CINCINNATI--Berkeley Nutraceuticals has reached settlements with at least 10 states over alleged fraudulent marketing and business transaction charges. Attorneys General (AG) from Arkansas, Florida, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, Virginia, Wisconsin and the District of Columbia announced the $5 million consent agreement with Berkeley, four related companies including Boland Naturals Inc., Warner Health Care, Lifekey Inc. and Wagner Nutraceuticals--all controlled by owner Steve Warshak, who is still under investigation by the Federal Trade Commission (FTC). Under terms of the 10 state agreements, the Berkeley family of companies will pay a total penalty of $2.5 million, with an additional $2.5 million due if they fail to meet any of the obligations of the agreements.
While it acknowledged no wrongdoing, Berkeley agreed to change many of its questionable business practices and make restitution to customers with complaints. Among its promises, Berkeley agreed to stop making unsubstantiated scientific claims for products, use pre-sale disclosures with details about memberships, refunds and guarantees; and cease using the word “free” in all advertising unless it discloses all related terms and conditions.
Jim Petro, AG of Ohio, which led the multi-state settlement, said his state would receive about $400,000 of the monetary penalty, which will basically cover litigation and investigation costs. Arkansas will get about $350,000, according to state AG Mike Beebe. “This settlement will put an end to two unlawful practices by one company that took advantage of Arkansans,” he said. “Not only were customers being illegally charged for products they did not order or want, but you also had a company making unproven and potentially unsafe medical claims about its products.” He added state residents who feel they were misled or unfairly charged by Berkeley can contact his office or the local Better Business Bureau in the next 90 days for help seeking restitution.
Florida AG Charlie Crist reported more than 80 of his state’s citizens have filed complaints about the Berkeley companies and have received an average of $70 per customer. “Marketing products with ‘free’ offers and grand claims of effectiveness must fully comply with the law,” he said. “Consumers have the right to know all the terms of a so-called ‘free’ offer and not be surprised with unexpected charges for what was supposed to be free.”
AGs in California, Illinois, Kansas, Mississippi and Vermont are expected to file settlements in the near future.
