Marketing Architects, Inc. (MAI), an advertising agency that created and disseminated allegedly deceptive radio ads for weight-loss products marketed by its client, Direct Alternatives, has agreed to pay $2 million to the Federal Trade Commission and State of Maine Attorney General’s Office to settle their complaint.
The complaint cites a history of creating similar claims for other weight-loss marketers.
Minneapolis-based MAI created advertising for a number of Direct Alternatives’ products, including Puranol, Pur-Hoodia Plus, PH Plus, Acai Fresh, AF Plus, and Final Trim, between 2006 through February 2015. In 2016, the FTC and Maine settled allegations against Direct Alternatives that the company made false or unsubstantiated weight-loss claims and that it deceptively marketed risk-free offers for AF Plus and Final Trim.
The FTC alleges that MAI created and disseminated radio ads with false or unsubstantiated weight-loss claims for AF Plus and Final Trim. MAI previously created weight-loss ads for Sensa Products, LLC between March 2009 and May 2011 similar to the ads challenged in the Direct Alternatives complaint. Sensa was the subject of an FTC complaint filed in 2014 and agreed to refund $26.5 million to defrauded consumers.
The commission stressed that in addition to receiving FTC’s Sensa order, MAI was previously made aware of the need to have competent and reliable scientific evidence to back up health claims. Among other things, the complaint alleges that Direct Alternatives provided MAI with documents indicating that some of the weight-loss claims later challenged by the FTC needed to be supported by scientific evidence.
The complaint further charges that MAI developed and disseminated fictitious weight-loss testimonials and created radio ads for weight-loss products falsely disguised as news stories. The complaint also charges MAI with creating inbound call scripts that failed to adequately disclose that consumers would be automatically enrolled in negative-option (auto-ship) continuity plans.
The FTC has proposed an order banning MAI from making any of the seven “gut check” weight-loss claims that the FTC has publicly advised are always false with respect to any dietary supplement, over-the-counter drug, or any product rubbed into or worn on the skin. The order also requires MAI to have competent and reliable scientific evidence to support any other claims about the health benefits or efficacy of weight-loss products, and prohibits it from misrepresenting the existence or outcome of tests or studies. In addition, the order prohibits MAI from misrepresenting the experience of consumer “testimonialists” or that paid commercial advertising is independent programming.
More on the FTC’s action can be found here.
MAI issued a statement:
“Marketing Architects is proud of its commitment to uphold high ethical standards. We disagree with the allegations in the complaint but decided settlement over litigation was the best path forward for the business. One of our former clients made product claims that the FTC considered to be unfair advertising practices. We had no knowledge of these unfair practices or widespread customer dissatisfaction.
“We have made improvements to the way we do business, including hiring a general counsel with expertise in advertising law; strengthening our business practices; and no longer working with weight loss companies. These changes will better position us for long-term growth.”
This story has been updated with a statement from MAI.