The FTC just Settled Its First Case Against Fake Amazon Reviews
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The FTC just Settled Its First Case Against Fake Amazon Reviews

On Tuesday evening, the Federal Trade Commission announced a settlement in its case against Cure Encapsulations, Inc., owned by Naftula Jacobwitz.

According to the FTC, the company paid a third-party website, amazonverifiedreviews.com, for fake Amazon reviews, aiming to keep its rating above 4.3 out of 5 stars.

“Quality Encapsulation Garcinia Cambogia Extract with HCA,” the product in question, was sold on Amazon as an “appetite-suppressing, fat-blocking, weight-loss pill.”

The proposed settlement imposes a $12.8 million judgement, although it will be suspended when the company pays $50,000 to the FTC and completes “the payment of certain unpaid income tax obligations.” However, the full amount will be due immediately if the judge finds the company misrepresented their financial situation to the FTC.

Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, said, “When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”

The FTC said both the reviews and the company itself made “false and unsubstantiated” claims on their Amazon product page. It claimed the product was a “powerful appetite suppressant” and “Literally BLOCKS FAT FROM Forming.” It was also said that it causes significant weight loss.

Garcinia Cambogia–a tropical fruit sometimes called Brindleberry–is said to be a “natural” weight loss aid. However, it is actually known to cause acute liver failure.

“We welcome the FTC’s work in this area,” an Amazon spokesperson told The Verge. “Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.”

Cure Encapsulation is also banned from making any claims about the health benefits of dietary supplements without clinical evidence. In addition, the company will have to tell customers about the allegations and identify, for Amazon, which reviews were fake.

Fake reviews have been a problem on Amazon for a while, but this newest action from the FTC could mean the government is finally cracking down on them.