Pull the Other One, FTC Tells SoCal Marketer

CHICAGO (CN) - A Southern California man created fake news websites mimicking names and logos of major networks to push acai berry and other products for merchants, the FTC says in Federal Court.

The Federal Trade Commission sued Coleadium dba Ads4Dough and its owner, Jason Akatiff, of Carlsbad, Calif.

Akatiff and contracts with merchants to push their products nationwide, and since 2008 has touted acai berry and "colon cleanse" products through websites designed to look like news reports, the FTC says.

"These sites use domain names such as nbcreports.com, usahealthnewstoday.org and usahealthreportstoday.org, and mastheads such as 'MSNBC' and 'USA Health News.' The reports have titles such as 'Which Acai Berry product is the best for you?' and 'Acai Berry Products Reviewed Most Effective Ones Found.' The sites often include the names and logos of major broadcast and cable television networks, falsely representing that the reports on the sites have been seen on these networks," the FTC says in its complaint.

The complaint continues: "The sites purport to provide objective investigative reports authored by reporters or commentators often pictured on the sites. The supposed authors of the reports claim to have tested the products on themselves or others with dramatic and positive results. Often following the reports are 'comments' that appear to be independent statements made by ordinary consumers.

"In fact, the news reports are fake. Reporters or commentators pictured on the sites are fictional and never conducted the tests or experienced the results described in the reports. The tests and results described on the sites never happened."

The websites claim that "persons who tested the Acai Berry Products and Colon Cleanse Products, alone or in combination, lost twenty-five pounds or more in four weeks without any special diet or intense exercise," the FTC says.

But, "In truth and in fact, the Acai Berry Products and the Colon Cleanse Products, alone or in combination, do not cause rapid and substantial weight loss, nor do defendants or their affiliate marketers possess and rely upon a reasonable basis to substantiate representations that consumers who use the Acai Berry Products and the Colon Cleanse Products, alone or in combination, will rapidly lose a substantial amount of weight," the complaint states.

The fake news websites are designed with links that transfer them to a merchant's website. "Defendants receive a commission or other payment for each consumer who clicks on a link and ultimately makes a purchase or signs up for a 'free trial' on the merchant's website," the FTC says.

"Defendants, through their affiliate marketers, have failed to disclose in a clear and conspicuous manner that they are not objectively evaluating the advertised products and, in fact, are being paid to promote the products. ...

"Defendants, through their affiliate marketers, also have failed to disclose in a clear and conspicuous manner that consumers who do not affirmatively cancel within the trial period will be charged for the free trial samples, usually between $60 and $100 (or double the total if they order two trial products), and that consumers who order the trial samples are also automatically enrolled in a monthly continuity plan and charged each month for recurring shipments of the products," according to the complaint. (Parentheses in original.)

The FTC seeks an injunction and damages for false and unsubstantiated claims, misrepresentation and failure to disclose.

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