test your knowledge
How the world got lost on
the road to an anti-aging pill
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May 31, 2010: by Bill Sardi
The consumer shift to buying dietary supplements online complicates the problem of sorting out fact from fiction when it comes to dietary supplements. The internet has become an unbridled field for electronic fraud when it comes to dietary supplements, and online consumers continue to be suckered in by the thousands on a daily basis. There are many reasons for this.
First, government overseers have chosen to look the other way while outlaw companies on the internet make unsubstantiated claims for their products. The Federal Trade Commission says it will do nothing unless it receives one-hundred consumer complaints and the Food and Drug Administration only sends toothless correction letters in regard to labeling or advertising claims. Online marketers of dietary supplements know there is no cop on supplement boulevard to issue citations.
Second, renegade manufacturers hide behind an army of bloggers who claim to be experts and make false and misleading claims for dietary supplements without disclosing they receive kickbacks in the form of Google click fees or affiliate fees from manufacturers. The FTC says disclosure of these relationships is required.
These bloggers are the front-men for an online crime syndicate. They will take the fall for the exaggerated advertising claims that link consumers to the online marketer’s website, that is, if you can catch them.
The problem is, many of these online bloggers write under pseudonyms, or their true identity remains hidden by the server for the URL (home page address). So they escape prosecution by agencies that regulate dietary-supplement advertising.
The FTC says it is the advertising medium (newspaper, television, blogging site) that bears the responsibility to police the content that consumers read, see and hear. For example, TV infomercials are carefully screened by television networks and the Electronic Retailer’s Association (ERA), who enforces FTC guidelines. Not so for online sales of vitamin pills.
Try and place a false or misleading cure for cancer in an advertisement in The New York Times, and you won’t get past first base. But do this on a blog site in cooperation with Google, and you’re in business, without having to carry an inventory, worry about shipping or even the quality of the product. That is the vendor’s problem.
Google is not only an enabler in this crime syndicate that fails to police advertising according to FTC self-regulation guidelines, but it even provides tools that outlaws use to steal business from legitimate, online dietary-supplement companies.
Imagine someone stood out in front of a store and counted the number of people arriving and whether they were carrying packages when they left the store. You would call that person a spy. But Google gets away with this every day, providing data to thieves who raid FTC-compliant businesses every day. The outlaws know how many people visit a given site, whether they made a purchase or not, and a lot more.
Furthermore, Google gives privilege to anyone who wants to use another party’s trademarks as a search term, furthering the “theft” of traffic from legitimate sites to a competitor. And if you are a merchant-victim to these thieves, who are you going to complain to, Google? They are a $60-billion gorilla that initially got into business trafficking in other’s intellectual property. You can complain, but Google is far from being impartial – they are in fact part of the problem.
As a consumer you have no idea when you search the internet to shop for dietary supplements that you are being gamed. Online marketers know that many consumers are shopping around for the best price, so all they need do is offer an irresistible price – how about free?!. And thousands of naïve dietary supplement buyers fall for it every day.
Free samples are the bait. Consumers just pick up shipping charges. The objective of some of these online marketers is to capture an online shoppers credit card number so they can begin an auto-ship program where you pay for monthly shipments of over-priced products.
There is no better example of this online consumer fraud in the dietary supplement arena than the marketing of red wine resveratrol pills — panned as an anti-aging pill by university-based biologists.
Consumers think they can beat the online marketers of resveratrol pills at their game, get the free product – that over-priced $40 bottle of resveratrol pills that provides the same dosage and number of pills that you can purchase for just $5.49 at Wal Mart. You think you can cancel the auto-ship program within the allotted time frame (that is, if they even inform online shoppers about it). So you call and call, but you can’t get anyone to answer the telephone. You send a cancellation letter, but you have no idea if it really arrived. You can complain to your State Attorney General, but your best recourse is to call your credit card company and complain. Most consumers feel sheepish for trying to get the free product without buying into the auto-ship program, so they don’t complain.
When online shoppers begin their search for dietary supplements at Google, the search engine brings up all manner of these incorrigible con-men who market these products. The Google ads at the right-side bar also bait you with key words they know that consumers fall for. Google gives a high ranking to the websites and bloggers who generate the most profit for them. Legitimate vendors are likely to be found many pages deep at Google.
One legitimate supplier of resveratrol pills sought to put a stop to all the unfair competition and online consumer rip-offs. After spending $7000 to launch a complaint with the Better Business Bureau against an egregious violator who was making false claims their product was superior to others, the BBB let them off the hook. The offending marketer of resveratrol pills, who was misleading consumers that their product was being used by leading universities and claimed to show, in an unpublished test, superior absorption and bioavailability, temporarily cleaned up some of their violations on their website, issued a press release that the BBB had given them a clean bill of health, and then reverted back to their old ways of doing business. They made a sham out of the BBB.
In another instance, an online website claimed it was a rating service for resveratrol pills and that they were conducting tests and price comparisons. Consumers had no idea the website owner was receiving kickbacks from manufacturers of resveratrol pills and that no tests were being conducted whatsoever.
A legitimate vendor of resveratrol supplements sought to put a stop to this but had to spend $12,000 in legal fees just to track down the owner of the rating service URL who was using a false name and falsely claiming his business address was in San Francisco at a United Parcel store. The offender was actually doing business out of Florida. Naïve consumers haven’t a clue about this web of internet fraud that goes on daily.
Consumers assume the FTC, the FDA, the Better Business Bureau and Google, are on watch for consumer fraud. Instead, this assumption gives false legitimacy to many outlaw vendors of dietary supplements. The suggestion that consumers practice caveat emptor (buyer beware) lets these regulatory and enforcement agents off the hook. There is simply no way a savvy consumer can distinguish a legitimate vendor of dietary supplements from an outlaw supplier today without regulatory oversight.
And it didn’t take long for big-name online news sources, scratching to generate income, to get in on the ill-gotten booty. The New York Times and Los Angeles Times published short online articles, and name-dropped the best-known brand of resveratrol pills into their stories to draw online traffic, only for prospective consumers to be greeted by Google ad boxes adjacent to the so-called news reports. The Google ad boxes led consumers to the very same fraudulent online vendors of resveratrol pills. There was no news value to the online articles that were posted. They were planted just to generate click fees. The online crime syndicate continues and consumers are never the wiser. #### © 2010 Bill Sardi, Resveratrol News