FTC Shuts Down Fake Weight-Loss Scam and Imposes 1.3 Million USD Fine

Society has somewhat of an obsession with quick weight-loss schemes. You cannot watch television, read a newspaper or browse the Internet without being exposed to some advertisement about how you can lose a ton of weight and fulfill all of your dreams if only you buy and eat this or that “miracle” weight-loss supplement. In reality, most of them probably do not work and some of them might be very harmful. You also do not really know what is in those pills, simply because they are often sold by unreliable quacks.

The Federal Trade Commission (FTC) is a U. S. consumer protection agency that was founded by Woodrow Wilson in the early 1900s. They work tirelessly to crack down on false marketing, frauds, identity theft, deceptive trade practices, coercive monopolies and many other things that ultimately harm consumers. Because the supplement industry in the United States has very little regulation in terms of safety and efficacy of their products, regulators have to go after scams and frauds via false and misleading marketing and other law violations. It is hardly an optimal situation, but they have managed to make some headway by holding homeopathic over-the-counter (OTC) products to the same standard as other OTC products.

Now, the FTC has settled a case against a weight-loss scam that used fake news websites and fake celebrity endorsements. The defendants must pay 500 000 USD and face the threat of paying a total of 1.3 million USD if they do not stop with their illegal and deceptive activities.

What was the weight-loss scam and who was behind it?

The scam involved selling two weight-loss supplements called “Original Pure Forskolin” and “Original White Kidney Bean”. According to FTC documents, the people behind it were Colby Fox and another person (for which the legal process is still ongoing). They used two companies called Tachht, Inc. and Teqqi, LLC. to carry out their nefarious deception. Fox was the owner and officer of both companies, whereas the second person was the manager of the latter.

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The people behind the scam set up their webshop to sell products, then they paid affiliate markers to set up a fake news website that presented advertisements for the fake weight-loss supplements as if they were legitimate news articles. These news articles contained numerous false claims about the products. They claimed that it could make you to lose ~7.7 kg in four weeks, that the product was endorsed by Oprah and the television series The Doctors, that it was supported by scientific evidence and that it was approved by the U. S. Food and Drug Administration (FDA).

Then the affiliate marketers used compromised email accounts to send millions of spam emails to people pretending to be their friends and relatives and linking to this deceptive fake news website. The defendants paid the affiliate marketers every time the ads were clicked and products bought.

In June of 2016, the FTC submitted a complaint that ended up being settled. The settlement was signed by the judge on March 3, 2017.

What where the consequences for the defendants?

The settlement clearly shows that the FTC almost completely crushed the defendants. The settlement ordered them to do the following:

Pay 500 000 USD: if they pay this amount, the full sum of 1.3 million USD will be partially suspended. If they do not, they will have to pay the full sum. If they are latter found to continue to scam, they will have to pay the full sum. This is probably a hefty sum to have hanging over your head and will hopefully deter them from continuing their deceitful activities.

No more fake “evidence” the defendants cannot claim that scientific studies show efficacy when there are no such studies.

No more spam: they must closely monitor their affiliate marketers in specified ways and they are not allowed to spam people anymore.

No more fake news: they are not allowed to create or contribute to creating advertisement that masquerade as fake news stories.

No more fake celebrity endorsement: they are not allowed to claim that celebrities endorse their weight-loss products when this is untrue.

No more misleading testimonials: they are not allowed to give the appearance that testimonials represent the average effect for customers.

No more lies about FDA approval: they are not allowed to claim that their products have been approved by the U. S. Food and Drug Administration when they clearly have not been. That the defendants claimed that they had FDA approval is somewhat peculiar, since many promoters of quack products write a so-called quack Miranda warning that explicitly states that the products are not approved by the FDA and are not intended to diagnose or treat anything.

No more trickery with total costs or refunds: the defendants were also found to engage in deceptive strategies with regards to total cost paid by the consumer and terms related to refunds and cancellations.

Conclusion

This is yet another victory for science-based medicine and consumer protection. Another weight-loss scam has been effectively taken down and the people behind it has suffered a substantial economic loss. If they do not quit with their activities, they face an even larger economic loss. The cynic will point to the other thousands and thousands of similar scams being run all across the United States and the world, but fighting pseudoscience and quackery is an endless struggle, so we must celebrate all victories and progress, no matter how small it seems on the surface.