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FTC Charges Weight Loss Companies with Fraud

Published on Feb 3, 2014 at 7:54 am in Dangerous Drugs.

Too-good-to-believe weight-loss promises are an old trick that, sadly, is still gaining traction with consumers. This time around, it’s creams to slim your thighs, a powder to sprinkle on your food, hormones, and herbs.

In early January, the Federal Trade Commission (FTC) charged four companies with using deceptive marketing practices with their weight loss products. They were “deceptive” because the companies can’t show the marketing claims had any merit.

These are the four products under fire:

  1. Sensa – Sensa is a powder that, according to the marketing, allows you to lose weight if you sprinkle the powder-like crystals on your food. The claim was that the crystals would stimulate your brain in a way that causes you to eat less. A doctor was behind this product, claiming the crystals manipulated your sense of smell and tricked your body into feeling fuller, faster. The company is estimated to have sold more than $360 million worth of Sensa from the period 2008 through 2012. It was fined $46.5 million, but will only pay half that due to an inability to pay in full.
  2. L’Occitane – This company sold Almond Beautiful Shape and Almond Shaping Delight skin creams. L’Occitane is an established retailer with more than 2,000 stores in the world. The 7-ounce “firming” creams sold for $44 to $48 and the company claimed they would trim inches from your body in four weeks. It was fined $450,000.
  3. HCG Diet Direct – This was a product using the human hormone HCG that is supposedly a weight loss treatment – a claim that has never been proven. Its $3.2 million fine was suspended because the company was unable to pay.
  4. LeanSpa – LeanSpa sold weight-loss supplements made of acai berry and colon cleanses, which it supported with fake news websites to promote the products. It will pay a fine valued at about $7 million.

Altogether, the companies agreed to pay a total of more than $30 million, which will go to refund consumers. The companies settled the case without admitting or denying the claims.

Going forward, analysts say this means the FTC plans to require companies marketing weight loss products to produce proof that they work, using double-blind studies controlled with placebos. The FTC is also hoping that media companies won’t run advertisements for weight-loss products that make fantastical-sounding claims.

These same companies may also be liable to Kentucky consumers for misrepresenting the effectiveness of their products. The Kentucky Consumer Protection Act prohibits companies from using false and misleading tactics to entice consumers to buy their products. The act can be enforced by individuals who purchased these products or by the Kentucky Attorney General.

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Tad Thomas has dedicated his practice to representing plaintiffs in various types of civil litigation, including personal injury, business litigation, class actions, and multi-district litigation.

After graduating with his law degree in 2000 from Salmon P. Chase College of Law at Northern Kentucky University, Mr. Thomas immediately opened his own private practice and began representing injury victims.

In 2011, Thomas Law Offices was established in Louisville, Kentucky. Over the past decade, Mr. Thomas has expanded his firm and now has offices in three additional locations: Cincinnati, Ohio, Columbia, Missouri, and Chicago, Illinois. He is also a frequent lecturer on topics like trial skills and ethics and technology.

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