The FTC has reached a settlement with another acai berry affiliate network for allegedly deceiving customers through "fake news" sites extolling the virtues of acai berry weight-loss products. The Clickbooth affiliate network has agreed to pay $2 million, all of which will be set aside for consumer refunds by the FTC. According to the FTC's complaint, sellers of the acai berry products pay Clickbooth to market consumers through a network of affiliate marketers. The affiliate marketers advertise the products online using domain names evocative of news sites, such as channel5healthnews.com, containing fake news reports with titles such as "1 Trick of a Tiny Belly: Reporter Loses Her 'Belly' Using 1 Easy Tip." These sites contained claims that objective reporters have performed independent tests demonstrating the products' effectiveness and included comments following the articles that expressed positive consumer opinions regarding the products. In truth, both the objective reports and consumer testimonials were concocted by the marketers without adequate substantiation for the claims. In addition to the deceptive advertising claims, the FTC also claimed that the defendants duped consumers by failing to disclose adequately that purchasers who signed up to receive a trial supply of the products were: (1) charged if they did not return the product within a certain period of time and (2) automatically enrolled in a continuity program for the products, requiring the consumer to cancel the program to avoid additional recurring shipments and charges.
TIP: Marketers should use caution when using news reporting in connection with the promotion of their products, and ensure that they do not do so in a deceptive manner. In some cases, having disclosures at the bottom of a page in fine print may not be enough to overcome allegations of deception. In addition, companies should be sure to include adequate and appropriate disclosures for "negative option" programs.