It is a problem old as time – false advertisement or deceptive marketing practices. The Bible tells us that when Satan, appearing to Eve as a snake, deceived her into eating the fruit of the Tree of Knowledge. She did so even though God told Adam and Eve they could eat fruit from any tree, but that particular tree.
Similarly, National Public Radio (NPR) recounts how a legitimate medicine brought to the U.S. in the 1800s by Chinese immigrants working on the Transcontinental Railroad eventually became the symbol of fraud. The Chinese medicine, “snake oil,” was derived from the fat of the Chinese water snake. The same oil helped ease tired muscles and aching joints of weary Chinese laborers.
As word spread about the powerful medicine’s benefits, an enterprising cowboy, Clark Stanley, seized his opportunity to swindle many consumers. Stanley created his own snake oil. He demonstrated a process and led customers to believe was his process for creating the oil. Yet, in 1917, federal investigators seized some of the salesman’s oil and found that it did not contain any snake oil at all. The federal government fined Stanley $20 (about $429 today) for “misbranding” his product and “falsely and fraudulently represent[ting] it as a remedy for all pain.”
The Federal Trade Commission (FTC) has been working to reign in advertisers that use fake news advertising – a refined approach to deceptive marketing. In 2014, the FTC sued Pure Green Coffee and other companies that were using the deceptive marketing practices similar to the one Stanley used 100 years ago with his fake snake oil. Most of the companies settled out of court in 2015 agreeing to pay restitution in the amount of $30 million; however, Law360 notes that almost all of the judgment was suspended based on the company’s inability to pay. One defendant, Nick Congleton, opted to take his case to court.
Late last year, the U.S. District Court for the Middle District of Florida Tampa Division reinforced the FTC efforts to stop fake news advertising. It found Congleton, the pitchman behind Pure Green Coffee Extract, and his various businesses including Florida-based NPB Advertising, Inc., misled consumers with false weight-loss claims, phony testimonials and fake news websites to exploit the latest diet craze.
The supplement became popular after Dr. Mehmet Oz overstated its benefits on his show, “The Dr. Oz Show.” Congelton and co-Defendants used information from the show as a basis for their marketing pitch. However, they did not realize the information was unconfirmed and they failed to conduct the clinical trials required by the FTC to substantiate the weigh-loss claims. Further, the Defendants created fake news websites to promote the product and to make it appear as legitimate news. A report by LegalNewsLine said “[t]he scheme included using mastheads on [sic] fictitious news outlets, along with logos from actual news sites, to attempt to trick consumers.”
Following the ruling, the FTC announced that it was pleased the court shut down Congleton’s scheme and explained that this case demonstrates how seriously it takes such cases and the extent it will go to pursue justice. It’s time for the modern-day snake oil salesmen to be put out of business. That is the joint responsibility of the government agencies and the judicial system. Hopefully, the federal government will continue to do its part.
Sources: Law360.com and Federal Trade Commission
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