PORTLAND, Maine — A couple who operated a South Portland weight-loss supplement seller has agreed to a judgment of more than $16 million to settle deceptive marketing claims made by federal and state regulators.
Direct Alternatives, Original Organics and company owners Anthony and Staci Dill agreed to turn over real estate, personal property, trademarks, investments and corporate interests, including a stake in the Brewer-based Twenty 2 Vodka, as part of the settlement.
The Federal Trade Commission and Maine attorney general’s office filed a complaint Jan. 19 against the South Portland-based companies and the Dills individually, claiming they generated more than $16 million in sales from false claims about their weight-loss pills and from charging customers during a “free trial” period and complicating the return process.
The FTC and attorney general’s office said the companies had marketed weight-loss products such as its AF Plus and Final Trim brands in the United States and Canada starting in January 2012 through 2016.
For both products, the company required a minimum order of two bottles, at a price of about $80, according to the FTC complaint.
The FTC said the company advertised a free trial of both pills but did not disclose that, in order to get a refund, at least one bottle must be returned unopened and the customer must make specific arrangements to qualify for the return.
The complaint states the company aired various radio advertisements that made unsupported claims about the weight-loss potential of the supplements and, in one case, aired an ad that “deceptively implies that it is a public service announcement, citing a Surgeon General’s warning regarding obesity….”
One ad featured a testimonial from a spokesperson introduced as “Stacey Howard.” The FTC alleged that character and her experiences were made up. Some of the company’s advertisements claimed people could lose weight without any changes to diet or exercise.
In settling, the company and its owners did not admit nor deny breaking the law and said they have stopped selling the products in question.
Both supplements included acai fruit or extract. AF Plus also included green tea leaf extract, pomegranate extract and amla fruit extract. Final Trim included thiamin, riboflavin, konjac root and a blend of roots and fruits it called the “HyperLoss blend.”
If they continue to sell weight-loss products or similar supplements, the settlement outlines how to change their advertising and billing practices.
The FTC and attorney general complaint alleged 17 counts of unfair and deceptive business practices under federal and state law.
The settlement calls for the couple to hand over various property into a receivership estate that will sell it off and give $500,000 to the state of Maine, with the remainder going to the FTC in order to pay restitution to customers or to fund the commission’s consumer information programs.
The property includes a home in Rangeley, a boat, snowmobiles, investment accounts, retirement funds, life insurance policies, corporate trademarks, corporate merchant accounts and timeshares in New Hampshire and Florida.
The FTC and attorneys for the Dills and their companies asked the court last week to approve the terms of the settlement and put Auburn attorney John C. Turner in charge of selling off the property in the receivership estate.