Marketing Architects, Inc. (“MAI”), an advertising agency specializing in direct response radio and television ads, will pay $2 million in equitable relief to the Federal Trade Commission (“FTC”) and the Office of the Attorney General of Maine for allegedly creating and disseminating deceptive radio ads for weight-loss products AF Plus and Final Trim. The joint complaint alleges violations of the FTC Act and Maine’s Unfair Trade Practices Act, including false advertising, deceptive format, and failure to adequately disclose automatic enrollments in continuity plans.
MAI creates weight-loss ads for its client, Direct Alternatives (“DA”), such as Puranol, Pur-Hoodia Plus, PH Plus, Acai Fresh, AF Plus, and Final Trim. MAI previously created similar weight-loss radio ads for Sensa Products, LLC (“Sensa”), which was the subject of a similar FTC action in 2014. DA settled with the FTC and Maine for making false and unsubstantiated weight-loss claims and deceptively marketing risk-free offers two years later. The joint complaint against MAI alleges MAI had acknowledged receipt of the Sensa order and was also warned by DA and radio stations of the importance of substantiating health claims.
The order prohibits MAI from misrepresenting the existence or outcome of tests and studies, customer testimonials, the true nature of paid commercial advertising, and facts material to the sale of products related to return or cancellation policies, “free trials,” and auto-billing subscriptions. It also requires MAI to substantiate its weight-loss claims and to obtain express informed consent from consumers. MAI will deliver a copy of the order to all parties related to MAI and its advertising, marketing, distribution, and sale of dietary supplements, food, and drugs for the next twenty years.
Takeaway: The FTC occasionally brings joint enforcement actions with state attorneys general, so advertisers should be wary of violating “little FTC Acts” of states in addition to the FTC Act. In particular, advertisers should be especially cautious when making identical or similar claims for future clients that were previously found to be unsubstantiated in connection with former clients.