Sales of Weight Loss Internet Company Halted by FTC
Internet sales and marketing by Central Coast Nutraceuticals Inc. of supplements containing acai berry and colon cleansers were halted by a temporary injunction that was obtained by the Federal Trade Commission on Monday.
In Chicago, the FTC said that an Internet sales scheme that was allegedly perpetrated by the company Central Coast sold products to consumers who were duped out of over $30 million in 2009.
Around 1 million consumers were targeted according to a statement given by the director of the FTC's Bureau of Consumer Protection, David Vladeck.
Interestingly, Central Coast officials, at the Phoenix based company, could not be reached.
Assets Frozen
The company's assets have been frozen under the temporary injunction, A temporary receiver has been appointed to preside over the four affiliated companies of Central Coast, the FTC added.
Central Coast along with two individuals who are associated with the company have been accused by the FTC in its suit that is seeking the injunction, of engaging in unfair billing practices and deceptive advertising. According to the FTC, the company made deceptive claims in advertisements that using their acai berry supplements would lead to substantial and quick weight loss.
They also claimed that their colon cleansers could help to prevent colon cancer. Some of the company's advertisements also falsely claimed that their products were endorsed by top celebrities Oprah Winfrey and Rachael Ray.
The FTC will request a permanent injunction in the hearing on Friday in the Chicago federal court.
How the Scheme Worked
There has been plenty of speculation over this news, but for your information, the scheme worked as follows:
- A consumers signs up for a "free" trial of a colon-cleansing product or acai berry weight loss supplement.
- The consumers is then asked to provide their credit or debit card number so that a minimal shipping fee can be processed. The consume is then billed for the full price of their "free" trial products. The prices were typically $39.95 to $59.95.
- The credit or debit card number provided by the consumer is then automatically charged for membership enrollments and fees.
According to the FTC, the company terms and conditions were in such small type that they could barely be seen on the consumer's computer screen.
The takeaway from all of this is that no matter how much the authorities try to protect citizens from falling victim to certain schemes, ultimately the onus is on the consumer to thoroughly investigate any product or service before enterting into an agreement or purchasing a product. Be vigilent and stay safe!
[BACK TO TOP]
Posted on Tue, 17 Aug 2010 in News | 2 Comments
2 thoughts on "Sales of Weight Loss Internet Company Halted by FTC"
Jeremy says:
I don't trust any company that says they have a weight loss pill that will make all your fat go away like magic when you buy their product. There's no alternative to eatng a healthy diet and getting enough exercise to stay healthy.
Maria says:
I wouldn't take a supplement to lose weight no matter how amazing the manufacturer says it is. I just don't believe their lies. Eat healthy and don't eat anything processed or artificial and that's half the battle already won.