Six online marketers have agreed to settlements with the Federal Trade Commission that the agency says will permanently halt their allegedly deceptive use of fake news websites to market acai berry supplements and other products.
The proposed settlements require the operations to make clear when their messages are advertisements rather than objective journalism and will bar the defendants from further deceptive claims. The defendants also must disclose any connections they have with merchants.
Finally, defendants are required to pay roughly $500,000 to the FTC. The monetary judgments are in the full amount of the commissions the defendants received as a result of their deceptive marketing, the agency said. This amounts to most of their assets.
Due to the defendants’ financial condition, the FTC said these judgments will be suspended when it receives certain assets. For example, Ricardo Jose Labra’s $2.5 million judgment will be suspended when he pays $280,000 and records a $39,500 lien on his home. And Zachary Graham’s $953,000 judgment will be suspended when he pays $110,000 plus most of the proceeds from the sale of a truck.In all cases, if it is later determined that the financial information the defendants provided the FTC was false, the full amount of their judgments will become due.
At the FTC’s request in April 2011, federal courts temporarily halted ten acai berry operations. The FTC alleged their websites were designed to appear as if they were part of legitimate news organizations. They had titles such as “News 6 News Alerts,” “Health News Health Alerts,” or “Health 5 Beat Health News” and often falsely represented that the reports had been seen on media outlets like ABC, Fox News, CBS, CNN, USA Today and Consumer Reports.
The FTC received numerous complaints from consumers who paid between $70 and $100 for weight-loss products after having been deceived.
Last year, the FTC brought suit against two other online acai berry marketers: LeanSpa, LLC, which the FTC sued in conjunction with the State of Connecticut, and Jesse Willms. In both cases, the FTC obtained preliminary injunctions barring the defendants from engaging in the charged deceptive practices.
The digital advertising landscape is shifting rapidly. Challenges ranging from fraud to online ad-blocking have thrown established ad practices into disarray, and brand marketers face a myriad of obstacles as they compete to reap the potential benefits of unprecedented market access.
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