FTC alleges fraud in supplements industry
Sales of vitamins, other products hit $25B in 2009
The Federal Trade Commission in the U.S. told a Senate committee that fraud is rampant and rising in the health supplements industry.
In a presentation to the committee in Washington, D.C., the FTC said the supplements industry had sales of $25 billion US last year, a six per cent increase over the previous year.
It said the downturn has helped the supplements business as consumers turn to natural health products instead of more expensive pharmaceuticals.
Over the past decade, the FTC has brought more than 100 enforcement actions over unproven claims that supplements can cure a variety of conditions, including cancer and AIDS.
Many of the fraudulent products are advertised in national television and print campaigns. The internet and infomercials provide a fertile advertising medium for fraudulent health products.
One example the FTC pointed to was Airborne effervescent tablets, which were promoted as clinically proven to prevent colds and flu, and protect against exposure to germs.
The product was marketed nationally and sold over the counter in retail outlets.
The inventor and company that sold the product were forced to pay $6.5 million into a class-action settlement.
But by the time the case was resolved, several copycat products also making unsubstantiated claims had hit store shelves.
Marketing scams 'cruel': FTC
Another company, Direct Marketing Concepts, promoted Coral Calcium and Supreme Greens through infomercials.
The company claimed its products would cure many serious diseases, including cancer, Parkinson's, and heart and autoimmune diseases.
Not only did the company make false claims, it also charged customers on an ongoing basis without their consent.
The business was forced to pay monetary judgments of $70 million.
Other scams outlined by the commission include several weight-loss products.
"Such marketing scams are particularly cruel by preying on consumers when they are most vulnerable and desperate, offering false hope and even luring them away from more effective treatments," the FTC states.