DTC Advertising

Ad Agency on Hook for $2 Million for Deceptive Weight-loss Promotions

Feb. 12, 2018 – The Federal Trade Commission (FTC) and the Maine Attorney General announced a $2 million settlement Feb. 6 against Marketing Architects Inc., an ad agency that “created and disseminated allegedly deceptive radio ads for weight-loss products marketed by its client, Direct Alternatives,” according to the FTC. Marketing Architects also provided interactive voice response telemarketing support for sales.

The FTC/Maine AG joint complaint alleges that the radio ads from Marketing Architects had false or unsubstantiated weight-loss claims for AF Plus and Final Trim, even though the agency had previously been made aware “of the need to have competent and reliable scientific evidence to back up health claims” following a prior complaint filed by the FTC in 2014 regarding weight-loss ads for the Direct Alternatives product Sensa.

“While the allegations here describe a litany of irresponsible behavior by everyone involved in making and distributing these advertisements, the joint action by the state and the FTC should remind every agency and mass medium outfit to be on the lookout for false claims by advertisers,” said Coalition for Healthcare Communication Executive Director John Kamp.

In a Feb. 7 blog post, FTC Senior Attorney Lesley Fair remarked that “We haven’t tried bullhorns or signal flares yet, but aside from that, it’s tough to imagine a tactic the FTC hasn’t taken to warn businesses about the risks of involving themselves in deceptive weight-loss promotions.”

The complaint also states that Marketing Architects “developed and disseminated fictitious weight-loss testimonials and created radio ads for weight-loss products falsely disguised as news stories” and created inbound call scripts that failed to adequately disclose that consumers would be automatically enrolled in auto-ship programs.

Fair shared the key messages for advertisers and ad agencies as a result of this settlement:

  • Relying on a “But we are not the advertiser” defense is a dubious strategy;
  • Ads promoting fast, easy weight loss are invitations to investigate; and
  • The fastest way to arouse consumer ire: Charge their credit cards without express authorization.

In addition to the $2 million judgment, the proposed court order bans Marketing Architects from making any of the seven “gut check” weight-loss claims:

  • Causes weight loss of two pounds or more a week for a month or more without dieting or exercise;
  • Causes substantial weight loss no matter what or how much the consumer eats;
  • Causes permanent weight loss;
  • Blocks the absorption of fat or calories to enable consumers to lose substantial weight;
  • Safely enables consumers to lose more than three pounds per week for more than four weeks;
  • Causes substantial weight loss for all users; or
  • Causes substantial weight loss by wearing a product on the body or rubbing it into the skin.

“Essentially, the rule of law is whether the agency or medium ‘knew or should have known’ that the claim was false or misleading,” Kamp advised. “It’s especially dangerous for agencies or media to participate in the making and dissemination of known false claims,” he said. “Although rare, cases like this can come with stiff fines, heavy legal fees and serious damage to your reputation.”

The FTC notes in its press release that the $2 million judgment in this case is among the “largest-ever obtained by the FTC against an ad agency.”