In the first ever case of its kind, the Federal Trade Commission just reached a settlement that includes a $12.8 million fine against an herbal supplement company that paid for fake five-star reviews to boost its Amazon sales.
The fraudulent company, Cure Encapsulations, contacted a site that churns out fake reviews — amazonverifiedreviews.com (now taken down) — and told them, "“Please make my product … stay a five star." They then paid the sleazy site "$1,000 for 30 reviews in order to bump the product’s ratings," according to Mashable.
Along with the falsified reviews purporting to be from actual customers, the FTC also alleged that the company made “false and unsubstantiated claims” for the pills known as Quality Encapsulations Garcinia Cambogia.
Garcinia cambogia is a tropical fruit found in Indonesia that has been used as a natural aid for weight loss. As The Verge points out, use of the herbal supplement has associated with acute liver failure.
“People rely on reviews when they’re shopping online,” said director of the commission’s Bureau of Consumer Protection Andrew Smith in a statement. “When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”
Along with the hefty fine, Cure Encapsulations is also banned "from making weight-loss, appetite-suppression, fat-blocking, or disease-treatment claims for any dietary supplement, food, or drug unless they have competent and reliable scientific evidence in the form of human clinical testing supporting the claims," according to the FTC.
You mean they're still allowed to run a business? Buyers beware!
Image: Robert Nelson/Flickr
