Supplement Marketers Ordered to Pay $70 Million in Consumer Redress

BOSTONMarketers of two dietary supplements were ordered by a federal district court to pay nearly $70 million in consumer redress, after the companies challenged FTCs ruling regarding marketing claims about the safety and effectiveness of the Supreme Greens and Coral Calcium products.

FTC initially charged Donald W. Barrett and Robert Maihos, and their companies Direct Marketing Concepts Inc. and ITV Direct Inc., with making deceptive and unlawful claims about the ability of the dietary supplements to treat, cure or prevent serious diseases including cancer, heart disease, diabetes and arthritis. Claims at issue also related to the products bioavailability compared to similar products and the amount of substantiation and research on the products. Three other defendants, Allen Stern and two companies he controls, were also charged specifically with deceptively marketing Coral Calcium.

In the Aug. 27, 2009, ruling from Judge George OToole, U.S. District Court, District of Massachusetts, the court barred all defendants from making deceptive claims about the cited products and making any unsubstantiated claims for any product. Barrett, Maihos and their companies assets were frozen, and they were ordered to pay $48.2 million for consumer refunds; they were also barred from billing consumers or charging credit cards on an ongoing basis with consumer consent. Stern and his firms were ordered to pay $20.4 million in consumer redress.