A company which sold what it claimed were weight-loss pills using fake reviews on Amazon has been given a suspended $12.8m fine by US regulators.
It is the first time that the Federal Trade Commission (FTC) has made a judgement against a company for hiring a marketing company to write fake reviews of its products on the online retail giant.
The business, Cure Encapsulations, and its owner, Naftula Jacobowitz, reached a settlement with the FTC to pay $50,000 due to its financial situation.
According to the FTC “if the defendants are later found to have misrepresented their financial condition” then the full $12.8m will become due.
As part of the settlement, the company admitted that it made false and unsubstantiated claims about its weight-loss supplement, and hired a marketing company to write and post fake reviews about the supplement on Amazon.
These claims included that the supplement is a “powerful appetite suppressant” and “literally BLOCKS FAT from forming”, which the FTC said was untrue.
The company is now banned from making these claims unless it has “competent and reliable scientific evidence in the form of human clinical testing supporting the claims”.