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Friday, December 13, 2019

Consumers to receive $3.5 million as part of FTC settlement with company promoting weight loss

Federal Gov

By Marian Johns | Feb 20, 2019

Law money 06

WASHINGTON, D.C. — The Federal Trade Commission (FTC) and the Maine Attorney General's Office have reached settlements with two companies who both falsely marketed weight loss supplements that will result in nearly $3.5 million in refunds going to consumers affected by the alleged scam. 

According to the FTC, Maine-based Direct Alternatives and Original Organics LLC, along with their owners, sold more than $16 million in supplements that they deceptively marketed as "proven"  to aid in the quick, easy loss of a certain amount of weight.  The companies also used "risk-free" trials to scam consumers through which they automatically enrolled customers in and then charged them for additional products each month, the FTC alleges. 

As part of the settlement agreement, the defendants are prohibited from using any claims that their dietary products "cause rapid or substantial weight loss" or from using claims their products "cause a certain amount of weight loss over a certain period." In addition, the defendants are prohibited from using "free trial" offers and invoicing customers without consent. Both companies will liquidate a certain amount of assets to go toward customer refunds, according to the FTC. 

Direct Alternatives' advertising agency Marketing Architects Inc., which created some of the alleged weight loss advertising, will also pay $2 million to go toward customer refunds, the FTC said. 

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Organizations in this Story

Maine Office of the Attorney GeneralU.S. Federal Trade Commission

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