Won't get fauxed again

If you haven’t seen the ads, you’ve probably been too busy listening to eight-tracks and playing Pong because billions — with a capital B — have been served up online. They look like news investigations about acai berry weight loss products conducted by independent journalists for reputable news outlets featuring the logos of national media and follow-up comments by satisfied consumers.

Except that according to the FTC, they’re not news investigations. They’re not independent journalists. They’re not reputable new outlets. National media aren’t involved. And the consumer testimonials are fake. Oh, and did we mention the FTC’s alleged that the products won’t lead to the advertised weight loss results?

The 10-case law enforcement sweep announced today by the FTC — and an additional case filed by the Illinois Attorney General’s Office — targets the tactic of using fake news websites to market what the FTC says are bogus diet products. According to the FTC, marketers used sites with titles like “News 6 News Alerts,” “Health News Health Alerts,” or “Health 5 Beat Health News.” One example used the headline “Acai Berry Diet Exposed: Miracle Diet or Scam?” followed with text that read “As part of a new series: ‘Diet Trends: A look at America’s Top Diets’ we examine consumer tips for dieting during a recession.” The “article” that followed claimed to be the “reporter’s” first-hand experience with the product. Her initial journalistic skepticism was overcome when — surprise, surprise — she lost a substantial amount of weight in just a few weeks. The sites often include the names and logos of major media outlets like ABC, Fox News, CBS, CNN, USA Today, and Consumer Reports, suggesting that the reports had been broadcast on those networks or appeared in those publications.

So what’s really going on? According to the FTC, this is the latest wrinkle in a sales method known as affiliate marketing, a set-up whereby marketers are paid if their links drive traffic to sites where another company sells products. In the cases filed by the FTC, the sole purpose of the defendants’ websites is to promote the acai berry pills on behalf of another company. The defendants’ sites are designed to entice consumers to click on links that will transfer them to the merchant’s website. Defendants get a commission or other payment for each person who clicks on a link and ultimately buys the product or signs up for a “free trial.”

According to the FTC, the defendants have paid a total of more than $10 million to advertise their fake news sites and have likely taken in substantially more in ill-gotten commissions. To help online shoppers spot scams like this, the FTC has issued a consumer alert, THIS JUST IN: Fake News Sites Promote Bogus Weight Loss Benefits of Acai Berry Supplements.

Although this form of marketing is relatively new — and the FTC’s lawsuits remain pending — the cases reflect some well-settled truth-in-advertising principles. First, format matters. Of course, advertising claims can’t be false or misleading, but it’s also illegal for ads to mimic the look and feel of news programming or other independent content. Whether it’s 30-minute ads designed to look like news exposés or fake book reviews sent with a handwritten sticky note claiming to be from a friend, the FTC has challenged promotions that try to hide their commercial nature. Second, the scope of the FTC Act is broad. In appropriate cases the FTC has taken law enforcement action against marketers all along the chain of distribution. Whether you’re selling your own products or are involved in marketing others’ merchandise, it makes sound business sense to keep your distance from deception.