The Federal Trade Commission and the Maine Office of the Attorney General today announced a complaint and three settlements with dietary supplement marketers who allegedly used radio infomercials deceptively formatted as talk shows and print ads featuring fictitious endorsers to advertise supplements purporting to improve memory and to reduce back and joint pain.
The three court orders resolving charges against six of the nine defendants named in the complaint bar them from making similar deceptive claims, and prohibit them from engaging in a wide range of marketing practices that have caused serious financial injury to consumers.
The FTC and Maine AG allege that defendants XXL Impressions LLC, Jeffrey R. Powlowsky, J2 Response LLP, Justin Bumann, Justin Steinle, Synergixx, LLC, Charlie Fusco, Ronald Jahner, and Brazos Minshew made false and misleading claims that CogniPrin: 1) reverses mental decline by 12 years; 2) improves memory by 44 percent; and 3) improves memory in as little as three weeks and is clinically proven to improve memory; and that FlexiPrin: 1) reduces joint and back pain, inflammation, and stiffness in as little as two hours; 2) rebuilds damaged joints and cartilage and; 3) has been clinically proven to reduce the need for medication in 80 percent of users and to reduce morning joint stiffness in all users.
In addition, defendants Ronald Jahner and Brazos Minshew, who were featured in ads as medical experts, are charged with providing endorsements without examining the products or exercising their supposed expertise. Further, the complaint alleges that Minshew is not actually an expert in neurology or brain science, as claimed in the radio ads.
The defendants promoted CogniPrin and FlexiPrin primarily through 30-minute radio ads formatted to sound like educational talk shows featuring defendants Jahner and Minshew (using a pseudonym) as purported experts who made unsubstantiated claims about the benefits of the products.
The complaint alleges that the defendants failed to disclose that defendant Jahner, who was presented as an objective medical expert, was paid a percentage of revenues generated from FlexiPrin and CogniPrin sales. In addition, the defendants allegedly used fictitious testimonials in print ads and on the internet to claim the products really worked. The complaint further alleges that defendants Powlowsky, XXL Impressions, J2 Response, Bumann, and Steinle falsely represented that consumers could try CogniPrin free for 30 days, while failing to disclose that consumers would have to enroll in a continuity plan to qualify for the offer, and that they would actually have only 14 days or less to try the product.
The complaint also alleges that these defendants, along with defendants Synergixx and Fusco, deceptively claimed that consumers could try the supplements “risk-free” with an unconditional 90-day money-back guarantee, when there were important undisclosed and burdensome requirements for obtaining refunds, including the return of empty product bottles and payment of significant shipping charges.
In addition, according to the complaint, these defendants failed to make important disclosures to consumers when they “up-sold” consumers negative option buying clubs and discount medical programs with ongoing monthly fees, charging many consumers for poorly disclosed continuity plans they did not want.
Based on this conduct, the agencies charged the defendants with violating the FTC Act, the Electronic Fund Transfer Act (EFTA) and its implementing Regulation E, the Telemarketing Sales Rule, and the Maine Unfair Trade Practices Act.
Defendants Powlowsky, XXL Impressions, J2 Response, Bumann, and Steinle have agreed in two separate proposed court orders to substantial injunctions against making unsubstantiated health efficacy claims. Both orders bar the defendants from making the false or unsubstantiated heath claims challenged in the complaint and require them to have competent and reliable scientific evidence when making health-related claims. They also require the defendants to preserve all scientific evidence supporting claims they make, and bar them from failing to disclose a material connection to a paid endorser.
The orders further bar these defendants from misrepresenting the terms of any negative-option, continuity plans, or “free trial” offers, and require them to get consumers’ express consent before charging them. The orders prohibit the defendants from violating the Restore Online Shoppers’ Confidence Act and require them to comply with the EFTA. The two orders also impose a $6.57 million judgment against defendants, with all but $556,000 suspended due to the defendants’ financial condition.
The order against Powlowsky and XXL Impressions LLC also bans them from direct response marketing of foods, dietary supplements, or drugs for 20 years, while allowing the former to continue his manufacturing brokering business.
The order against the sixth settling defendant bars Minshew from acting as an “expert endorser” unless he has the expertise he claims to have, and requires him to have scientific evidence to support the product claims he makes.
The Commission vote approving the complaint and the three proposed stipulated orders against six defendants was 3-0. The FTC filed the complaint and proposed orders in the U.S. District Court for the District of Maine. Litigation continues against defendants Charlie Fusco, Synergixx, LLC, and Ronald Jahner.
The FTC appreciates the assistance provided by the Maine Office of the Attorney General in bringing this case.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated 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 a District Court judge.
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