Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Suspension of $3.2M judgment lifted against diet product marketers that misrepresented financial condition, (Feb 25, 2016)

By Michael Menzhuber, J.D., LL.M.

The FTC may attempt to collect up to $3.2 million from marketers who lied about their finances when they agreed to settle deceptive advertising charges regarding their diet drop product, the agency announced today (FTC v. HCG Diet Direct, LLC, No. CV-14-00015-PHX-NWM).

According to the FTC’s 2014 complaint, Clint Ethington and his company, HCG Diet Direct, marketed an unproven human hormone that had been touted by hucksters for more than fifty years as a weight-loss treatment. The complaint alleged that they falsely promised that the liquid homeopathic HCG drops that they marketed would cause consumers to rapidly lose substantial weight if they: (1) placed the HCG solution under their tongues before meals; and (2) adhered to a very low calorie diet.

The settlement order barred the defendants from making false or misleading claims about their Diet Direct Drops and required them to have scientific evidence to back up any efficacy claims. The order also imposed a $3.2 million judgment, which was suspended based on the defendants’ claims that they could not pay any part of it.

The suspension of the monetary judgment was lifted by the federal district court in Phoenix, in an order that the defendants failed to disclose material assets in 2014 when they settled the FTC charges against them.

Companies: HCG Diet Direct, LLC

News: Advertising ConsumerProtection FederalTradeCommissionNews