FTC Launches Another Attack on Acai Weight-Loss Claims

CHICAGOFTC charged another group of acai berry marketers for using deceptive  claims on fake news sites promoting weight loss supplements. The Coleadium Inc. affiliate network, which uses the name Ads4Dough," and its owner will pay $1 million to settle charges.

FTCs complaint against California-based Coleadium and its owner, Jason Akatiff, alleged they acted as intermediaries between online merchants who sold the weight-loss products and the affiliate marketers who used websites designed to look like objective news reports to promote acai and colon cleanse products and draw consumers to the merchants sites. 

The products advertised included the acai berry supplements AcaiOptimum, AcaiBurn-Force Max, Acai Tropic, Acai Fit and Acai Elite Blast; as well as the colon cleansers Natura Cleanse, Smart Colon Flush, Advanced Colon Max and Colo Flush.

According to the FTC, in addition to misleading consumers about the effectiveness of the supposed weight-loss products, the marketers recruited by the defendants also promoted free trials" of the products, in which consumers were tricked into signing up for additional shipments of products and were billed monthly.

Coleadium and Akatiff allegedly assembled a network of affiliate marketers, approved the affiliates to market the products, monitored the traffic the affiliates generated through fake news sites and paid the affiliates commissions based on the traffic generated. 

Under the settlement order, in addition to paying $1 million to FTC, Coleadium and Akatiff are barred from making any material deceptive representations, including deceptive claims about weight loss and health, and about relevant studies, tests and research.

They now must also disclose:

Also under the settlement, the defendants must obtain adequate information about the affiliate marketers they hire, provide the affiliate marketers with a copy of the settlement order, monitor all their affiliate marketers who are selling any good or service, promptly review and approve the affiliate marketers advertisements, immediately stop the processing of payments generated by any affiliate marketer using deceptive advertisements and terminate any affiliate marketer engaged in such conduct.

This is the second round of charges FTC had brought against acai markerters. In April 2011, FTC filed 10 cases against fake news site operators.  Eight have been resolved, with the defendants paying collectively more than $2 million.  Phoenix-based Central Coast Nutraceuticals Inc. was ordered to pay $1.5 million as part of the settlement.One of those news site operators, Intermark Communications Inc., doing business as Copeac, also ran an affiliate network.

Learn what claims won't be halted by FTC in the SupplySide West education session,  "Truthfully Advertising Your Dietary Supplements: Advertising Claims, Evidence and Self-Regulation" at noon to 12:50 p.m. on Wed., Nov. 7, with speakers Rend Al-Mondhiry, Esq., regulatory counsel, Council for Responsible Nutrition (CRN); and Kathleen Dunnigan, Esq., senior staff attorney, National Advertising Division, Council for Better Business Bureaus.