January 27, 2012 — Perhaps now there will be fewer fake “news sites” on the internet promoting expensive products that don’t work. The U.S. Federal Trade Commission (FTC) is forcing six men to pay around $500,000 because they ran deceptive “news sites” promoting Acai berry weight-loss products. The websites have been taken off the internet and the men have agreed to halt their misleading advertising practices. This case follows FTC action against another Acai berry weight-loss company, Central Coast Nutraceuticals. Four more lawsuits are still pending.
The six men are accused of running fake “news sites” intended to promote Acai berry weight-loss products. The men ran advertisements on other reputable websites, drawing unwitting consumers to their websites. The sites appeared to provide objective journalism. The sites had articles from reporters who were skeptical of the weight-loss claims at first, but once they tried the products, they experienced miraculous weight-loss without exercising or making changes to their diet. Consumers who were duped by the articles were then directed to a merchant website where they could buy the Acai weight-loss products for $70-100 per supply.
A significant amount of the financial settlement against the men will be suspended when the men pay around $500,000 in personal assets. The six men involved in the settlement are: Ricardo Jose Labra in Michigan; Zachary S. Graham in Minnesota; Tanner Garrett Vaughn in Washington State; Thou Lee in Minnesota; Carles Dunlevy in Pennsylvania; and Michael Volozin in New York.
The men have also agreed to halt their deceptive advertising practices. If they decide to run any more “news sites” in the future, they must clearly disclose that they are making commercial claims, not journalistic claims. The FTC has also banned the men from making deceptive or misleading claims while they are advertising products for health benefits.
The latest FTC action in the Acai berry weight-loss scandal follows a crack-down on Central Coast Nutraceuticals, a company that sold Acai berry weight-loss supplements and offered consumers a “free trial” or “introductory trial.” Once a consumer provided billing information, it was nearly impossible not to be charged the full amount for the Acai products. Consumers also found it difficult to stop repeat charges on their credit cards for the Acai products.
After the scam, the Better Business Bureau was flooded with complaints from people who had tried to receive a refund but were unsuccessful. After the FTC settled with the CEO of Central Coast, they forced him to pay $1.5 million in person assets, which went into a fund where consumers could then receive a refund.
What is Acai?
The Acai berry is the fruit of a type of 60-foot palm tree that grows in Central America and South America, particularly Brazil. Since the mid-2000s, the fruit has been marketed as a wonder-fruit that has significant health benefits. Acai fruit juices and Acai pulp has been marketed for everything from weight loss, to treating diabetes, to improving sexual function.
There is no scientific evidence linking Acai to any long-term health benefit.
Most of the health claims derive from the fact that the Acai berries are high in antioxidents. Antioxidents are molecules that can slow damage that is caused by the oxidation of other substances in the body. There have been very few studies of the Acai berry in humans. The study of antioxident-boosting properties of Acai was based on a 12-person study. The 12 volunteers fasted, and then drank a single dose of Acai juice or pulp. In a blood test, the patients showed a short-term increase in the antioxident capacity of their blood. The effect was no more significant than many other common fruits.
Acai berry products have been aggressively marketed since their introduction in the mid-2000s. In 2004, there were only four Acai berry products available in the U.S. By 2008, however, the berry had become a fad, and there were more than 53 Acai berry products. In 2008, profits exceeded $106 million. You may remember advertisements claiming that Oprah Winfrey and Rachel Ray advocated Acai. In reality, the women never endorsed Acai.
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