According to the musical “Grease,” some things go together like “rama lama lama ka dinga da dinga dong.” Some other things go together, too. They’re easier to pronounce, but do much more harm to consumers. What do we have in mind?
Bogus weight loss claims and deceptive “free” trial offers.
A lawsuit brought by the FTC and the State of Maine challenges misleading diet promises for AF Plus and Final Trim. But defendants Direct Alternatives, Original Organic, Anthony Dill, and Staci Dill didn’t stop there. The FTC and Maine AG say they ripped a page from the Deceptive Practices Playbook and peddled their products with false consumer endorsements, ad formats that deceptively mimicked PSAs or independent programming, misleading “risk-free” trial offers, undisclosed continuity plans and refund policies, misleading promises about upsells, and unauthorized charges to consumers’ credit cards and bank accounts without express informed consent.
Radio ads for AF Plus asked listeners “Do you want to lose 10 pounds? How about thirty or even fifty pounds?” A purported company spokesperson then claimed, “When we created this once daily weight loss capsule” – described as a “proven breakthrough in weight loss” – “we had no idea it would work THIS well.” Other ads focused on the supposed success story of a user: “Hi, I’m Stacey Howard with AF Plus. I’ve lost a ton of weight with AF Plus, and now you can too.” But according to the FTC and AG, the defendants didn’t have proof the product works. What about “Stacey Howard”? She and her weight loss are fictitious, too.
The Defendants also made what the FTC calls “gut check” claims – weight loss representations that just can’t be true. For example, the defendants’ automated ordering system told consumers that AF Plus “is so powerful, it even works while you sleep!” and “With the metabolism-boosting benefits of AF Plus, you can keep eating your favorite foods and STILL lose pounds and inches – in fact we guarantee it!” Ads for Final Trim made similar claims.
According to the complaint, at least one of the radio ads for AF Plus deceptively implied that it was a public service announcement, citing a Surgeon General’s warning regarding obesity. Another ad led off with “The following message is not a radio commercial. It’s a gift to anyone listening today who needs to lose weight.”
“Gift”? It was the gift that kept on taking. First, the defendants made unauthorized charges to consumers’ credit cards for shipping. They signed people up for automatic continuity plans without their permission, billed their credit cards without authorization, and lured people into upsells with misleading offers of gift cards. According to the complaint, the defendants also set up elaborate hoops people had to jump through to return the unordered products, and then denied requests for refunds. (For example, the defendants required that refund requests had to go through a customer service representative. But the complaint alleges that consumers called and called without a person actually answering.)
The complaint alleges violations of the FTC Act, the Electronic Fund Transfer Act, Reg E, and the Maine Unfair Trade Practices Act. The settlement includes more than $16 million in monetary relief, which will be suspended after the defendants turn over investment accounts, jewelry, furniture, appliances, audio and television equipment, interests in vacation property, snowmobiles, watercraft, the surrender value of insurance policies, and other assets. They’ll be turning over the Rolex, too.
The case suggests three compliance tips for other companies.
- If you're involved in marketing weight loss products, take the FTC's Gut Check Quiz to see if you can spot clearly misleading claims. Make sure you have rock solid science to support the representations you make.
- Not much gets consumers hotter under the collar than unauthorized “what the . . . !?!” charges to their credit cards or withdrawals from their bank accounts. Don’t bill ‘em so much as a nickel without their express informed consent.
- The FTC’s relationship with state law enforcement partners – including the Maine AG’s Office – is evergreen. That’s bad news for chiselers, but great news for consumers.