Three affiliate marketers agreed to stop using spam e-mail, refrain from making false weight loss claims, and halt the use of fake celebrity endorsements as part of a settlement agreement with the Federal Trade Commission.
According to the agency, the affiliate marketers were paid to send "millions" of illegal spam e-mails from hacked accounts to make it appear the messages came from friends or family members. Links in the messages took recipients to websites that made deceptive claims for weight loss products—including Original Pure Forskolin and Original White Kidney Bean—that they could yield weight loss of 17 pounds in 4 weeks, for example, or "41.7 lbs in 2.5 months."
The websites also featured endorsements from celebrities such as Oprah and the cast of the television show The Doctors, even though the purported endorsers had no affiliation with the products, the agency alleged. From these websites, consumers could use another link to purchase the defendants' weight loss products. Affiliate marketers were paid a commission when a consumer clicked through the website to purchase a supplement, the FTC said.
To settle the charges, the defendants agreed to prohibitions on their prior activity and will pay $500,000, suspended from a judgment of $1.3 million for their alleged violations of both the Federal Trade Commission Act and the CAN-SPAM Act.
Specifically, the stipulated order prohibits the defendants from making the false weight loss claims alleged in the complaint and requires that they obtain competent and reliable scientific evidence to support any health or efficacy claims made in the future. False representations that any health claims have been approved by the Food and Drug Administration are likewise banned and all scientific evidence used to support health claims must be preserved.
The order also prohibits false endorsements, mandates that testimonials reflect typical consumer experience with the product, and prohibits a range of misrepresentations (such as cost and claims related to refunds or cancellation terms) as well as future violations of CAN-SPAM.
To read the complaint and the stipulated order in FTC v. Tachht, Inc., click here.
Why it matters: The action demonstrates the FTC's continued enforcement focus on health-related claims as well as false endorsements, deceptive weight loss advertising, and spam e-mail.