supposed to “boost brain power,” “increase focus,” “enhance memory” and “skyrocket concentration,” among numerous other promises.
The culprit of the FTC’s suit was a large group of interrelated entities including holding companies, merchants, fulfillment companies, a payment processor, an advertiser and a handful of individuals accused of managing them.
But they weren’t just accused of making superpowered claims without actual clinical backing (although they allegedly claimed, “that the Geniux Products have been tested in human clinical trials, including over 2,000 trials conducted by the Nottingham Clinical Trials Unit.”)
The FTC also accused the Geniux defendants of using false endorsements to hawk the supplements (including fake plaudits by comedian and podcaster Joe Rogan) and marshaling affiliate marketers to create internet and email campaigns that mimicked legitimate news sites.
To turn it up a notch, the defendants allegedly used the personae of real luminaries to “anchor” these ads – in the FTC’s complaint, one website allegedly “claimed that CNN reporter Anderson Cooper took Geniux for a fourteen-day trial, reporting that ‘Geniux is the real deal. The increase in focus, creativity and overall mental performance was a little bit scary to be honest – I felt like a different person.’”
The rest of the Geniux endorsement roster was equally ambitious, the complaint noted, attributing “dramatic results or achievements to others,” including celebrity scientists and entrepreneurs such as Stephen Hawking, Bill Gates, Elon Musk and – wait for it – Kanye West … suggesting endorsement of Geniux Products.
The FTC’s complaint referred to false refund and risk-free claims, false advertising claims through consumer endorsers, false establishments, false product claims, and other misrepresentations.
There’s no special twist to end this story – the defendants settled the same day as the complaint through two separate orders (see here and here) barring the defendants from making similar product claims in the future, making false endorsements and other disclosures. The two orders differed only in terms of the amounts of the fines levied against the two subsets of defendants – between them, in the aggregate, on the hook for $25 million.
Although we continue to see these false endorsement and false refund and risk-free claims for products sold to consumers, and businesses employing these marketing tactics to lure new potential customers into purchasing their products and securing additional business from unknowing buyers, reputable companies avoid such techniques. However, all companies should exercise caution in the marketing of their “revolutionary” products and be certain to substantiate all claims, testing and endorsements through methods approved by the FTC, lest they wish to have an FTC complaint and subsequent consent decree.