A federal court in Florida has ruled in favor of the Federal Trade Commission and the Florida Attorney General, and ordered the marketers of a phony alcoholism "cure" program to pay more than $700,000 for having tricked consumers into paying hundreds or thousands of dollars to participate in the program.
The court also found the company and Krotzer falsely claimed that their program cost about $350 and consumers could cancel anytime, that consumers would be monitored by trained professionals, and that the defendants would keep consumer information private. When consumers tried to cancel their memberships, the defendants “routinely used disclosure of personal and health information as a threat to extract payment” and made “impossible demands” that consumers submit so-called “proofs of continued drinking,” including expensive lab test results and hair samples. The defendants also charged consumers’ financial accounts for fees they supposedly owed – ranging from $9,000 to $20,000 – without authorization. After threatening to disclose consumers’ alcohol dependence, the defendants actually did so in some cases: by telling PayPal, credit card companies, and the Better Business Bureau; by filing the information publicly in Florida small claims court; and by exposing the entire database of consumer information to the debt collectors they hired to pursue the fees.
The court’s final order permanently bans the defendants from marketing or selling any treatment or cure for alcoholism, drug addiction, or any other human health-related problem. The final order also prohibits the defendants from using trade names such as “alcoholism cure” or “permanent cure,” from unauthorized billing, and from taking any further collections actions against their victims. The defendants also may not misrepresent the cost or terms of any offer they make, the professional qualifications of Krotzer or any employee, or that the company is a charity. Finally, the order requires the defendants to pay $732,480, to be used for consumer refunds, if practical.
The FTC would like to thank its law enforcement partner, the Florida Attorney General’s Office, for its assistance in this case.
Consumers should carefully evaluate advertising claims for dietary supplements. For more information see: Miracle Health Claims: Add a Dose of Skepticism.
The complaint was filed in the U.S. District Court for the Middle District of Florida, Jacksonville Division, on March 29, 2010. The court entered a summary judgment against the defendants on September 16, 2011, finding for the FTC and the State of Florida on every count. On July 3, 2012, the court entered the final judgment and order.
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