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Memory Loss 2019

Marketers of ‘cognitive improvement’ supplements settle FTC charges

FTC officials continue to target false advertising claims aimed at vulnerable populations, such as the elderly who are seeking ways to alleviate the symptoms of aging, such as memory loss.

Twelve corporate entities and four individual defendants targeted by U.S. regulators settled charges that they deceptively marketed dietary supplements for “cognitive improvement” using a variety of shady tactics from bogus news websites to fraudulent consumer and celebrity endorsements.

The supplement marketers also referenced clinical studies that didn’t exist and used affiliate marketers to make deceptive claims about products sold under different names, including Geniux, Xcel, EVO and Ion-Z, according to an FTC news release.

Among the alleged fraudulent behavior regulators identified:

  • False claims in advertisements, as well as through defendants’ websites and the websites of affiliate marketers, that the Geniux products:
    • had been tested in more than 2,000 clinical trials;
    • were backed by scientific studies supporting increased brain power, memory recall and IQ, as well as boosted user’s focus by up to 121 percent and concentration by 32 percent;
       
  • Deceptive formatting of some websites to resemble legitimate news websites for the purpose of directing consumers to defendants’ websites where they could purchase the Geniux products;
     
  • Websites falsely attributing the achievements of business luminaries—including Microsoft founder Bill Gates, Tesla CEO Elon Musk and the late physicist Stephen Hawking—to the Geniux products;
     
  • Phony consumer endorsements that failed to disclose the endorsements were paid ads; and
     
  • Despite advertisements claiming the Geniux products featured a “100% Money Back Guarantee” and consumers could try the products “risk free,” individuals who tried to return products found it difficult or impossible to obtain a refund.

FTC officials continue to target false advertising claims aimed at vulnerable populations, such as the elderly who are seeking ways to alleviate the symptoms of aging, such as memory loss. 

“With an aging population, it is more important than ever that advertisers have solid evidence to back up their claims about memory and cognitive health benefits,” said Andrew Smith, director of FTC’s Bureau of Consumer Protection, in a statement. “Moreover, the FTC will hold companies accountable when they deceptively design their ads to look like news articles and fabricate celebrity endorsements and consumer testimonials.”

FTC approved two separate proposed orders settling FTC’s charges in this case. The first order resolves the allegations against the following individuals: Fred Richard Guerra, III; Lanty Paul Gray, Jr.; and Rafat Abbas; as well as corporate defendants Global Community Innovations LLC, Innovated Health LLC, Emerging Nutrition Inc., Buddha My Bread LLC, Innovative Fulfillment LLC, Ship Smart LLC, Vista Media LLC, Ash Abbas LLC, DCT Marketing Inc. and RNA Enterprise Inc.

The second order resolves the allegations against Robby O. Salaheddine as well as corporate defendants Premium Health Supplies LLC and ROS Marketing & Consulting LLC.

Under the settlements, the defendants are banned from engaging in the conduct government officials alleged violated the FTC Act. Combined, the judgments in two proposed orders filed in U.S. District Court in the Northern District of Ohio exceed $26 million. But the majority of the judgment amounts will be suspended after the defendants pay a total of $623,000 based on their financial conditions.

Jennifer Armstrong, an attorney in Cleveland who represented several of the defendants, did not immediately respond to a request for comment for this article.

 

TAGS: Supplements
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