The Federal Trade Commission (FTC) has accused Amazon seller Cure Encapsulations and it owner, Fatula Jacobowitz of paying websites to write favorable, fake reviews for one of its products, a weight-loss supplement.
“People rely on reviews when they’re shopping online,” Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, has said “When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”
The FTC asserted that the defendants had paid the website amazonverifiedreviews.com to post fake feedback of their product and that Jacobowitz had told the website’s operator that the product in question had to have an average rating of around 4.3 stars (out of 5) in order to get it to sell and was quoted as having told the operator “Please make my product … stay a five star.”
In addition to the fake reviews, FTC also claimed that unsubstantiated claims were made about the product on the Amazon page. More specifically, that their ‘garcinia cambogia’ product can ‘block fat from forming, causes significant weight loss […] and causes rapid and substantial weight loss, including as much as two or more pounds per week‘.
The commission managed to impose a judgment of $12.8 million on the defendants, which will be suspended on a $50,000 payment to the FTC
‘and the payment of certain unpaid income tax obligations’. But, if the company chooses to violate the terms of the settlement, it will have to pay the sum in its full, immediately.
In addition to the fine, Jacobowitz and the company also have the obligation of contacting all the previous, actual buyers and inform them that the FTC has questioned the efficacy of their product. As far as the fake reviews go, the company has to identify every single one of them and inform Amazon about them.
The company will also not be allowed to manufacture the Quality Encapsulations Garcinia Cambogia capsules or any other similar type of product (‘weight-loss, appetite-suppression, fat-blocking, or disease-treatment claims for any dietary supplement, food, or drug‘) unless it actually manages to provide scientific evidence that can back up the claim that the supplement works in the way it has been described to.
It’s well-known by now that Amazon has been leading an uphill battle against fake reviews and has filed numerous lawsuits against the websites that provided and continue to provide them but, finally, with this win, it looks like things might be going in the right direction.
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