Federal Court bans deceptive health claims and a wide range of other deceptive conduct but declines to order compensation to victims

Illegal marketing techniques
banned by court

At the request of the Federal Trade Commission (FTC), a federal district court in California ordered a stop to the illegal tactics used by marketers who deceptively promoted dissolvable oral film strips as effective smoking cessation, weight-loss, and sexual-performance aids.

The court found that the FTC had prevailed on all 16 counts in its complaint against Jason Cardiff, Eunjung Cardiff, and seven entities they control, doing business as Redwood Scientific Technologies. 

The court’s permanent injunction, among other things, bans the Cardiffs and their companies from selling dissolvable oral film strips directly to consumers, bans engaging in multi-level marketing, bans them from making robocalls, and bans them from using negative-option marketing. 

It also imposes severe restrictions on their future conduct related to false advertising, fake testimonials, and unauthorized billing.

However, despite the fact that the FTC presented evidence that consumers lost $18.2 million to the defendants’ deceptive marketing, the court declined to order any compensation because of a recent Supreme Court’s ruling in the case of AMG v. FTC, which undercuts the agency’s authority to obtain such consumer redress.

“We’re pleased the court ruled in our favor as to every count in the complaint and entered such a strong injunction, including bans on several types of marketing,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. 

“Unfortunately, the FTC still hasn’t been given back its full authority to return money to fraud victims, meaning the people hurt by this scheme – which brought in over $18 million – get nothing.”

More information here