The Federal Trade Commission has obtained a court order temporarily halting a California operation that allegedly used millions of illegal SPAM emails, along with bogus weight-loss claims and fake, unauthorized endorsements from celebrities like Oprah Winfrey, to market its unproven diet pills.
The court order halts the defendants’ illegal conduct, freezes their assets and appoints a temporary receiver over the corporate defendants. The Commission ultimately is seeking to recover money from the defendants that would be used to provide refunds to consumers who bought the defendants’ diet pills.
The FTC’s complaint alleges that the defendants behind Sale Slash violate the FTC Act and the CAN-SPAM Act. According to the complaint, the defendants used affiliate marketers to send SPAM emails and post banner advertisements online that led consumers to fake news sites designed to appear as if an independent consumer reporter, rather than a paid advertiser, had reviewed and endorsed the products.
The complaint alleges that these fake news sites made misleading and unsubstantiated weight-loss claims and used phony celebrity endorsements to promote the defendants’ diet pills.
“Sale Slash is a fraud trifecta,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The company made outlandish weight-loss claims for its diet pills using fake news sites, phony celebrity endorsements, and millions of unwanted SPAM emails.”
Since 2012, the defendants allegedly have marketed and sold a variety of products nationwide, including supposed weight-loss supplements such as Premium Green Coffee, Pure Garcinia Cambogia, Premium White Kidney Bean Extract, Pure Forskolin Extract and Pure Caralluma Fimbriata Extract.
According to the complaint, the defendants’ affiliates used stolen email user accounts to blast the users’ contacts with spam containing brief messages like: “Breaking news…,” and “Hi! Oprah says it’s excellent,” followed by hyperlinks.
Because the messages were sent to the “contacts” of hacked accounts, they appeared to be coming from a friend or family member instead of defendants’ affiliates. The SPAM often contained no information about how consumers could opt-out of getting future emails.
Sale Slash’s affiliate marketers also placed banner ads making claims like, “1 Tip for a tiny belly,” “Cut down on a bit of your belly every day following this 1 old weird tip,” and “Garcinia Cambogia Exposed – Miracle Diet or Scam?”
This matter further illustrates the importance of issues pertaining to claim substantiation and the proper use of testimonial-style advertising. It should be of particular interest to any company or individual engaging in commercial email marketing or nutraceutical and dietary supplement advertising, including corporate counsel.
Contact an experienced CAN-SPAM lawyer if you are interested in bolstering federal and state commercial email protocols, or discussing the design and implementation of nutraceutical compliance controls.
Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.
