Açaí berry weight-loss scammer hit by FTC

Açaí berry weight-loss scammer hit by FTC

An açaí weight-loss marketer accused of defrauding U.S. consumers of upwards of $25 million had its operations halted and assets frozen by FTC this month. What impact would the scandal have on the legitimate açaí market?

On Dec. 1, the Federal Trade Commission (FTC) announced that it had filed a court order together with the State of Connecticut to halt an Internet operation that runs bogus news sites featuring fake stories about açaí weight loss pills. The fake news sites are promoted on banner ads and web page links by affiliate marketers and eventually link to supposedly free trials for açaí supplements—though many consumers complained of unwittingly paying $79.99 for monthly shipments. FTC asserts that the scam’s perpetrators have defrauded customers of over $25 million.

The court order placed an injunction on the operations of Boris Mizhen, owner of LeanSpa LLC, NutraSlim LLC and NutraSlim U.K. Ltd., the companies responsible for the scam. The companies operate with various websites—such as TryLeanSpa.com, TryNutraSlim.com and TryQuickDetox.com—which are linked to various fake news websites—including channel8health.com, dailyhealth6.com and online6health.com—run by affiliate marketers. The news websites feature fake investigative reports with titles like "Açaí Berry Diet Exposed: Miracle Diet or Scam?" and employ logos from credible news sources such as CNN and MSNBC.

FTC had announced its intent to crack down on these açaí weight-loss supplement sellers last spring, filing 10 different complaints against the affiliate marketers themselves. At the time, an FTC attorney asserted that “tens of billions” of these false advertisements were present across the internet. This court order appears to be the first instance of an actual supplement seller getting burned.

What does FTC's crackdown mean for açaí?

The subtle genius of the açaí weight-loss scam is that it preys on consumers’ existing skepticism toward the berry and weight-loss supplements in general. Google searches on the scam itself would prompt links to the fake websites, where “investigative reports” would ultimately reveal the berry’s prowess and lead to the free trial sites.

That said, it’s a shame that any “entrepreneur” with a warehouse suddenly full of product can so easily find a way to make everyone else look bad. It would appear that such scandal-fueled consumer skepticism towards açaí and its superfruit brethren has taken its toll on the sales growth the market had previously enjoyed.

The incredible hype and success that the superfruit garnered in 2008 and 2009—açaí supplements grew U.S. sales 200 percent in 2008 and another 150 percent in 2009—flattened out in 2010, when the berry posted comparatively moderate growth of 5 percent.

But 5 percent growth is still growth. Curiously, despite the negative press that such FTC cases produce, açaí is the only superfruit supplement still growing its sales. Successes of such juice purveyors as Sambazon and Zola speak to the berry’s continued potential in beverage, while MLM companies like Xango and Tahitian Noni with their respective mangosteen and noni juices saw sales losses in 2010.

For now the berry seems to be holding its ground. But here’s a quick takeaway for supplement marketers: Keep the words “açaí” and “weight-loss” as far away from each other as possible.

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