FTC Concludes Sweep Against Acai Berry Weight-Loss Online Marketers

WASHINGTONMarketers accused of using fake news websites to market acai berry supplements and other weight-loss products have agreed to pay more than $1.6 million under settlement agreements that have been reached with the FTC.

The settlements are significant because they conclude the agency's enforcement actions in 10 separate cases against online marketers that were charged with hawking weight-loss products through phony news websites, the FTC said Thursday.

"The M.O. is to make people think the site and the reporters are part of legitimate and trusted news organizations, name-dropping CNN and Consumer Reports, among others, to add credibility. But the fact is the sites were ads, masquerading as news," writes Amy Herbert, the FTC's Consumer Education Specialist, in a blog Thursday.

The FTC revealed the defendants in the 10 cases and in two other cases against associated affiliated networks collectively agreed to pay around $9.4 million to settle the charges against them.

The most recent settlements with Beony International, its owner Mario Milanovic and an employee Cody Adams each impose a $13 million judgment against them. However, the judgment will be suspended when the defendants pay approximately $1.6 million and sell a 2008 Porsche, the FTC said. But the defendants will be slapped with the $13 million judgment if the government later discovers they provided false financial information.

Under settlements that were reached in a federal court in Illinois, the defendants must clearly disclose when their commercial messages are ads rather than objective journalism. They also are barred from making deceptive claims about any products or services and must reveal any significant connections they have with merchants, the FTC said.

In 2011, federal courts halted a number of operations after the FTC brought lawsuits against various entities who were charged with deceiving consumers into believing certain websites were legitimate news organizations rather than advertisements for weight-loss products.