Court Orders $1.9 Million in Restitution for False Advertising of Diet Product
A federal court in Connecticut has ordered the payment of $1.9 million in equitable restitution to consumers who purchased Chinese Diet Tea and Bio-Slim Patch in 2003-2004. FTC v. Bronson Partners, LLC, No. 04-1866 (D. Conn., decided December 4, 2009). The court determined in 2008 that the Federal Trade Commission’s (FTC’s) claims of false advertising against the defendants had merit and issued this ruling to explain the basis for its damages award and why it was not allowing any offsets to the defendants from the gross amounts they received for all of the products sold.
Essentially, the court found that the defendants’ poor recordkeeping and legal precedent did not allow offsets for credit card refunds, bounced checks, operating expenses, or revenue generated by reorders, which defendants claimed represented satisfied customers. According to the court, reorders could also have represented customers who “had not yet achieved the results promised in the deceptive advertising.” The court also held three of the defendants jointly and severally liable for the restitution amount, after finding they had collaborated in the deceptive advertising scheme. A fourth defendant, who was an employee of the enterprise and had not been accused of any wrongdoing, was found not liable for any portion of the award.
