The Federal Trade Commission announced that an operation that marketed acai berry supplements, “colon cleansers,” and other products using allegedly fraudulent free trial offers and phony endorsements from celebrities will pay $1.5 million as part of a settlement. The money will be made available for consumer refunds.
According to the FTC, the case against Phoenix-based Central Coast Nutraceuticals, Inc., is part of the its ongoing efforts to protect consumers from fraudulent internet marketing, as well as false and misleading health claims. The settlement order bans the defendants from so-called “negative-option” sales, such as continuity plans and free or introductory price trial offers, in which consumers pay nothing up front or only a small fee to receive a product, but are then automatically charged a higher price unless they take steps to cancel the shipments, or return the product before the end of the trial period.
Victimized consumers flooded law enforcement agencies and BBB with thousands of complaints about the company. The defendants’ marketing traded on the rampant popularity of acai berry supplements, which are derived from acai palm trees that are native to Central and South America.