Two Marketers Settle 'Fake News' Cases With FTC
IMM Interactive has agreed to pay more than $1.3 million to settle charges that it duped consumers by creating fake news sites touting acai berry as a weight-loss supplement, the Federal Trade Commission announced.
The company, formerly Intermark Communications, also promised that it won't make future misrepresentations to consumers, such as presenting marketing copy as news reports. IMM also promised to keep a tight rein on affiliates in the future. Among other terms, IMM agreed to require affiliates to submit any marketing materials to the company for vetting. IMM also said it won't pay affiliates for any leads or sales if it uses marketing materials that have been disapproved.
The company did not admit wrongdoing. IMM is one of nearly a dozen companies sued by the FTC last year for allegedly using fake news sites to sell acai berry. IMM allegedly also recruited a network of affiliate marketers, who created at least some of the fake sites.
With names like “News 4 Daily,” the fake sites often included names or logos of major TV and cable networks, in an effort to trick people into thinking the posts were broadcast on television. The sites carried "articles" claiming that that reporters who tried acai berry lost 25 pounds in four weeks, the FTC alleged.
The FTC also said on Wednesday that a second online marketer, Coulomb Media, reached a settlement with the FTC over fake news sites. Coulomb, which also didn't admit wrongdoing, agreed to a $2.7 million judgment, with all but $170,000 suspended.
In January, the FTC announced that it had reached settlements with six other online marketers it sued for using fake news sites to sell the supplement.