Affiliate sites appeared to be objective, with names like channel8health.com and online6health.com.
The Federal Trade Commission has filed a complaint with the State of Connecticut to stop LeanSpa LLC, an Orange, Conn.-based weight loss company that has allegedly used fake news websites from affiliate marketers to promote its products. The FTC also says the company made deceptive claims and told consumers they could receive free trials of acai berry and colon cleanse products.
The FTC alleges many consumers ended up paying $79.99 for the trial and were roped into recurring monthly shipments of products that were difficult to cancel.
The defendants netted more than $25 million from U.S. consumers as a result, the FTC says.
This is the FTC's eleventh case involving fake news websites and the promotion of dietary supplements. In April, the FTC charged ten companies with similar practices. It now has a consumer alert to help customers avoid deceptive claims, as well as a video that talks about the risks of free trials, which the FTC says are often used to market acai berry supplements and similar products.
The parties have agreed to a court order temporarily halting the conduct of Boris Mizhen, LeanSpa and two other companies Mizhen controls. The order also continues an asset freeze, appoints a temporary receiver and gives the receiver, the FTC and the State of Connecticut immediate access to the business premises, the FTC says.
On Thursday, the LeanSpa website said the product was sold out and the company was no longer taking new orders.
According to the FTC, the defendants hired affiliate marketers to create fake news sites promoting their products. What’s more, the fake sites appeared to be objective, with names like channel8health.com, dailyhealth6.com and online6health.com. The stories included headlines like, "Acai Berry Diet Exposed: Miracle Diet or Scam?" and "1 Trick of a Tiny Belly: Reporter Loses Her 'Belly' Using 1 Easy Tip.” The FTC says the stories also sometimes displayed the logos of reputable news sources, like CNN, MSNBC and Fox News.
The fake reporters claimed to have lost weight quickly and included links to sites where consumers were offered samples. The FTC says the affiliate marketers earned a commission for each consumer who signed up for a trial.
The complaint also says consumers were encouraged to provide credit or debit card information to receive the samples for a small shipping and handling fee, but were later charged $79.99 for one of the products or $158.98 for both. Additionally, some consumers were allegedly charged before receiving the samples or before the trial period ended.
Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!
Lisa Lacy is senior staff writer at ClickZ. In addition to ClickZ, her work has appeared in The Huffington Post, The Luxury Spot, LearnVest, MarthaStewart.com, GoodHousekeeping.com, amNewYork, and The Wall Street Journal. She's a graduate of Columbia's School of Journalism.
Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.
Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?
March 19, 2014