Tuesday was a terrible day for shady diets in America.
The Federal Trade Commission charged Sensa Products, L’Occitane, HCG Diet Direct and LeanSpa with fraud and the companies must collectively refund $34 million to their swindled customers. None of these diet businesses admitted or denied fault in their cases, according to the New York Times, but still…
The commission is also pitching a new practice to enlist media companies to help weed out fake diets by refusing their advertising dollars. I don’t know how effective that tactic will be in the long run, has the commission looked at the media industry’s shrinking budgets lately? But apparently it is already working.
The commission has seen “a significant reduction in the number of ads appearing” in major media outlets that screen advertising content before use, said Richard Cleland, an F.T.C. lawyer.
As part of the recent spate of cases, the commission noted that one marketer piggybacked on the reputation of well-known media outlets as cover for their claims.
For example, one television commercial for Sensa noted that Dr. Alan Hirsch, the creator of the product and a part-owner of the company, had “appeared on ‘Oprah,’ ‘Good Morning America,’ ‘Dateline,’ ‘Extra,’ the CBS ‘Early Show,’ CNN” and in hundreds of magazines and newspapers around the country.
In 2014 alone, consumers are projected to spend $66 billion on dieting products and memberships. And with that kind of money flying around there is bound to be some fraudulence, 13 percent to be exact in 2011. Under fantastically named investigations like “Operation Failed Resolution,” “Operation Big Fat Lie” and “Operation Waistline,” the FTC has been targeting suspected swindlers to keep overweight Americans safe for years, so today’s victory is just the latest in the fight.
Elsewhere, actress Octavia Spencer filed suit against Sensa last summer claiming the company still owes her $700,000 of her $1.25 million contract. The rub is, she was clear while pitching the company’s powdery product that she was a paid spokesperson, among other things — but Sensa isn’t fond of transparency. Remember that crazy looking “photo” of Millionaire Matchmaker‘s Patti Stanger? In fact, the FTC reprimanded Sensa for failing to disclose that doctors and customers who also promoted the product in advertisements were paid spokespeople.
The commission imposed a $46.5 million judgment on the company, which sold $364 million of Sensa in the United States from 2008 to 2012. But the company will remit little more than half the settlement amount “due to their inability to pay,” officials said. Sensa officials did not respond to phone calls seeking comment.
A decision was expected in December from a Los Angeles court in the Spencer v. Sensa case, however any official news has yet to be reported.