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FTC Stops Two More Açai Operations
- Details
- Published on Tuesday, 03 April 2012 09:21
- by Katherine Cheung
Two açai operations have settled FTC charges[1] of deceptive practices involving the use of fake news websites to market açai products and colon cleansers with deceptive weight-loss claims.
They will cease illegal operations and pay fines of about $1.5 million. This follows previous FTC settlements and closures of other açai operations for similar charges, signaling ongoing enforcement actions by FTC in this market area.
Intermark Communications (dba Copeac) and related defendants were the first affiliate network sued by FTC—Copeac used fake news sties and recruited affiliates to do the same. As part of a low enforcement sweep last year against 10 alleged fake news website operators, FTC charged Copeac et al. with deceptive advertising, false claims, unsupported weight-loss claims and failure to disclose monetary connections with the merchants of the weight-loss products.
Under terms of the settlement, Copeac and three affiliate defendants—Timothy McCallan, Michael Krongel, and Danielle Krongel—will pay more than $1.3 million, representing revenues from their illegal açai operations. Copeac is also ordered 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.
In the other case, Coulomb Media and Cody Low (aka Joe Brooks)will have their $2.7 million judgment suspended after they pay $170,000 in cash, proceeds from the sale of Low’s 2010 Chevrolet Tahoe, and a certificate of deposit. In this,a s well as the other cases, the defendants are barred from using deceptive claims to market health products and are ordered to make clear when marketing messages are advertisement and not legitimate journalism.
Through the federal courts, FTC shut down 10 such operations last year, alleging the marketers used websites designed to appear like real news sites touting the science and benefits of açai, but the sites were nothing more than advertisements.
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