dollar_sign1Despite the Federal Trade Commission’s (“FTC”) recent focus on unsolicited telemarketing campaigns, it has not backed off in its effort to reduce deceptive marketing campaigns.  On October 21, 2013, the Federal Trade Commission (“FTC”) filed a complaint against several sellers of human chorionic gonadotropin (“HCG”), claiming that deceptive marketing techniques were used to market the drug as dietary supplements.  Specifically, the FTC alleges that Kevin Wright, through his company HCG Platinum, which sells its products through its website, as well as at retail locations such as GNC, Walgreens and Rite Aid, has been falsely promoting HCG as a “homeopathic” way for consumers to lose a substantial amount of weight.  Specifically, HCG Platinum allegedly claimed that its product will cause rapid and substantial weight loss, equal or greater to those depicted in their marketing materials.

Previous Deceptive Marketing Warning Letters

This is not the first time that Mr. Wright has caught the attention of the FTC.  In November of 2011, Mr. Wright and six (6) other HCG dietary supplement marketers received letters from the FTC warning them that by selling drugs that have not been approved by the FDA, they are violating various federal laws. The letters also cautioned that making unsubstantiated dietary claims violates the FTC Act, unless there is competent and reliable scientific evidence supporting those claims. Furthermore, the FTC pointed out that the HCG product’s label, which directs consumers to use the product in conjunction with a very low calorie diet, puts consumers at increased risk for side effects associated with HCG products, including gallstone formation, electrolyte imbalance and heart arrhythmia. The FTC’s letters also specifically stated that Mr. Wright and the other recipients of the letters had fifteen (15) days to notify the FDA of the steps that they had taken to correct the violations cited, warning that the failure to do so may result in legal action, including seizure and injunction, or criminal prosecution.

Details of FTC Deceptive Marketing Case

Despite receiving the FTC warning letters, Mr. Wright and his company, HCG Platinum, continued to advertise and sell HCG products claiming to be dietary supplements in retail stores and online.  According to the FTC complaint, HCG Platinum sold more than $13 million worth of HCG products through use of deceptive advertising since receiving the FTC’s warning letter.  In addition to penalties, the FTC requesting that the court order HCG Platinum to surrender all ill-gotten gains resulting from the deceptive marketing practices outlined above.

If you are interested in learning more about this topic or need to review your marketing practices, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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