Maybe we’ll finally get rid of all the deceptive Internet ads for acai berry supplements featuring phony endorsements attributed to Oprah and Rachael Ray. Maybe people will save their money and not put their faith in a tiny purple Brazilian berry.
The Federal Trade Commission announced today that it has filed a lawsuit against Central Coast Nutraceuticals, a Phoenix-based company that markets acai berry weight loss supplements and colon cleansers. The agency announced the lawsuit in Chicago today and a U.S. district court has ordered a temporary halt on the Internet sales scheme that allegedly scammed consumers out of $30 million or more in 2009 alone through deceptive advertising and unfair billing practices. The FTC will seek a permanent prohibition.
Since 2007, victimized consumers have flooded law enforcement agencies and the Better Business Bureau with more than 2,800 complaints about the company, according to the FTC. Last year, the Better Business Bureau named fake “free” trial offers – including those for acai supplements offered by the defendants in this case – as one of the “Top 10 Scams and Rip Offs of 2009.”
“Too many ‘free’ offers come with strings attached,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “In this case, the defendants promised buyers a ‘risk free’ trial and then illegally billed their credit cards again and again – and again. We estimate that about a million people have fallen victim to this scam. As if that weren’t enough, there were fake endorsements from celebrities like Oprah Winfrey and Rachael Ray for a product that didn’t work in the first place.”
The FTC charged Central Coast Nutraceuticals, Inc. two individuals (Graham D. Gibson and Michael McKenzy) and four related companies with multiple violations, including deceptively advertising AcaiPure, an acai berry supplement, as a weight-loss product, and Colopure, a colon cleansing supplement, as an aid for preventing cancer. The companies affiliated with Central Coast Nutraceuticals are iLife Health and Wellness LLC; Simply Naturals LLC; Health and Beauty Solutions LLC and Fit for Life LLC.
The FTC complaint alleges that to sell AcaiPure, the marketers made dramatic claims on their website, including:
“WARNING! AcaiPure Is Fast Weight Loss That Works. It Was Not Created For Those People Who Only Want To Lose A Few Measly Pounds. AcaiPure was created to help you achieve the incredible body you have always wanted …USE WITH CAUTION! Major weight loss in short periods of time may occur.”
In pitching Colopure, the defendants cited frightening statistics about colon cancer, while promising that their product would get rid of consumers’ “excess weight and toxic buildup.”
The marketers also deceived consumers about their purported “free” or “risk free” trial offers, and about the charges and refund terms consumers could expect, according to the FTC’s complaint. The FTC also alleges that the marketers made numerous additional unauthorized charges to consumers’ credit and debit card accounts.
The alleged deceptive practices include:
- Falsely claiming that using AcaiPure could lead to rapid and substantial weight loss. Consumers were told that “[m]ost consumers taking AcaiPure report weight loss anywhere from 10-25 pounds in the first month.”
- Making unproven claims that AcaiPure’s weight-loss claims are backed by “double-blind, placebo-controlled weight loss studies.”
- Deceptively claiming that Colopure could help prevent colon cancer because it would “cleanse your entire system,” “detoxify your organs,” and break down and remove “toxic waste matter which may have been stuck in the folds and wrinkles of your digestive system for years and years.”
- Falsely claiming that celebrities including Oprah Winfrey and Rachael Ray have endorsed products marketed by Central Coast Nutraceuticals, Inc. In marketing AcaiPure, the defendants declared on their homepage, “Acai Berry rated #1 SUPERFOOD by Rachael Ray.” A photo of Oprah appeared on the homepage, next to a quote that read in part, “Studies have shown that this little berry is one of the most nutritious and powerful foods in the world!” In fact, in declarations to the FTC, both celebrities denied endorsing AcaiPure.
- Deceptively claiming that the marketers will provide full refunds to all consumers who request them, and that consumers who paid a nominal fee for a “free” trial supply of supplements would incur no risks or obligations. In fact, many consumers found it all but impossible to avoid paying full price for the products, typically $39.95 to $59.95.
- Failing to adequately disclose that consumers would be automatically enrolled in a membership program and charged for additional monthly supplies of a product.
- Failing to adequately disclose that consumers would be automatically charged for items other than the trial product unless they opted out.
- Failing to adequately disclose the terms and conditions of trial programs, membership programs, and additional charges.
- Making numerous unauthorized charges to consumers’ credit and debit card accounts.
- Debiting consumers’ bank accounts on an automatic, recurring basis, without obtaining proper preauthorization. The unauthorized debits violated the FTC Act as well as the Electronic Fund Transfer Act and Regulation E, according to the complaint.
NOTE: The Commission files a complaint when it has reason to believe that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.
I’ve been concerned about the aggressive, misleading acai ads for quite some time. Maybe you remember my previous posts, including Dirty Dealings of a Brazilian Berry. So I was thrilled to see this action today by the FTC. It’s a drop in the bucket — so many other supplements are making outrageous claims. But it was a little victory and I’ll take that.