In case you were like Alabama football coach Nick Saban and unware, there was an election last week. One post-election issue has been the use of “fake news” to try and sway voters and possible steps to prevent those types of stories going forward. The FTC has been trying to stop “fake news” advertising for some time; see our earlier posts on the Lean Spa case, Lord & Taylor case, and Native Advertising Statement. Earlier this month, a court affirmed those efforts. The case provides a list of lessons on what not to do when advertising your products.
The FTC sued a company called Pure Green Coffee and others in 2014 alleging that they violated the FTC Act by making unsubstantiated and false weight loss claims and through the use of deceptive advertorials and testimonials in the sale of Green Coffee Weight Loss products. Apparently, the defendants entered the business after having seen an excerpt of the Dr. Oz Show touting the effects of Green Coffee Extract. The company’s advertising made claims that the product could cause dramatic weight loss including: 17 lbs. in 22 weeks; 17 lbs. in 12 weeks, 16% of body fat in 22 weeks, 20 lbs. in four weeks, and 1-2 inches of belly fat in one month.
In 2015, most of the defendants settled for judgments in the amount of $30 million, with almost all of that suspended based on the inability to pay. One defendant, Nick Congleton, chose to fight. In early November, the court entered summary judgment against him for $29 million, a HUGE amount.