FTC Issues a $2 Million Reminder to Ad Agencies

The Federal Trade Commission ("FTC") and the State of Maine have announced a $2 million dollar settlement with ad agency Marketing Architects, Inc. ("MAI") for deceptive weight-loss claims. In the last three years, the FTC has brought at least three complaints against ad agencies. The judgment against MAI, however, is among the largest judgments the FTC has sought from an ad agency to date. The case contains important lessons for ad agencies.

Background

According to the FTC, the ads and scripts created by MAI for its client Direct Alternatives' (DA's) weight-loss products were deceptive. These ads included unsubstantiated claims such as "with the metabolism-boosting benefits of AF Plus, you can keep eating your favorite foods and still lose pounds and inches -- in fact we guarantee it" and "try it just once a day for thirty days and if you're not on your way to being thirty pounds thinner, just send it back and risk nothing." MAI also used testimonials that