The Federal Trade Commission (FTC) has slapped an unappetising $12.8m suspended fine on a diet pill business over its penchant for posting fictitious customer reviews on Amazon, commissioned from a complicit marketing company.
The villain of the piece is Cure Encapsulations and its owner Naftula Jacobowitz who reached a settlement with the FTC to pay $50,000 after pleading poverty, although the full $12.8m will be liable ‘if the defendants are later found to have misrepresented their financial condition’.
The case marks the first time the FTC has made a judgement against a company posting false reviews on Amazon, including unsubstantiated claims about the efficacy of its supposed weight-loss supplement – including assertions that it was a ‘powerful appetite suppressant’ and ‘literally blocks fat from forming’.
Cure Encapsulations is banned from repeating such claims in future without first obtaining ‘competent and reliable scientific evidence in the form of human clinical testing supporting the claims’.
In a busy day for the FTC the regulator has also slapped a $5.7m fine on social media darling TikTok over 'disturbing' child privacy failings.