The Federal Trade Commission said Wednesday it has effectively shut down two online marketers as part of a continuing crackdown on fake news websites that peddle weight-loss products such as acai berry supplements.
New York-based Intermark Communications Inc., known as Copeac, agreed under a settlement with the FTC to pay more than $1.3 million, representing revenue derived from website ads and products marketed on fake news sites.
The FTC brought 10 cases against fake news sites in 2010. The Copeac case was the first one to strike at an affiliate network, meaning the company “recruited an entire network of affiliates that used fake news sites to promote products with allegedly deceptive claims.” Copeac is now required to monitor its affiliate marketers and immediately halt payment processing when affiliates are found to use deceptive ads.
The second case was against Grosse Point Park, Mich.-based Coulomb Media Inc. and Cody Low, also known as Joe Brooks. The FTC said the $2.7 million judgment against this group of defendants will be suspended after they pay $170,000 in cash and hand over proceeds from a certificate of deposit and the sale of Low’s 2010 Chevrolet Tahoe.
As with other online marketers involved in the FTC’s sweep of the industry, Copeac and Coulomb will have to “make clear when their commercial messages are advertisements rather than legitimate journalism, and will bar the defendants from further deceptive claims about health-related products such as the acai berry weight-loss supplements and colon cleansers they marketed,” the agency said.
The FTC said that of the 10 fake news site cases brought in 2010, eight have been resolved, with all of their affiliated fake news sites permanently shut down. The agency alleged that the content on the websites had titles such as “Health News Health Alerts,” making the ads appear as if they were legitimately reported news. The sites also made false claims that major broadcast outlets and Consumer Reports had carried their health reports, which documented major weight loss with acai berry supplements.
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