Weight-loss supplement maker must pay for false claims and fake reviews

Wincing the Weight Away

When the Federal Trade Commission (FTC) sued Brooklyn, NY-based Cure Encapsulations Inc. and its owner, Naftula Jacobowitz, it hit the defendants with two separate issues related to its “Quality Encapsulations Garcinia Cambogia Extract with HCA” product, which is considered a diet supplement.

First, the FTC maintains that Jacobowitz’s claims that the supplement acts as a “carb-blocker,” an appetite suppressant and a weight-loss supplement are false and unsubstantiated. Notably, there has also been discussion among laypersons online about the plant in question, garcinia cambogia, and the effects that the plant’s extract can have on weight loss for consumers. Second, the FTC alleged Jacobowitz purchased fake reviews for the product being sold on Amazon.

Love for Sale

Importantly, this February 2019 complaint is the FTC’s first suit brought against a company for buying fake reviews.

Specifically, the FTC produced an email that Jacobowitz allegedly sent to the website amazonverifiedreviews.com: “As I told you yesterday, I need 30 reviews 3 per day… The goal of my competition is to bring me down to a 4.2 overall rating, and I need to be at 4.3 overall in order to have the sales.”

Shortly thereafter, he allegedly wrote again, “Please make sure my product should stay a five star.”

The FTC has provided transcripts of the alleged fake ads, which were mailed from amazon-verifiedreviews to Jacobowitz.

The Takeaway

In addition to the false and unsubstantiated efficacy claims regarding weight loss, the FTC hit Jacobowitz with false endorsement claims, and is seeking a permanent injunction against future unsubstantiated claims and fake reviews.

As is common in these cases, the defendants settled quickly. In addition to a $12.8 million judgment and the standard prohibitions against the illegal behavior, Jacobowitz is required to “notify Amazon, Inc. that Defendants or their agents purchased reviews of Quality Encapsulations Garcinia Cambogia Extract with HCA sold by Defendants and appearing on the www.amazon.com website.”

Moreover, Jacobowitz is also required to email a detailed summary of the FTC’s critique of its weight-loss-related claims to consumers who bought the supplements. As businesses will continue to sell and market their products to online customers, customers can be expected to continue to put value in online reviews and ratings that appear to be from other customers for these products. Accordingly, the FTC can be expected to police reviews and take action with respect to unsubstantiated health claims and fake reviews for the products on these online platforms.

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