Following from the settlement of this action in 2017, the FTC has just announced that it is mailing nearly $2 million in checks to Pittsburgh area consumers who had purchased the NutriMost Ultimate Fat Loss System between 2012 and 2016. Each consumer will receive over $500 as a refund.
This action involved the marketing of a weight loss "system" purporting to allow consumers to lose a substantial amount of weight safely and quickly without following a restrictive diet. Defendants offered the NutriMost System from eight locations in the Pittsburgh area and sold the NutriMost System and related weight loss and health products to consumers nationwide. Defendants also licensed and/or franchised the NutriMost System to chiropractors and other licensed professionals nationwide, and provided the licensees and franchisees with advertising materials, and products, among other things, to enable them to market and sell the NutriMost System to the public through their own practices.
According to the FTC's complaint, defendants' weight loss claims were not supported by reliable clinical evidence. Indeed, the complaint alleges that defendants conducted no scientific research to support their claims.
In addition, the FTC alleged that the defendants used endorsements and testimonials for the system without disclosing that the endorsers had material connections to the defendants or their franchisees. For example, some of the testimonials were from franchisees' spouses or other family members or their employees. In addition, the defendants allegedly required buyers to sign a contract agreeing not to make any negative statements or comments about the system, or face a very substantial financial penalty.
The defendants also authorized their licensees and franchisees to use the NutriMost System, including its technology, products, and materials; provided them with training and support; and allowed them to use the NutriMost System marketing and advertising materials. Defendants also have provided their franchisees with sales and refund agreements to use with consumers that contained the non-disparagement clause described above.
This action highlights the FTC's ongoing interest in deceptive weight loss marketing (a perennial favorite), as well as phony endorsements and customer review suppression.
The order prohibits the defendants from using deceptive endorsements in their marketing materials and from including non-disparagement clauses in their contracts. It also bars them from providing others with the means of making deceptive statements regarding weight-loss products or programs. Finally, it imposes a $32 million judgment against the defendants, which will be suspended based on defendants’ financial condition after they pay $2 million for consumer refunds.