FTC imposes $6.5 million penalty on supplement outliers for making false claims
WASHINGTON — The final three of nine defendants sued for deceptively marketing dietary supplements will settle charges that the Federal Trade Commission and the State of Maine had filed in February 2017. The agencies charged the defendants with using deceptively formatted radio infomercials and print ads with fictitious endorsers to pitch products they claimed would improve memory and reduce back and joint pain.
The proposed orders announced Wednesday bar Synergixx, an ad agency, and its principals Charlie Fusco and Ronald Jahner from engaging in a wide range of marketing practices that have caused financial injury to consumers.
The FTC and State of Maine charged all nine defendants with making false and misleading claims about the supplements CogniPrin and FlexiPrin. The claims include that CogniPrin reverses mental decline by 12 years; improves memory by 44%; and improves memory in as little as three weeks and is clinically proven to improve memory. For FlexiPrin Synergixx advertised it reduces joint and back pain, inflammation and stiffness in as little as two hours; rebuilds damaged joints and cartilage; and has been clinically proven to reduce the need for medication in 80% of users and to reduce morning joint stiffness in all users.
According to the complaint, Synergixx and Fusco promoted CogniPrin and FlexiPrin through 30-minute radio ads that were deceptively formatted to sound like educational talk shows. The complaint also alleges that Synergixx and Fusco created inbound call scripts that deceptively claimed that consumers could try the supplements “risk-free” with an unconditional 90-day money-back guarantee, without disclosing requirements for obtaining refunds and making product returns.
The complaint also alleges that the defendants failed to disclose that consumers would have to enroll in an auto-ship continuity plan to qualify for the “risk-free” trial offer, and would have 14 days or less to try the products. It also charges Synergixx and Fusco with failing to make important disclosures when they “up-sold” consumers negative option buying clubs and discount medical programs with ongoing fees, charging many consumers for poorly disclosed auto-ship continuity plans they did not want.
In addition, Jahner, whom defendants presented as an objective medical expert, was charged with providing endorsements without examining the products or exercising his represented expertise. The defendants also allegedly failed to disclose that he was paid a percentage of FlexiPrin and CogniPrin sales revenues.
The two orders announced today settle the charges against Synergixx, Fusco and Jahner, and bar them from making the false or unsubstantiated health claims challenged in the complaint, require them to have competent and reliable scientific evidence when making health-related claims and require them to clearly disclose their material connections between product sellers and product endorsers.
The defendants are also barred from misrepresenting the existence or outcome of tests and studies when they promote health products. Additionally, defendants Synergixx and Fusco are barred from employing deceptive marketing practices relating to cancellations, negative-option payment plans, upsold merchandise and deceptive pricing practices.
The order against Synergixx and Fusco also requires that when they sell products through continuity programs, they must obtain customers’ express informed consent prior to enrolling consumers into such plans, including free-trial offers that convert to continuity programs at the end of the trial period. Finally, the order against Synergixx and Fusco imposes a $6.5 million monetary judgment that is suspended based on their inability to pay.