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The encyclopedia · Advertising & PR · Marketing decision · 2014

LeanSpa built fake news sites to sell açaí — and 'free trials' that billed $80 a month

Jan 2014: LeanSpa's marketers surrendered $7.3M — fake news sites pushed açaí 'miracle' pills, and free trials quietly became $79.95 monthly charges.

LeanSpa, LLC · 2014-01

What happened

LeanSpa's marketers built a network of fake news websites — pages styled like local journalism — to push acai berry and 'colon cleanse' weight-loss supplements as miracle products. The hook was a 'free trial' for a nominal shipping fee. What arrived instead was a $79.95 charge, and then recurring monthly billing.

The FTC and the State of Connecticut sued in December 2011 and shut the operation down; the settlement was announced on 7 January 2014 inside 'Operation Failed Resolution', the same sweep as Sensa and L'Occitane. The settling defendants surrendered roughly $7.3 million in assets against a judgment totalling more than $32 million, most of it suspended, and were permanently barred from negative-option billing, misrepresenting trials or news reports, and rapid-weight-loss claims.

In September 2014 the FTC mailed more than 400,000 claim forms to possible victims. The case became the Commission's reference for a pattern it has hunted ever since: the fake news site as ad placement, and the 'free trial' as the opening line of a recurring bill.

Why it happened

  • The ad's disguise did the selling: a news-styled page made promotion read like reporting.
  • 'Free trial plus shipping' concealed a $79.95 charge and recurring billing — the trial was the trap.
  • The sweep treated the fake sites and the billing trick as one deception: misrepresentation from click to charge.
What it cost$7.3M surrendered; $32.7M judgmentcostly

The lesson

A news-styled ad is a misrepresentation before it is a marketing channel, and 'free trial' means nothing if the billing is not free: regulators now read the funnel from click to charge.

Aftermath

The operation never reopened; more than 400,000 claim forms went out to victims in September 2014. 'Fake news site' entered the FTC's vocabulary as a named deception — a precedent LeanSpa paid for.

Sources

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