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FTC, Madigan Sue Açai Berry Marketing Websites

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Acai Berry supplements. (Credit: CBS)

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UPDATED 04/20/11 10:09 a.m.

CHICAGO (CBS/WBBM) – Those “news” websites claiming you can lose 25 pounds in a month with açai berry diets are actually advertisements disguised to appear as legitimate news, according to federal and state authorities.

LISTEN: Newsradio 780’s Bernie Tafoya reports

The Federal Trade Commission on Monday asked federal courts in 10 separate cases, including four filed in Chicago, to halt the “misleading practice” of marketers who use fake news websites to sell açai berry weight-loss products.

Illinois Atty. Gen. Lisa Madigan said in a related announcement that her office has filed suit in Cook County Circuit Court against a south suburban man for fraudulently marketing açai berry diets and other products online.

The federal suits claim the defendants operate websites meant to appear as if they belong to legitimate news-gathering organizations, but in reality are ads aimed at enticing consumers to buy products from other merchants.

“Almost everything about these sites is fake,” said David Vladeck of the FTC’s Bureau of Consumer Protection said in a statement. “The weight loss results, the so-called investigations, the reporters, the consumer testimonials, and the attempt to portray an objective, journalistic endeavor.”

The complaints allege the typical fake news sites have titles such as “News 6 News Alerts,” “Health News Health Alerts” or “Health 5 Beat Health News”; and include the names and logos of major media outlets – such as ABC, Fox News, CBS, CNN, USA Today or Consumer Reports –- and falsely claim that the reports were seen there.

An investigative-sounding headline on one such site proclaims “Açai Berry Diet Exposed: Miracle Diet or Scam?” The article purports to document a reporter’s first-hand experience with açai berry supplements -– typically claiming to have lost 25 pounds in four weeks.

Both the federal and state complaints ask the courts to permanently bar the allegedly deceptive claims; to require the companies to provide refunds to consumers who purchased the supplements and other products; and pay fines.

The FTC claims the defendants post attention-grabbing ads on search engines and high volume websites, driving traffic to the fake news sites and ultimately to sites where products are sold. Such ads have appeared on numerous websites.

According to the FTC, the defendants collectively have paid more than $10 million to advertise their fake news sites, and have likely received well in excess of that amount in ill-gotten commissions.

The agency has received numerous complaints from consumers who paid between $70 and $100 for weight-loss products.

Reporters or commentators pictured on the sites are fictional and have not conducted the tests or experienced the results described, the complaint alleges, and the “comments” following the reports are simply additional advertising content, not independent statements from ordinary consumers.

The FTC filed the 10 complaints, including four in Illinois against:
— Beony International LLC, Mario Milanovic, and Cody Adams;
— Zachary S. Graham, Ambervine Marketing LLC, and Encastle Inc.;
— Intermark Communications Inc. also doing business as Copeac, and IMM Interactive;
— Ricardo Jose Labra and Thou Lee, also doing business as TL Advertising.

Madigan filed suit in Cook County against Ishmael Lopez Jr. of Sauk Village for websites featuring fake news articles advocating acai berry diet products and other items, ranging from bodybuilding supplements to teeth-whitening agents.

“Consumers across the country visit these fake marketing sites that are carefully – and illegally – disguised to represent professional news organizations, only to wind up unknowingly debited for extra diet products,” Madigan said. “These Internet con artists are profiting from purposely deceptive marketing ploys.”

Madigan’s suit alleges consumers are automatically enrolled in a subscription that charges for additional products — unless they cancel within a 14-day period. Consumers are not notified of the cancellation requirement.

Derived from açai palm trees native to Central and South America, açai berry supplements are often marketed to consumers who hope to lose weight.

In 2010, the FTC filed an action against marketer Central Coast Nutraceuticals for deceptively marketing acai berry supplements as weight-loss products, and “colon cleansers” as an aid for preventing cancer. The fake news sites make very similar claims, according to the FTC.

CBS 2’s Roseanne Tellez reported that personal trainer described açai berries as being “like a superfood,” and an ad said they were “scientifically proven to help people lose up to five times their body fat.” But the products didn’t work, and consumers ended up being charged full price for what they thought was a free trial offer.

One of the deceptive products targeted by the FTC were advertised as having been endorsed by Rachael Ray and Oprah Winfrey, both of whom offered up statements to the FTC saying they never endorsed any açai product.

The Sun-Times Media Wire contributed to this report.

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