Acai Weight Loss Firm to Pay the FTC $2 Million over Fake News Sites

October 24, 2012

The defendants in the case are Circa Direct LLC and Andrew Davidson.

A firm charged with creating fake news sites to sell acai berry weight loss supplements will have to pay the FTC more than $2 million, as part of a settlement. The defendants in the case are Circa Direct LLC and Andrew Davidson.

The FTC settlement imposed a judgment of almost $11.5 million, but that judgment will be suspended once the company pays the FTC more than $2 million in assets, which will come from personal and corporate bank accounts, investment and retirement accounts, and further sale of assets.

The FTC filed complaints against the defendants in 2011, when it was discovered that the defendants had run Internet advertisements that were designed to look like investigative news reports endorsing the acai supplements. For instance, one fake news story featured a reporter claiming to have lost 25 pounds in four weeks using the supplements. The FTC said the defendants did not disclose that these were advertisements instead of objective news sites. Additionally, the FTC stated that the defendants made false and unsupported claims about their acai berry products.

Moving forward, the settlement requires the defendants to clearly distinguish advertising from objective journalism. They are barred from making deceptive claims about health products.