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Bogus Green Coffee Bean Claims Cost Firms $9M

(CN) - A marketer who touted the supposed weight-loss benefits of green coffee bean extract on "The Dr. Oz Show" and other programs will pay $9 million to settle deceptive advertising claims, the Federal Trade Commission announced.

According to the agency, shortly after Lindsey Duncan agreed to appear on Dr. Oz but before the show aired, he began selling the extract and tailored a marketing campaign around his appearance on the show to capitalize on the "Oz effect" - a phenomenon in which discussion of a product on the program causes an increase in consumer demand.

During the show, Duncan claimed his supplements could help consumers lose up to 17 pounds and 16 percent of their body fat in just 12 weeks, without additional diet or exercise, and that these results were verified by a clinical study.

He also urged viewers to search for the product online using phrases his companies would use in search advertising to drive consumers to their websites selling the extract.

Finally, the agency says, Duncan reached out to retailers, describing his upcoming appearance on The Dr. Oz Show and saying he planned to discuss the clinical trials that purportedly proved the supplement's effectiveness.

He and his companies also began an intensive effort to make the extract available in Walmart stores and on Amazon.com when the program aired.

The strategy was an unqualified success, with Duncan and his companies -- Health LLC and Genesis Today Inc. -- reaping millions from what the FTC now characterizes as patently false claims.

Under the terms of the settlement, Duncan and his companies must substantiate any future weight-loss claims with at least two well-controlled human clinical tests. Further, the order prohibits false claims that the benefits of any such product are scientifically proven.

The order also bars the defendants from misrepresenting the status of any endorser, and requires them to disclose all material connections between them and anyone who endorses their products.

The settlement is the agency's second in five months related to Duncan's appearance on the Dr. Oz Show. In September 2014, the FTC settled charges it filed against Applied Food Sciences, Inc., the company that did the study upon which Duncan based his assertions.

The agency described the study as "so hopelessly flawed that no reliable conclusions could be drawn from it."

The agreement requires Duncan to make an initial payment of $5 million within two weeks of the court entering the settlement order.

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