Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC halts spam operation marketing weight-loss products, (May 5, 2015)
Organizations Mentioned:Prisma Profits. | Purists Choice, LLC | Sale Slash, LLC
By Michael Menzhuber, J.D., LL.M.
In response to an FTC complaint, the federal court in Los Angeles has temporarily halted a Glendale, California operation that allegedly used millions of illegal spam emails—along with false weight-loss claims and fake, unauthorized celebrity endorsements—to market its unproven diet pills, the agency announced (FTC v. Sale Slash, LLC, April 27, 2015).
The FTC’s complaint charged that Sale Slash, LLC; Purists Choice, LLC; Artur Babayan, individually and as an owner and manager of the two companies; and Vahe Haroutounian, individually and doing business as Prisma Profits, violated the CAN-SPAM Act by using affiliate marketers to send illegal spam emails and post banner ads online that led consumers to fake news sites. These fake sites, which were designed to appear as if an independent consumer reporter, rather than a paid advertiser, had reviewed and endorsed the products, made false weight-loss claims and used phony celebrity endorsements to promote the defendants’ diet pills. Whenever consumers clicked through from a fake news website to one of the defendants’ sites and bought their supplements, the affiliate marketers received a commission.
According to the complaint, the defendants’ affiliates used stolen email user accounts to “blast” the users’ contacts with spam which often contained no information about how consumers could opt out of getting future emails. Because these emails were sent to the “contacts” of hacked accounts, they appeared to be coming from a friend or family member instead of defendants’ affiliates.
Since 2012, the defendants allegedly have marketed and sold a variety of products nationwide, including supposed weight-loss supplements such as Premium Green Coffee, Pure Garcinia Cambogia, Premium White Kidney Bean Extract, Pure Forskolin Extract, and Pure Caralluma Fimbriata Extract.
The court order halts the defendants’ illegal conduct, freezes their assets, and appoints a temporary receiver over the corporate defendants. Ultimately, the Commission is seeking to recover money from the defendants that would be used to provide refunds to consumers who bought the defendants’ diet pills.
Companies: Sale Slash, LLC; Purists Choice, LLC; Prisma Profits.
News: Privacy ConsumerProtection FederalTradeCommissionNews