• FTC Warns 180 Online Businesses about Diabetes Fraud
  • January 31, 2007 | Authors: Jeffrey S. Edelstein; Linda A. Goldstein
  • Law Firm: Manatt, Phelps & Phillips, LLP - New York Office
  • The Food and Drug Administration and the Federal Trade Commission have sent out 180 warning letters to Internet companies in the United States, Mexico, and Canada advising them to stop making unapproved and illegal drug claims aimed at diabetics, claims that go so far as to advise them to “throw away your insulin.”

    Some companies that received the letters are beginning to cooperate by changing their claims or removing their ads, said Richard Cleland of the FTC’s Division of Advertising Practices. In the next several weeks, the federal agencies will determine which companies merit further investigation. Enforcement action, such as seizure of their products, will depend on how much business the company’s Internet site is generating, how strong their fraudulent claims are, and whether they can be located, according to Cleland.

    To alert consumers to the dangers of the diabetes scam, the two government agencies have established their own phony product ad on the Internet. Patients surfing the Internet will come across a Web site for Glucobate, advertised as extract of muskmelon to lower blood sugar levels. That site is rife with false claims and testimonials (such as “Glucobate will drop your blood sugar 30 points in 30 days or it’s free!”). When the consumer clicks on for more information, the site reveals that it is a phony (“Glucobate? Glucofake!”) and alerts the consumer about avoiding other phony cure-all advertisements. According to the FTC’s Cleland, the site is getting quite a number of hits, so the hope is that the public is becoming more aware.

    Significance: For obvious reasons, people with chronic systemic diseases such as diabetes are easy marks for scam artists. Any online marketer of health products must be careful to avoid making unsupported claims or risk governmental scrutiny.