Acai Internet Firm to Pay $1.5 Million in FTC Settlement

January 11, 2012

Two individuals and five related companies are implicated in the charges.

An internet company accused of making deceptive health claims, advertising fake celebrity product endorsements, and promoting false free-trial offers will pay $1.5 million for consumer refunds as part of a settlement with the FTC, the agency announced on January 9.

According to the FTC’s complaint in 2010, Central Coast Nutraceuticals Inc., which marketed acai berry supplements, “colon cleansers,” and other health-related products, engaged in numerous fraudulent practices, including using fake endorsements from celebrities Oprah Winfrey and Rachael Ray. The company also offered free or nominal-fee product trials to customers but then later either automatically started customers on a payment plan or made unauthorized charges to their bank accounts, making it “all but impossible to avoid paying full price for the products,” the FTC said.

The company also made deceptive weight-loss and colon cancer health claims, the FTC said.

Two individuals and five related companies are implicated in the charges. Moving forward under the settlement, Central Coast Nutraceuticals will also be responsible for monitoring the activities of any affiliate marketers that sell its products, including reviewing marketing materials, to ensure compliance with the settlement orders.

Nutritional Outlook thanks Justin Prochnow for the tip.