FTC Settles Acai Berry Consumer Fraud Lawsuit

The U.S. Federal Trade Commission (FTC) is cracking down on companies making bogus claims that their Acai berry product can help with weight loss, offering “free trials” to consumers, and then charging their debit/credit accounts without authorization and refusing to give refunds.

The $80 million judgment against several companies involved in this scheme will be suspended when the defendants pay $1.5 million in personal assets. This will force Graham D. Gibson, CEO of Central Coast Nutraceuticals, to mortgage his $500,000 home in Phoenix, Arizona, and sell his interest in a Hawaiian vacation property. In addition, the remaining $600,000 in the accounts of Central Coast will be transferred to the FTC. If it is later determined that the company has more money than it reported to the FTC, it will be required to pay the full $80 million judgment.

The $1.5 million paid to the FTC will then be available to consumers who want a refund.

The FTC complaint alleged that two defendants and several third-party companies were involved in a scheme in which Acai Pure was marketed as a weight-loss supplement that would cause rapid and substantial weight loss. They also marketed Colotex colon cleanser as way to prevent colon cancer. These claims were unsubstantiated by scientific evidence or clinical trials. Federal law bans the advertising of products with medical benefits unless such claims are backed up by scientific trials.

The companies and individuals involved in the judgment hired firms to create fake “news sites” on the internet that promoted the weight-loss benefits of Acai. They also offered “free trials” and “introductory offers,” in which consumers paid nothing up front, but were automatically charged between $40-60. It was nearly impossible to avoid paying full price for the products without canceling the shipment or immediately returning the product.

The Better Business Bureau was flooded with complaints from consumers who were charged for these products without their consent, prompting the agency to include the acai supplements as one of the “Top 10 Scams and Rip-Offs of 2009.”

There is no clinical, scientific evidence that acai berry dietary supplements can help with weight loss. They do have a lot of antioxidants, which some research has linked to a variety of health benefits. The research is still preliminary, and consumers should be skeptical of any dietary supplement that claims it can treat, cure, or prevent a disease. Talk to your doctor before you start taking any medication. Despite what you may hear in popular media, there are no “quick and easy” ways to lose weight or cure diseases.