Ad agency to pay $2 million for role in deceptive weight loss and “free” offers

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We haven’t tried bullhorns or signal flares yet, but aside from that, it’s tough to imagine a tactic the FTC hasn’t taken to warn businesses about the risks of involving themselves in deceptive weight loss promotions. Add to that list of fair warnings the $2 million judgment announced by the FTC and the Maine AG against Marketing Architects, an ad agency that created and disseminated radio ads for diet products pitched with a host of allegedly misleading claims and practices.

In 2016, the FTC and the Maine AG settled a lawsuit against Portland-based Direct Alternatives and its principles, Anthony Dill and Staci Dill. The defendants in that case raked in millions by selling purported weight loss products Puranol, Pur-Hoodia Plus, PH Plus, Acai Fresh, AF Plus, and Final Trim. But they didn’t do it alone.

Direct Alternatives hired Minneapolis-based Marketing Architects to create radio ads for its diet supplements. In addition, Marketing Architects provided interactive voice response telemarketing support for sales. (IVR is an automated computer system that lets consumers place orders without actually interacting with an operator.)

The radio ads produced by Marketing Architects promised dramatic results. For example, one product was touted as “so powerful, it even works while you sleep!” The ads also claimed, “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!” and “This product is proven and can cause dramatic weight loss.” Other ads featured testimonials from purported consumers: “In six months of taking Puranol, I’ve already lost 30 pounds,” “I went from a 14 to a size 10 . . . without feeling hungry!” and “I’ve lost a ton of weight with AF Plus, and now you can too.”

We won’t keep you in suspense. The FTC and Maine AG allege that the dramatic weight loss claims weren’t supported by science. As for those satisfied customers, both the characters and their results were fictitious.

According to the complaint, it was no surprise to Marketing Architects that those astonishing pound-shedding representations were false or unsubstantiated. Marketing Architects also was involved in the promotion of Sensa, another diet product that resulted in a $26.5 million FTC settlement for consumers. As part of the settlement, the Sensa defendants had to give Marketing Architects a copy of the order in that case, further proof of the FTC’s concern about unproven diet products and the need for marketers to have sound science to support weight loss claims. Concerns came from another source, too. You’ll want to read the complaint for the details, but the FTC and the Maine AG allege that over the years, Direct Alternatives had shared with Marketing Architects comments from its attorney that certain claims in the ads – including “burn fat” and “lose inches” – were “particularly risky” and would require substantiation.

In addition, the lawsuit challenges the format Marketing Architects used in the ads as deceptive. One radio spot appeared to be a “health news” report. Another one sounded like a public service announcement about the obesity epidemic. A third claimed, “The following message is not a radio commercial.”

Other allegedly misleading practices relate to the marketing of “risk free” offers for Direct Alternatives’ products and “absolutely free” offers Marketing Architects created on behalf of other companies. The complaint alleges that Marketing Architect’s IVR scripts failed to adequately disclose that consumers responding to those offers would be signed up for continuity programs that would send them unordered products – with accompanying unauthorized credit card charges – month after month.

In addition to the $2 million judgment, the proposed order in the case prohibits Marketing Architects from making any of the seven “gut check” claims – clearly false promises of easy weight loss. The company will need clinical testing to support other weight loss claims. The order also puts protections in place to prevent Marketing Architects from engaging in an array of misleading practices related to advertising format, the use of testimonials, “free” trials, and automatic shipment programs. (For example, the order requires mandatory disclosures about the terms of “free” offers and the actual cost of negative options.)

What’s the word for other advertisers and ad agencies?

Relying on a “But we’re not the advertiser!” defense is a dubious strategy.  Advertising substantiation isn’t somebody else’s job. Companies that participate in creating advertising similar to the services Marketing Architects offered in this case have a duty to ask about the scientific basis for health claims. It’s especially important to heed reasonable warnings that an ad claim or business practice is deceptive. Given the potential breadth of liability under federal and state consumer protection laws, the ostrich approach is unwise.

Ads promising fast, easy weight loss are invitations to investigate.  If you make weight loss claims or provide marketing services to companies that do, the FTC has a century-long record of challenging misleading representations. Consider the claims consumers are likely to take from the ad and make sure those promises are backed by solid science. Companies looking for a legal refresher can start with the FTC’s “gut check” tutorial and move on to how FTC cases apply requirements like “competent and reliable scientific evidence.”

The fastest way to arouse consumer ire: Charge their credit cards without express authorization.  Have you spoken to consumers victimized by deceptive “free” offers or inadequately disclosed automatic shipment programs? We have and we’ve learned to hold the receiver a few inches away from our ear. People get angry – and justifiably so –when mystery charges show up on their credit cards. Our message to consumers is to report unauthorized charges to the FTC or their State AG. Our message to advertisers and ad agencies that engage in shipment shenanigans is to cut it out now.
 

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