PORTLAND, Maine — A federal judge has approved a $16 million settlement ordering a South Portland company to stop selling certain weight-loss supplements or advertise using claims a Federal Trade Commission official called “a blizzard of lies.”
The settlement approval Friday comes after the Federal Trade Commission and Maine attorney general’s office filed a complaint Jan. 19 against two South Portland companies and their owners, Anthony and Staci Dill. The complaint alleged the couple generated more than $16 million in sales by making false claims about their weight-loss pills.
The complaint also alleged the South Portland-based companies charged customers during a “free trial” period and complicated the return process.
“The Dills’ companies told a blizzard of lies,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a news release about approval of the settlement. “They sold worthless weight-loss supplements, lied about their supposed ‘free trial’ offers, took people’s money with unauthorized auto-renewal plans and made it nearly impossible to return their bogus products.”
The complaint focused on two products by the trade name AF Plus and Final Trim. The FTC and attorney general’s office said the companies had marketed those supplement 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.
In radio ads for the product it made claims people could lose weight without any changes to diet or exercise.
In one case, the FTC alleged the company aired an ad that “deceptively implies that it is a public service announcement, citing a Surgeon General’s warning regarding obesity.” Another featured a testimonial from a spokesperson introduced as “Stacey Howard.” The FTC alleged that character and her experiences were fictional.
“This company preyed on the vulnerability of consumers who seek a legitimate weight loss program,” Attorney General Janet Mills said in a news release. “The conduct here is not limited to making false claims about their products; it also includes charging consumers hundreds of dollars in automatic monthly orders and making it very difficult for customers to cancel orders or get their money back.”
In total, the complaint alleged 17 counts of unfair and deceptive business practices under federal and state law. It was the first enforcement action taken together by Maine’s Attorney General and the FTC, according to a news release.
In settling, the company and its owners did not admit nor deny breaking the law and agreed to turn over property that 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 settlement calls for the Dills to hand over various property into a receivership estate that will sell it off.
Maine is to get $500,000 of the proceeds with the remainder going to the FTC in order to pay restitution to customers or to fund the commission’s consumer information programs.
U.S. District Court Judge George Singal approved the terms of the settlement Friday morning.