The Federal Trade Commission announced that it reached a settlement with telemedicine company NextMed, resolving allegations that the company misled consumers about its weight loss programs. As part of the settlement, the company agreed to pay $150,000.
The FTC alleged that NextMed promoted the availability of its weight loss programs for a monthly fee (typically for $138 or $188), but failed to adequately disclose the fact that the fee didn't include the cost of the weight loss medication, the cost of the lab work that was necessary to determine eligibility for the medication, or the fee for the required doctor visit. In addition, the FTC alleged that NextMed also didn't properly disclose that its weight loss programs required a one-year commitment and that early termination fees applied. The FTC also alleged that the FTC made it difficult for customers to cancel.
In announcing the action, Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection. said, "Consumers who signed up for NextMed's programs faced significant unexpected costs and the company's customer service failures prevented consumers from cancelling or getting a refund. Today's action makes clear that companies cannot hide important information from consumers or neglect their responsibility to respond to valid complaints and concerns."
The FTC also charged NextMed with using fake customer testimonials, which included before-and-after photos of people who weren't NextMed clients. In addition, the FTC charged NextMed with engaging in deceptive consumer review practices, including by selectively challenging critical reviews on Trustpilot in order to suppress them, offering Amazon gift cards to consumers to remove or change negative reviews, and conditioning refunds on consumers' agreement to remove negative reviews that has been posted.
Finally, the FTC asserted that NextMed also made false and unsubstantiated claims about the amount of weight consumers would typically lose on the program.
While this case (or the consent order) doesn't break new legal ground, it certainly does highlight that the current FTC is continuing to focus on many of the core issues – such as deceptive pricing, fake endorsements, misleading reviews, deceptive health claims, and unfair subscription offers – that the Commission has focused on for years.
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