January 27, 2012 — Hopefully, consumers can expect to see fewer “fake news” websites from now on. The U.S. Federal Trade Commission (FTC) is cracking down on companies engaged in fraudulent, deceptive internet marking practices. Six companies who created fake “news sites” to promote Acai Berry weight-loss supplements have agreed to settle with the FTC and halt their advertising practices. Four more lawsuit are currently pending.
The FTC accuses the men of running fake news sites. When prospective customers were lured onto the sites, they appeared to be objective journalism. Some articles appeared to be written by reporters who were skeptical of the Acai weight-loss claims, but once they tried the product, they experienced miraculous weight-loss without altering their diet or lifestyle.
All six websites have since been taken off the internet.
The companies behind the marketing scheme also spent millions of dollars to buy ad space on reputable sites. When people clicked on the ads, they were taken to the company’s fake “news sites,” where interested customers could then click on commercial sites to buy the Acai weight-loss products. The supplements cost between $70-100 for a supply of diet pills.
Most of the FTC judgment against the men involved in the scheme will be suspended when the agency receives personal financial assets. Because the men violated federal law, they will be required to pay around $500,000 to the FTC. The men who agreed to settle are: Ricardo Jose Labra in Michigan; Zachary S. Graham in Minnesota; Tanner Garrett Vaughn in Washington State; Thou Lee in Minnesota; Carles Dunlevy in Pennsylvania; and Michael Volozin in New York.
The settlement will also require that if the men operate any more “news sites” in the future, they must make it clear when their commercial messages are advertisements so consumers are not misled into believing that they are reading objective journalism on the internet. The men will also be banned from making misleading claims regarding health products and the benefits of dietary supplements.
The action against the individuals involved in the “news sites” follows FTC action against Central Coast Nutraceuticals, which sold Acai berry weight-loss supplements. The company offered “free trials,” but it was nearly impossible not to pay full price once a consumer provided billing information. The Better Business Bureau was flooded with complaints from consumers who had been victims of the scam. An $80 million judgment against Central Coast was suspended when the CEO was forced to pay $1.5 million in person assets to a fund where consumers could then get a refund.
What is Acai?
Acai berries are a dark purple fruit found on a 60-foot species of palm from Central and South America. Some believe that the fruit may have beneficial health properties. However, there is no scientific evidence that the products can help a person lose weight. In fact, there is no scientific evidence linking the acai berry to any health claims, though the products are marketed to treat everything from diabetes to sexual dysfunction.
The Acai products were marketed as “Oprah’s favorite diet secret!” In 2004, there were only four Acai berry products. In 2008, the number had skyrocketed to 53. Profits from acai products exceeded $106 million in 2008. Though the berry does contain antioxidents (molecules that can slow damage caused by the oxidation of other substances in the body) there is no scientific evidence linking the products to weight loss, wrinkle reduction, detoxification, and more. Many of the advertisements claimed Oprah Winfrey and Rachel Ray advocated acai products, but the women did not endorse the advertisements.
There have only been a few small studies of the Acai berry in humans. One study involved 12 fasting volunteers who consumed one serving of Acai juice or pulp. The patients showed a short-term increase in the antioxidant capacity of the volunteers’ blood. The study only looked at the immediate effect of consuming Acai.
The 12-person sample size in the study was small, and it would be hard to make a valid long-term health claim (like weight loss or improved health) based on this short-term outcome.