As consumers look to improve their health and slim their waistlines in the New Year, the Federal Trade Commission (FTC), Washington, D.C, has unveiled a new initiative to help weight watchers avoid being duped by misleading ads and ineffective products.
 
In a press conference on Jan. 7, the FTC announced the launch of “Operation Failed Resolution”—a strategy aimed to crack down on fraudulent products and marketing campaigns, as well as educate the media on how to identify false claims.
 
“Consumers face a barrage of opportunistic marketers making claims for quick ways to shed pounds and shave inches. But the chances of being successful at substantial weight loss just by sprinkling something on your food, rubbing creams on your body or using a supplement—well, they’re slim to none,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Weight loss products are a multibillion dollar industry and their implausible claims not only cost millions of dollars in consumer injury, but encourage people to postpone the important changes in diet and exercise that actually can make a difference.”
 
The FTC also unveiled four law enforcement actions against several companies promoting “too good to be true” weight loss solutions at the consumers’ expense. The FTC anticipates that it will recover approximately $34 million for consumers from these settlements.
 
The FTC vs. Sensa
California-based Sensa Products, LLC agreed to pay $26 million to settle claims the company deceptively advertised its powdered food additive Sensa. The company had claimed Sensa curbed users’ appetites and made consumers feel fuller faster by enhancing food’s smell and taste. Sensa also claimed the use of its product would lead to weight loss without dieting and exercise. Further, the FTC’s complaint indicated that the defendants did not have sufficient reliable scientific evidence to support its weight loss claims.
 
In addition to Sensa Products, LLC, the FTC’s complaint named parent company Sensa, Inc., CEO Adam Goldenberg, and Sensa creator and part owner Dr. Alan Hirsch, with deceptive advertising for making unsubstantiated claims about Sensa.
 
The FTC also said the defendants failed to disclose that some consumers were compensated for their endorsements of Sensa. In some instances, compensation included payments of $1,000 or $5,000, and trips to Los Angeles.
 
“Ads for Sensa were ubiquitous on radio and in newspapers and magazines like Parade… retail stores like Costco and GNC, and on television shows like the Home Shopping Network and Shop NBC,” said Ms. Rich. “Consumers paid around $60 a month for the product and U.S. sales were over $364 million.”
 
However, the supposed science used to substantiate the product was misleading and faulty at best. “None of the studies Sensa touted in its ads or relied on to support its remarkable claims were adequate. In fact, the FTC has alleged that one study the defendant described as an ‘independent, double-blind, placebo-controlled study,’ was based on fabricated data, and too largely controlled by the defendants to be characterized as independent. Two studies conducted by Sensa’s doctor endorser were also fatally flawed.”
 
Ms. Rich added, “The settlement requires Sensa to return $26.5 million to consumers. This is the second biggest deceptive advertising settlement in FTC history.”
 
The FTC vs. L’Occitane
The FTC also reached a settlement with New York-based cosmetic company L’Occitane, Inc., which required that the company stop making deceptive claims with regards to its Almond Beautiful Shape and Almond Shaping Delight skin creams. The beauty retailer claimed that the products had clinically proven slimming capabilities, with ad campaigns in 2012 citing that Almond Beautiful Shape could “trim 1.3 inches in just 4 weeks,” and that it was a “cellulite fighter.” It also promoted Almond Shaping Delight by claiming that it had “clinically proven slimming effectiveness,” and would “visibly refine and reshape the silhouette, to resculpt and tone the body contours.” L’Occitane’s ads also claimed that both products could produce a “noticeably slimmer, firmer you … (in just 4 weeks!).”
 
The company—which charged $48 for 7 ounces of Almond Shaping Delight and $44 for 6.7 ounces of Almond Beautiful Shape—agreed to pay $450,000 to consumers as part of the settlement.
 
The FTC vs. HCG Diet Direct
Liquid homeopathic hCG drops, sold and marketed by Arizona-based HCG Diet Direct, have also come under fire from the FTC.
 
The company’s product, HCG Diet Direct Drops, is a diluted liquid form of human chorionic gonadotropin—a hormone produced by the human placenta. According to HCG Diet Direct, by placing hCG drops under the tongue, and adhering to a low calorie diet, consumers could lose a significant amount of weight quickly. Statements and testimonials on the company’s website touted weight loss success stories, with some users losing one pound a day.
 
According to the FTC, the company and its director also made several other false and unsupported claims, including that the product was FDA approved, and failed to disclose that endorsers appearing in some of its advertisements were compensated, or were related to a company employee or officer.
 
The FTC, as well as the FDA, previously issued warning letters to the company in November of 2011, which advised the company that its hCG products were mislabeled drugs under the FDA Act. The company was also warned that its product was unlawful under the FTC Act, because it made weight loss claims without substantiation from sound scientific research.
 
“We’ve also challenged the defendant’s claim that its weight loss program was safe,” said Ms. Rich, “because the defendants promote using the drops along with extremely low calorie diet—500 calories a day. Such diets shouldn’t be undertaken without medical supervision.”
 
HCG Diet Direct and its director Clint Ethington have entered into a settlement with the FTC that would bar the company from making weight loss claims in the future. The settlement also imposed a $3.2 million judgment, representing all sales of HCG Diet Direct Drops. However, the payment is suspended based on the defendants’ inability to pay. 
 
The FTC vs. LeanSpa
LeanSpa principal Boris Mizhen and three companies he controls have also settled with the FTC, surrendering cash, real estate and personal property of approximately $7 million. Mr. Mizhen’s wife, Angelina Strano was also charged with accepting money from the scheme, though she did not actively participate in it. She will forfeit approximately $300,000 toward the settlement. 
 
The FTC has been working along with the state of Connecticut to shut down LeanSpa since 2011. Litigation is ongoing against LeanSpa’s affiliate network, and two other defendants.
 
LeanSpa has been charged with using fake news websites to promote acai berry and “colon cleanse” weight-loss products, and making deceptive weight-loss claims. Further, the company told consumers that they could receive free trials of their products by paying the cost of shipping and handling, yet many consumers ended up paying $79.99 for the trial, and for recurring monthly shipments of products that were difficult to cancel.
 
The FTC charged the defendants with violating Sections 5 and 12 of the FTC Act, the Electronic Funds Transfer Act, and Regulation E. The state of Connecticut alleged that the defendants violated the Connecticut Unfair Trade Practices Act.
 
The proposed settlement bans the defendants from billing consumers for products or services by automatically charging them on a recurring basis unless they opt out. It also prohibits the defendants from misrepresenting or failing to disclose facts about the products that involve costs, charges, terms for refunds, endorsements and trial supplies. Additionally, the order also prohibits the defendants from falsely claiming that any product can cause rapid and substantial weight loss without the need for dieting or increased exercise.
 
The defendants also are required to have at least two human clinical trials to support any weight loss claims they make about the products they sell, and to have competent and reliable scientific evidence for any other health claims. They are prohibited from claiming that products are clinically proven when they are not, and from violating the Electronic Funds Transfer Act.
 
Media Watchdogs
A key component of “Operation Failed Resolution” is support from media outlets in preventing misleading and fraudulent advertisements from running on their pages and airwaves. To better inform the media on the types of ads to be weary of, the FTC published several “Gut Check” guidelines to support the spotting of false claims.
 
“We do our best to stop weight loss fraud once ads are run, but the most effective frontline defense is when media outlets adopt effective in-house clearance programs to spot and reject clearly deceptive weight loss ads,” explained Ms. Rich. “Such programs are voluntary but they are highly effective. As part of our Gut Check program, the FTC is sending letters to 75 publishers, broadcasters, media groups and trade associations to update them on how to spot bogus claims in weight loss ads and alert them to new resources on our website to help them do that.”
 
According to the FTC’s Gut Check Guidelines, the key claims that should raise concerns include:

• causes weight loss of two pounds or more a week for a month or more without dieting or exercise;
• causes substantial weight loss no matter what or how much the consumer eats;
• causes permanent weight loss even after the consumer stops using the product;
• blocks the absorption of fat or calories to enable consumers to lose substantial weight;
• safely enables consumers to lose more than three pounds per week for more than four weeks;
• causes substantial weight loss for all users; or
• causes substantial weight loss by wearing a product on the body or rubbing it into the skin.

The Bureau of Consumer Protection Business Center also provided a helpful Gut Check Quiz, to help spot the key warning signs for false weight loss claims.

The Council for Responsible Nutrition’s President and CEO Steve Mister applauded the FTC’s initiative, stating “FTC’s announcement is also a good reminder to consumers that if something sounds too good to be true, it probably is.”
 
He added, “There are beneficial weight management dietary supplements on the market, and supplements also help fill nutrient gaps for those people not getting all the nutrients they need from food alone. Whether it’s a topical cream, a dietary supplement, or a diet plan, consumers should be wary of products that promise to make weight loss easy.”