Açai weight loss sites operater to pay $2 million to settle FTC case

- Last updated on GMT

Related tags: Fraud

A defendant that hawked deceptive açai weight loss products via fake news websites has agreed to pay more than $2 million to settle a case brought by the Federal Trade Commission.

Circa Direct LLC and Andrew Davidson were charged with using phony websites that made it appear as if news programs had reviewed the effectiveness of the acai products.  The sites constituted deceptive advertising, the FTC charged. As an example, FTC cited a piece in which a “reporter” claimed to have lost 25 pounds using the products.

The total settlement judgment amounts to $11.5 million, but will be suspended after FTC received the $2 million in proceeds from the defendant’s personal and corporate bank accounts, other financial assets and the sale of a house and a car.

Under the settlement, Circa Direct and Davidson are barred from passing off ads as fake news websites and must disclose financial connections they may have with merchants.  They are also barred from making deceptive and misleading claims about health-related products.

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