FTC Sues Weight Loss Company Roca Labs
November 18, 2015The Federal Trade Commission (FTC, Plaintiff) has sued Roca Labs (Roca Labs Nutraceutical USA, Inc. and their principals, Defendants), a weight loss company for allegedly making baseless claims for their products and using "gag clauses" to prevent customers from writing negative customer reviews and testimonials on their company and products. Roca Labs utilized the Internet to market their weight loss product line, and through online search and social media advertising such as Google, Bing, Yahoo, and Facebook. In the complaint, Federal Trade Commission v. Roca Labs, Inc., a corporation, et al, states the facts and the basis for their lawsuit.
“Roca Labs had an adversarial relationship with the truth. Not only did they make false or unsubstantiated weight-loss claims, they also attempted to intimidate their own customers from sharing truthful – and truly negative – reviews of their products.”
~ Jessica Rich, Director of the FTC’s Bureau of Consumer Protection
Roca Labs created a product line that was marketed as safe and effective alternatives to gastric bypass surgery. From using their “Formula” and “Anti-Cravings” powder, they claimed users could lose as much as 21 pounds in one month, and that users have a 90% success rate in achieving substantial weight loss. Roca Labs sold the product line with a cost of $480 for a 3-4 month supply. Since 2010, it is estimated they sold $20 million of their weight loss products. These unsubstantiated claims are one of the causes of action in the FTC's complaint against Roca Labs.
In their complaint, the FTC takes issue with Roca Labs' actions to sue and threaten to sue their customers for any negative experiences with the product. In addition, any complaints made by their customers to the Better Business Bureau are also grounds for Roca Labs to sue their customers. Under the provisions of Roca Labs' Terms and Conditions, they have allegedly sued their customers for violations of their non-disparagement and gag clause. Relying on their Terms and Conditions, Roca Labs has made threats and warnings to customers from writing truthful and negative reviews of Roca Labs and/or their product line of weight loss products.
Another cause of action alleged in the FTC's complaint is for Roca Labs' use of testimonials and “third-party” reviews to show weight loss success through "Success Videos" made by customers. The Success Videos were to be persuasive to potential and current customers enticing them to buy, or continue to buy, their products. Roca Labs did not disclose the financial arrangement entered into with the person in each of their Success Videos. In exchange for positive reviews, Roca Labs offered to pay 50% of the cost for their weight loss products.
From a Gallup poll published on 11/26/2014:
Half of Americans want to lose weight, but only 26% of us are trying
Americans that want to lose weight is 51%
6 in 10 of us say we're heavier they we'd like to be
The vote by the Commission to authorize filing of this complaint was 4-0. The complaint was filed in the U.S. District Court for the Middle District of Florida.
The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
In other related news: Lawmakers are working to pass legislation to allow customers to post negative reviews about businesses online without fear of retaliation. A bipartisan group of senators are pushing legislation to bar businesses from using a common online contract clause that effectively prohibits customers from posting negative reviews about them. It seems the Senate panel is getting closer to passing a bill targeting gag clauses.
Reference:
Federal Trade Commission, Plaintiff, v. Roca Labs, Inc., a corporation; Roca Labs Nutraceutical USA, Inc., a corporation; Don Juravin; and George Whiting, Defendants,
FTC MATTER/FILE NUMBER: 142 3255
CIVIL ACTION NUMBER: 8:15-cv-02231-MSS-TBM
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