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June 3rd, 2011
FTC Brings First Enforcement Action Against a Consumer
The Federal Trade Commission ("FTC") recently announced that it reached a settlement with a consumer who provided an allegedly false testimonial in an infomercial for the "wealth-building" program "Winning in the Cash Flow Business" (the "Wealth Program"). The FTC, jointly with Colorado’s Attorney General, alleged that various parties involved in the marketing of the Wealth Program defrauded customers, in some cases out of thousands of dollars, with phony claims that they could make large amounts of money quickly and easily by finding, brokering, and earning commissions on seller-financed promissory notes.
The FTC alleged that the Wealth Program was marketed primarily through a 30-minute infomercial, which claimed that consumers could successfully earn substantial income brokering promissory notes in three easy steps. These claims were allegedly supported by testimonials from consumers who claimed to have made, "$1.2 million in 30 days," "$79,000 in a few hours," and "$262,216 part time," for example.
As part of its enforcement action, the FTC charged one consumer with making false claims about how much she earned by participating in the Wealth Program. The consumer has agreed to an order settling the FTC charges against her. The order is the FTC's first against a consumer charged with making misrepresentations in a testimonial.
If you have any questions about the FTC’s announcement, please contact Jeffrey A. Greenbaum at (212) 826 5525 or firstname.lastname@example.org, Terri Seligman at (212) 826 5580 or email@example.com, or any other member of the Frankfurt Kurnit Advertising Group.
Other Advertising Law Alerts
The Truth Will Set You Free: The FTC Provides New Guidance on Consumer Reviews
Late last year, Congress passed the Consumer Review Protection Act, a law designed to stop businesses from using contracts to prevent customers from posting honest reviews about the business.
March 8 2017
FTC Finds “All Natural” Claim Violated FTC Act
The FTC has issued a Final Order against California Naturel, Inc., a seller and marketer of personal care products, finding that the company's "all natural" claims were false and misleading in violation of the FTC Act.
December 15 2016
FTC Policy Statement Focuses on Homeopathic Health Claims
Last week, the Federal Trade Commission issued its new "Enforcement Policy Statement on Marketing Claims for Over-the-Counter (OTC) Homeopathic Drugs," as well as a staff report on a workshop that the Commission held last year on OTC homeopathic drug advertising.
November 28 2016