On October 19, 2012, the Federal Trade Commission announced that Circa Direct LLC and Andrew Davidson are ordered to pay over $2 million for using fake new websites to market acai berry weight-loss products deceptively.
The defendants ran internet advertisements that appeared like they were from news websites. The advertisements used titles like “News 6” and “New Jersey Job Report,” and the websites stated they provided investigative reports for certain weight-loss products, schemes that involved working from home, penny auctions, and more. However, the FTC calls the claims bogus and indicates the websites were only deceptive advertisements.
Circa Direct and the owner, Andrew Davidson, were accused by the FTC of making false claims about products containing acai berry and failed to provide consumers with information about the relationship between the products and the services provided by the fake news websites. For example, a fake reporter wrote a fake news story on how they lost 25 pounds in a month after using the products.
The original settlement asked for a judgment of about $11.5 million, but the FTC has agreed to suspend the judgment after it receives over $2 million from the defendants’ personal and business accounts, investment accounts, and multiple proceeds.
The fake news websites and Andrew Davidson were sued after authorities made a sweep against 10 different affiliate marketing initiatives that used fake news websites to market weight loss products. To date, the FTC has reached agreements with 8 of the 10 affiliate marketing conspirators.
During the settlement with Circa Direct, U.S. District Court Judge Renee Marie Bumb stated the FTC failed to include an admission of liability in the order. So, the FTC is now required to create a website that gives the public access to the notice for the court, a summary of the crimes, and links to supportive documents.
Source: Federal Trade Commission