The Federal Trade Commission settled its first groundbreaking case against an online company for using fake, paid advertisements to sell weight-loss pills on Amazon, resulting in a $12.8 million fine.
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On Tuesday, the FTC announced that it had settled a case with Cure Encapsulations and owner Naftula Jacobowitz after the company paid a website -- amazonverifiedreviews.com -- to create and post positive reviews of their product, a purported appetite-suppressing, fat-blocking, weight-loss pill called garcinia cambogia.
“People rely on reviews when they’re shopping online,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement. “When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”
In charges filed on Feb. 19, the FTC alleged that the New York-based company made “false and unsubstantiated claims” on their Amazon page, including through purchased reviews, that their pill is a “powerful appetite suppressant,” “literally BLOCKS FAT from forming” and causes significant weight loss.
Included in the complaint is an email sent from Jacobowitz to the operator of amazonverifiedreviews.com requesting an average rating of 4.3 out of 5 stars in order to have sales and to “please make my product...stay a five star.” The website is no longer accessible.
Now, Cure Encapsulations will be required to alert customers who bought the product about the FTC allegations, and notify Amazon that they purchased fake reviews (and identify those reviews).
In a statement to FOX Business, an Amazon spokesperson said the company “welcomes the FTC’s work in this area.”
“Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers,” the spokesperson said. “Even one inauthentic review is one too many.”