The FTC has come to a settlement with three parties accused of sending spam mails to lure in consumers. The FTC’s complaint alleges that the parties were engaged in sending unsolicited, spam emails that were made to look like they were sent by friends or family members to sell their products.
Weight-loss products, including Mango Boost Cleanse and Original Pure Forskolin, were part of the products sold through the fraudulent methods.
The parties also promoted their products through “affiliate” marketers who also engage in activity deemed “spam” in many cases.
The FTC prohibits Illegal advertising and marketing activities. Tachht, Inc., Teqqi, LLC and Colby Fox, along with a fourth defendant, were all part of the lawsuit. The lawsuit alleges the emails were sent to millions of consumers, often from hacked accounts, that appear to be a link or message from a person the recipient knows.
Links inside the email linked consumers to the defendants’ products. The landing pages for the products further deceived consumers with false claims that the products could help users lose 17 pounds in just four weeks.
Misrepresentation of the products was also rampant. False and unsubstantiated claims of celebrities endorsing the products was also used to sell the products. Oprah Winfrey’s name was used to try and sell the weight loss products to victims.
The FTC alleges that the activities of the defendants went against the FTC Act and the CAN-SPAM Act.
Affiliate marketers that utilized the spam tactics were paid when a product was sold by the company. Email marketing is not against FTC rules and regulations as long as the recipient opts into the company’s list and has a way to unsubscribe at any time.
The settlement ended with the defendants owning $1.3 million dollars in a judgment. The judge will partially suspend the payment when $500,000 is paid to the FTC. The remaining balance will be required if the defendants were found to lie about their financial condition.
Christopher Reinhold is the fourth defendant who is still in the litigation process.
The defendants were ordered to stop misrepresenting their products or programs and to stop aiding in affiliates or other misrepresenting products. Testimonials placed on the defendants’ websites must be verifiable and reflect a typical consumer experience.
Claims related to refunds and cancellations must also be properly represented, according to the order. The defendants have been ordered to properly monitor their affiliates in the future and bar them from violating FTC CAN-SPAM Act regulations.
Spam emails are common on the Internet, with many service providers and email hosts blocking spam through automated measures. A new spam campaign presented this week was an effort to do something a little different than buy products or download malware.
The new spam tactic is to sell shares in a particular company. The mails state that the stock is going to gain 10 times its value. Altering stock prices through mass purchasing of a stock will allow a spammer that owns the company’s stock to sell when the price is much higher.
Pump and dump scams inflate a stock price over the short-term, as the scammer sells their stock off at a profit.