Online Marketing Companies Settle Deception Charges
23 March 2012
The US Federal Trade Commission (FTC) has announced that two online marketing companies have agreed to settle FTC charges that they used fake news websites to promote acai berry supplements and so-called “colon cleansers” with false claims that consumers could use them to lose weight. As per the settlement order (15 March 2012) made in the first case, Intermark Communications (trading as Copeac) and several other defendants will “pay more than $1.3 million, which represents revenues they received from deceptive fake news site ads for acai berries, colon cleansers, and other supposed weight-loss dietary supplements; and revenues they received for other products marketed on fake news sites”. Copeac is also required “to monitor all its affiliate marketers when selling any good or service, obtain adequate information about the affiliate marketers it hires, approve their advertisements, and immediately stop processing payments generated by any affiliate marketer using deceptive advertisements”.
As per the settlement order (19 March 2012) made in the second case, defendants Coulumb Media and Cody Low (also known as Joe Brooks) will have their US$2.7 million judgment suspended after they pay US$170,000 in cash, proceeds from the sale of Mr Low’s car, and a certificate of deposit. The defendants from both cases are required to clarify when their commercial messages are advertisements rather than legitimate journalism, are prohibited from making further misleading claims about health-related products and must disclose “any material connections they have with merchants”.
FTC’s media release (21 March 2012)