A company which sold what it claimed were weight-loss pills using fake reviews on Amazon has been given a suspended $12.8m fine by US regulators.
It is the first time that the Federal Trade Commission (FTC) has made a judgement against a company for hiring a marketing company to write fake reviews of its products on the online retail giant.
The business, Cure Encapsulations, and its owner, Naftula Jacobowitz, reached a settlement with the FTC to pay $50,000 due to its financial situation.
According to the FTC “if the defendants are later found to have misrepresented their financial condition” then the full $12.8m will become due.
As part of the settlement, the company admitted that it made false and unsubstantiated claims about its weight-loss supplement, and hired a marketing company to write and post fake reviews about the supplement on Amazon.