I am constantly amazed by the stupid tactics some fairly large companies use to promote their products.
The latest “Stupid Marketer” award goes to NutriMost LLC for its tactics in marketing its product, NutriMost Ultimate Fat Loss System.
It was charged with wrongdoing by the FTC and entered a settlement with the FTC requiring the company to pay $2 million.
Here are some of the tactics used in the marketing of the NutriMost Ultimate Fat Loss System that got the company in trouble with the FTC:
- The company claimed users could lose 20-40 pounds in 40 days without a restrictive diet. The company had insufficient evidence to back up the claim and its diet was very restrictive.
- The company claimed the product could treat or cure diabetes but didn’t have scientific evidence to back up the claim.
- The company used testimonials and before-and-after images of people who had not used the product to achieve their results.
- The company failed to disclose that in many cases the people depicted in its ads were owners of NutriMost franchises, were employees of NutriMost franchise owners, or were relatives of franchise owners
What Do You Think?
Do you see problems here?
If you’ve been visiting eBiz411 for a while, the problems should be apparent to you:
- You can’t make claims for a product that are not substantiated by scientific evidence.
- You can’t claim a product will treat or cure an illness without scientific evidence.
- FTC guidelines require that endorsers must be bona fide users of the product who actually achieved the advertised results.
- Material connections between endorsers and the advertisers must be disclosed when they exist.
Failing to comply with these guidelines cost NutriMost $2 million, plus whatever it paid in legal fees to defend the FTC charges.
And we are just talking about out-of-pocket monetary costs. Who knows what NutriMost’s losses are when you consider the loss of consumer confidence in its products that will result from the publicity surrounding the FTC charges.
The moral of the story for us is – stay legit, know the rules, and always do what’s best for your customers before considering your own financial gain.