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Your Money Matters by Thomas Sottile, Esq.
Nutraceuticals: Marketing Buzz
That May Come Back To Bite
The word itself, cobbled together from “nutrition” and “pharmaceuticals,” has a new-age overtone and an elusive array of meanings.
Stephen L. DeFelice, M.D., founder of the Foundation of Innovation Medicine, which has the expressed purpose of accelerating discoveries of new medical breakthrough therapies through clinical research and studies, is credited with coining the word in 1989.
Nutraceuticals is defined generally as a food or part of a food that ostensibly provides medicinal or health benefits, including the prevention and treatment of disease. In the collective consciousness it conjures all the positive attributes of enhanced good health by way of ingesting those nutritionally high-powered super-foods and so-called “functional foods,” as a recognized remedy for a multitude of afflictions.
In a clinical study updated to May 31, 2012, the National Institute of Health (NIH) reported that aging of the population is a major event in the world; and the medical literature indicates that physical exercise and diet are at present the two available fundamental approaches to contrast or prevent most of the age-associated alterations. “Nowadays the nutraceutical food supplements become an opportunity for the consumer to improve the quality of individual diet for specific needs,” said the NIH.
Believe it or not, that outstanding endorsement for a billion-dollar branch of the dietary supplements industry leads us to the San Bushmen Tribe, an indigenous people of South Africa’s Kalahari Desert, and their endangered cactus-like plant, the hoodia gordonii. The “hoodia,” as it is called, is known traditionally for its appetite suppressant properties.
Nutraceuticals International LLC, a foreign business entity registered in Delaware, with a principal place of business in Elmwood, NJ, was accused by the Federal Trade Commission of falsely marketing a variety of ingredients purportedly derived from the succulent hoodia plant as a dietary supplement. The advertising claimed that the hoodia was eaten by San Bushmen during times when little food was available in order to suppress their appetites and yet provide them with a feeling of “nourished energy.”
The FTC did not find the claims valid, and filed a complaint against the company and its operator among others for falsely stating that their ingredients lowered appetite and caused weight loss. The defendants likewise provided deceptive advertising and promotional materials to trade customers, who then used it to market the purported weight-loss products to consumers.
The case was concluded late last year and resulted in a $22.5 million judgment against the defendants. Nutraceuticals International was prohibited from making any false or unsupported claims about food or dietary supplements and from helping others to make these claims; and from misrepresenting the results of any scientific study.
In another FTC case, the agency filed a complaint against Phoenix-based Central Coast Nutraceuticals, Inc., because of the company’s wide-spread use of fraudulent internet marketing to sell acai berry supplements, “colon cleansers,” and other products using allegedly duplicitous free trial offers and phony celebrity endorsements. The company employed “negative option” sales, where a consumer must take affirmative steps to notify the company in advance of billing to stop sending the product, or have to pay for it.
Consumers were told they would have to pay nothing up front and only a small fee to receive a product. But then they were automatically charged a higher price unless they took steps to cancel the shipments, or return the product before the end of the trial period. The defendants purportedly were responsible for repeated unauthorized charges to consumers’ bank accounts, and made it all but impossible to avoid paying full price for the products, typically $39.95 to $59.95.
In addition to the allegations of deceptive advertising in their order-gathering process, the FTC alleged the defendants deceptively claimed that their Acai Pure supplement would cause rapid and substantial weight loss, and that their Colotox colon cleanser would prevent colon cancer. The defendants’ marketing strategy traded on the rampant popularity of acai berry supplements, which are derived from acai palm trees that are native to Central and South America. Subsequently, the federal district court imposed an asset freeze and appointed a receiver to oversee the business.
The total amount of consumer loss in this case was placed at $80 million. The Better Business Bureau of Central Arizona rated Central Coast Nutraceuticals an “F” since if failed to respond to consumer complaints, of which the BBB received hundreds.
In this post-modern age where anything and everything seems possible, or at least downloadable on a smartphone, claims of promised medical and nutritional breakthroughs can be quite believable. Consequently, the internet is awash in advertisements for miracle supplements and other panaceas which we consumers may pursue with our purchase dollars. Although federal and state law prohibits false representations and deceptive advertising of any consumer good, generally no FDA approval is needed for dietary supplements the way it would be if a new pain medicine was proposed for sale. Therefore, there is no substitute for being well-informed about what nutraceuticals we are buying and for what desired result, least we be disappointed and hopefully not scammed in the process.
Thomas Sottile is an attorney in Media, PA. He retired from the U.S. Postal Inspection Service after 23 years as an investigator and attorney.
Nutraceuticals: Marketing Buzz
That May Come Back To Bite
The word itself, cobbled together from “nutrition” and “pharmaceuticals,” has a new-age overtone and an elusive array of meanings.
Stephen L. DeFelice, M.D., founder of the Foundation of Innovation Medicine, which has the expressed purpose of accelerating discoveries of new medical breakthrough therapies through clinical research and studies, is credited with coining the word in 1989.
Nutraceuticals is defined generally as a food or part of a food that ostensibly provides medicinal or health benefits, including the prevention and treatment of disease. In the collective consciousness it conjures all the positive attributes of enhanced good health by way of ingesting those nutritionally high-powered super-foods and so-called “functional foods,” as a recognized remedy for a multitude of afflictions.
In a clinical study updated to May 31, 2012, the National Institute of Health (NIH) reported that aging of the population is a major event in the world; and the medical literature indicates that physical exercise and diet are at present the two available fundamental approaches to contrast or prevent most of the age-associated alterations. “Nowadays the nutraceutical food supplements become an opportunity for the consumer to improve the quality of individual diet for specific needs,” said the NIH.
Believe it or not, that outstanding endorsement for a billion-dollar branch of the dietary supplements industry leads us to the San Bushmen Tribe, an indigenous people of South Africa’s Kalahari Desert, and their endangered cactus-like plant, the hoodia gordonii. The “hoodia,” as it is called, is known traditionally for its appetite suppressant properties.
Nutraceuticals International LLC, a foreign business entity registered in Delaware, with a principal place of business in Elmwood, NJ, was accused by the Federal Trade Commission of falsely marketing a variety of ingredients purportedly derived from the succulent hoodia plant as a dietary supplement. The advertising claimed that the hoodia was eaten by San Bushmen during times when little food was available in order to suppress their appetites and yet provide them with a feeling of “nourished energy.”
The FTC did not find the claims valid, and filed a complaint against the company and its operator among others for falsely stating that their ingredients lowered appetite and caused weight loss. The defendants likewise provided deceptive advertising and promotional materials to trade customers, who then used it to market the purported weight-loss products to consumers.
The case was concluded late last year and resulted in a $22.5 million judgment against the defendants. Nutraceuticals International was prohibited from making any false or unsupported claims about food or dietary supplements and from helping others to make these claims; and from misrepresenting the results of any scientific study.
In another FTC case, the agency filed a complaint against Phoenix-based Central Coast Nutraceuticals, Inc., because of the company’s wide-spread use of fraudulent internet marketing to sell acai berry supplements, “colon cleansers,” and other products using allegedly duplicitous free trial offers and phony celebrity endorsements. The company employed “negative option” sales, where a consumer must take affirmative steps to notify the company in advance of billing to stop sending the product, or have to pay for it.
Consumers were told they would have to pay nothing up front and only a small fee to receive a product. But then they were automatically charged a higher price unless they took steps to cancel the shipments, or return the product before the end of the trial period. The defendants purportedly were responsible for repeated unauthorized charges to consumers’ bank accounts, and made it all but impossible to avoid paying full price for the products, typically $39.95 to $59.95.
In addition to the allegations of deceptive advertising in their order-gathering process, the FTC alleged the defendants deceptively claimed that their Acai Pure supplement would cause rapid and substantial weight loss, and that their Colotox colon cleanser would prevent colon cancer. The defendants’ marketing strategy traded on the rampant popularity of acai berry supplements, which are derived from acai palm trees that are native to Central and South America. Subsequently, the federal district court imposed an asset freeze and appointed a receiver to oversee the business.
The total amount of consumer loss in this case was placed at $80 million. The Better Business Bureau of Central Arizona rated Central Coast Nutraceuticals an “F” since if failed to respond to consumer complaints, of which the BBB received hundreds.
In this post-modern age where anything and everything seems possible, or at least downloadable on a smartphone, claims of promised medical and nutritional breakthroughs can be quite believable. Consequently, the internet is awash in advertisements for miracle supplements and other panaceas which we consumers may pursue with our purchase dollars. Although federal and state law prohibits false representations and deceptive advertising of any consumer good, generally no FDA approval is needed for dietary supplements the way it would be if a new pain medicine was proposed for sale. Therefore, there is no substitute for being well-informed about what nutraceuticals we are buying and for what desired result, least we be disappointed and hopefully not scammed in the process.
Thomas Sottile is an attorney in Media, PA. He retired from the U.S. Postal Inspection Service after 23 years as an investigator and attorney.