FTC Fines Amazon Merchant $12.8 Million for Fake Advertising and Paid Reviews

AlphaAtlas

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Yesterday, the U.S. Federal Trade Commission announced what it says is "its first case challenging a marketer's use of fake paid reviews on an independent retail website." The FTC claims that Cure Encapsulations, Inc. paid third party reviewers to write and post fake reviews on Amazon, and that they also made "false and unsubstantiated claims" about the weight loss supplement they were trying to sell. In addition to forcing the Amazon merchant to provide "competent and reliable scientific evidence" to back up the claims about the company's current and future products, the proposed FTC court order "imposes a judgment of $12.8 million, which will be suspended upon payment of $50,000 to the Commission and the payment of certain unpaid income tax obligations. If the defendants are later found to have misrepresented their financial condition to the FTC, the full amount of the judgment will immediately become due." Thanks to KitGuru for the tip.

"People rely on reviews when they’re shopping online," said Andrew Smith, Director of the FTC's Bureau of Consumer Protection. "When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules..." The FTC alleges that the defendants paid a website, amazonverifiedreviews(dot)com, to create and post Amazon reviews of their product. The FTC contends that Jacobowitz told the website's operator that his product needed to have an average rating of 4.3 out of 5 stars in order to have sales and to, "Please make my product … stay a five star." As described in the FTC's complaint, the reviews the defendants bought were posted on Amazon.com and gave the product a five-star rating. The complaint charges the defendants with representing that the purchased Amazon reviews were truthful reviews written by actual purchasers, when in reality they were fabricated.
 

TheOne&OnlyZeke

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So...pay half a mill, but they better fucking pray they disclosed their finances correctly or the giant fine dildo comes out of the closet to ream them

Good
 

jeffj7

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hopefully they will be going after more, im sure theres plenty on amazon alone
 

SomeoneElse

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Sucks for the people who bought the products under false pretenses....they won't see any refund or dime of the fine.
 

zkostik

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Sucks for the people who bought the products under false pretenses....they won't see any refund or dime of the fine.
Probably not but hopefully this will at least reduce their number. Far too many fake and misleading products on Amazon and they either can't or are unwilling to do much about it. I've lately been purchasing many things from other stores that are not marketplaces. Certain things are okay to get from Amazon but many electronics for instance are very likely to be fake and it's gotten very difficult to tell before actually purchasing the damn thing and something even after purchase.
 

mikeo

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Probably not but hopefully this will at least reduce their number. Far too many fake and misleading products on Amazon and they either can't or are unwilling to do much about it. I've lately been purchasing many things from other stores that are not marketplaces. Certain things are okay to get from Amazon but many electronics for instance are very likely to be fake and it's gotten very difficult to tell before actually purchasing the damn thing and something even after purchase.
Yeah, especially with microsd cards, tons of fake/counterfeit ones on there. At least the prime return policy is good.
 

sfsuphysics

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1 down... every other Amazon merchant to go.

Wonder why this company though, because they are making "medical" claims? Or some competitor selling the same shit with a different label snitched to the FTC?
 
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PaulP

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Need a lot more this kind of enforcement action. Maybe if a 1000 more companies are fined, it would help tamp down on the review deceit, but the fines have to string; letting them off for 50 grand and some past due taxes is not enough.
 

Nukester

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Make scamming people by email/phone or letter a life sentence. It's so bad.
 

YeuEmMaiMai

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eheheheh article said inflate eheheheheh as for the large dildo coming... it's named the IRS...
 

Spidey329

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1 down... every other Amazon merchant to go.

Wonder why this company though, because they are making "medical" claims? Or some competitor selling the same shit with a different label snitched to the FTC?
https://web.archive.org/web/2016060...gia-extract-Clinically-capsules/dp/B00BMROUHY

My guess, it was the stuff like this:

" The ONLY Product with 100% Scientifically Reviewed Garcinia Combogia Extract. "

Supplements are a gray area and often get away with a lot, as long as they don't make statements of fact.

Most people don't realize that supplements aren't regulated like food/drugs. As long as it's not a known harmful chemical, it can be a 100% marketing play. It can literally be guys in their kitchen filling caps with no health controls. Whether it's just a inert filler or an actual ingredient is a toss up. It's absurd to me that it wouldn't at least fall under the FDA as a "food" item, since it's something you eat.
 
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nightfly

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About time the government went after false advertising!
Never happen. They even tried to get rid of the consumer protection folks over the holidays back in 2016-2017 in a 'closed door' meeting.
1 down... every other Amazon merchant to go.

Wonder why this company though, because they are making "medical" claims? Or some competitor selling the same shit with a different label snitched to the FTC?
Look no further than the famous 'Doctors' daytime TV show to find physician hucksters trying to sell the public snake oil. Dr Oz himself. Conning the public is big business, and as everybody knows, America is business friendly, and the consumer can go suck it. Let me know when the TV and radio commercials stop with the whispering fast talk at the end to say the disclaimers for everything the commercial actually said.
 

GoldenTiger

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Amazon combines stock sold by Amazon with stock from 3rd party Prime vendors.
Yep. They comingle inventory with 3rd party fulfilled by Amazon stock. Ships from and sold by Amazon isn't even safe anymore really.
 

zkostik

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Yeah, especially with microsd cards, tons of fake/counterfeit ones on there. At least the prime return policy is good.
Yes, but you still had to take this crap to a UPS location. I've been just getting this stuff from BH Photo and they are genuine. Same goes for laptop batteries among things.
 
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mikeo

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Yes, but you still had to take this crap to a UPS location. I've been just getting this stuff from BH Photo and they are genuine. Same goes for laptop batteries among things.
Yeah, I've been shopping at B&H a lot more lately too.
 

Zareek

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Never happen. They even tried to get rid of the consumer protection folks over the holidays back in 2016-2017 in a 'closed door' meeting.

Look no further than the famous 'Doctors' daytime TV show to find physician hucksters trying to sell the public snake oil. Dr Oz himself. Conning the public is big business, and as everybody knows, America is business friendly, and the consumer can go suck it. Let me know when the TV and radio commercials stop with the whispering fast talk at the end to say the disclaimers for everything the commercial actually said.
Not completely true, the FTC has actually stepped up their game in recent years. Example putting companies on notice that warranty void stickers are unenforceable. I know, I was surprised the government is extremist pro-business for the most part.
 
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