CHICAGO—At the request of FTC, the U.S. District Court, Northern District of Illinois, on Aug. 6 imposed a temporary restraining order on Phoenix-based Central Coast Nutraceuticals Inc. (CCN); it also froze the company’s assets and appointed a temporary receiver over CCN and several related companies, allowing the federal agency to proceed with its case regarding the company’s marketing and sales practices.
The FTC charged CCN, two individuals and four related companies with multiple violations, including deceptively advertising AcaiPure, an acai berry supplement, as a weight-loss product, and Colopure, a colon cleansing supplement, as an aid for preventing cancer. It also alleged CCN used deceptive advertising and unfair billing practices, promising buyers a free trial and then billing their credit cards without authorization to what it estimated was $30 million or more in 2009 alone. FTC is seeking a permanent prohibition, as well as consumer redress and possible additional relief.
The alleged deceptive practices in FTC’s charges include:
- Falsely claiming the use of AcaiPure could lead to substantial and rapid weight loss.
- Making unproven claims about the scientific substantiation about AcaiPure’s weight loss impact.
- Deceptively claiming Colopure could prevent colon cancer through detoxification and removing toxic waste from the digestive system.
- Falsely claiming celebrities including Oprah Winfrey and Rachael Ray had endorsed CCN products.
- Deceptively claiming they would provide full refunds upon request.
- Failing to adequately disclose that consumers would be automatically enrolled in a membership program, charged for monthly supplies of a product, and automatically charged for items other than the trial product unless they opted out.
- Making unauthorized charges to consumers’ credit and debit card accounts.
FTC’s complaint also names as defendants Graham D. Gibson and Michael A. McKenzy, and four companies affiliated with CCN—iLife Health and Wellness LLC; Simply Naturals LLC; Health and Beauty Solutions LLC; and Fit for Life LLC. FTC’s compliant is not a finding or ruling that the defendants have violated the law.
This is not the first time CCN’s sales and marketing claims have drawn attention. In January 2009, the Council of Better Business Bureaus (BBB) issued a consumer warning about the marketing claims and sales practices of the company; a month later, its National Advertising Division (NAD) referred advertising for Colotox to FDA and FTC for review, after CCN did not respond to NAD’s requests for substantiation of certain health claims on product labeling and marketing. The company was also ordered in June 2009 to pay $1,375,000 in fines stemming from a consumer fraud lawsuit filed by the state of Arizona charging CCN with deceptive online sales practices.
