Markets Wired

The Boca Raton, Florida-based marketers and sellers of two Aloe vera-based supplements have agreed to settle Federal Trade Commission charges that they deceived consumers with false and unsupported claims that two products, TrueAloe and AloeCran, were effective treatments for a range of conditions affecting seniors, including chronic pain, ulcerative colitis, diabetes, and acid reflux.

The court order resolving the FTC’s complaint bars the defendants from making false and unsubstantiated health claims and requires them to pay $537,500, which the Commission may use to provide refunds to defrauded consumers. The order also requires the defendants to disclose any material connection they have with compensated reviewers.

“The FTC has shown over and over that it will go after companies that we believe are peddling false health claims about their pills and potions,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Our settlement with NatureCity is the latest example, and we’re especially concerned that the company targeted older adults and tried to steer them away from standard medical treatments.”

According to the FTC’s complaint, NatureCity, LLC and Carl Pradelli and Beth Pradelli, individually and as officers of the company, violated the FTC Act in connection with the marketing and sale of TrueAloe and AloeCran.

The Commission alleges that since May 2002, the defendants have marketed and sold TrueAloe and AloeCran, primarily through direct mail to consumers nationwide. The defendants claimed that these products could improve cholesterol and triglyceride levels, relieve chronic pain, and mitigate or treat various diseases and health conditions, including ulcerative colitis, diabetes, and acid reflux. The FTC alleges that the defendants’ claims were deceptive and not supported by competent and reliable scientific evidence.

The FTC further alleges that the company used testimonial reviews by seemingly independent users, but failed to disclose that the reviewers received free products or free lifetime memberships as compensation for providing the reviews.

The final order announced today settles the FTC’s charges against the NatureCity defendants. It prohibits the defendants from making health-related claims or the claims challenged in the complaint unless they have competent and reliable scientific evidence to substantiate that the representation is true.

The order prohibits the defendants from making other misleading or unsubstantiated claims about the health benefits, performance, efficacy, safety, or side effects of any covered product, and requires them to have competent and reliable scientific evidence to support any such claims they make.

Under the order, the defendants must clearly and conspicuously disclose to consumers all material connections with anyone providing an endorsement. They also must send notices about the settlement to consumers who bought TrueAloe or AloeCran. The order also imposes an $18.7 million judgment against the defendants, which will be partially suspended after they pay the Commission $537,500.

The Commission vote approving the proposed stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Southern District of Florida, and it has been entered by the court.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.