WASHINGTON—A Texas-based company has agreed to pay USD $3.5 million as part of a settlement following allegations that it made unsubstantiated weight-loss claims about green coffee extract to retailers, FTC announced Monday.

FTC said retailers made the same baseless claims about green coffee extract in marketing finished products to consumers. The government agency, which regulates business practices, attacked the validity of a weight-loss study that was touted on The Dr. Oz Show, claiming “no reliable conclusions could be drawn from it."

In addition to paying $3.5 million, any future weight-loss claims made by Applied Food Sciences Inc. (AFS) must include at least two adequate and well-controlled human clinical tests as part of a requirement that such claims are backed by science, the FTC said.

“Applied Food Sciences knew or should have known that this botched study didn’t prove anything," said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, in a statement. “In publicizing the results, it helped fuel the green coffee phenomenon."

Four years ago, AFS paid researchers in India to conduct a clinical trial on overweight adults to test whether a dietary supplement containing green coffee extract (Green Coffee Antioxidant or GCA) reduced body weight and body fat, according to the FTC’s complaint.

FTC claimed the study’s lead investigator, Mysore Nagendran—a doctor then with the Trinity Hospital and Heart Foundation in Bangalore, India—repeatedly altered important measurements of the subjects, including their weights, changed the length of the trial, and confused which subjects were taking the placebo or GCA during different phases of the trial. AFS relied on the study in support of claims that GCA caused consumers to shed 17.7 pounds, 10.5 percent of body weight, and 16 percent of body fat with or without diet and exercise, in 22 weeks, according to the FTC’s complaint.

“There are two very important lessons here. First, while the vast majority of FTC cases are against finished products for claims directed to consumers, this is an important reminder that the FTC can, and does, take action against ingredient companies for claims made in B2B communications," said Ivan Wasserman, a partner with the law firm Manatt, Phelps & Phillips, LLP, in an emailed statement to Natural Products INSIDER. “Second, this is another example that the FTC is not accepting reports of clinical trials at face value (even if they are published), and is digging deep into the data to look for flaws, whether intentional or accidental. Therefore, reasonable due diligence into clinical research before including an ingredient in a product is more important than ever."

AFS, based in Austin, Texas, did not respond Wednesday to requests for comment on the settlement. The company says on its website that it “specializes in the development and marketing of proprietary technologies used in foods, beverages and nutritional supplements."