The U.S. Federal Trade Commission (FTC) said it has settled cases against two Web sites accused of fraudulently selling treatments and tests for anthrax in the wake of last fall’s terrorist attacks.
The FTC said it reached the settlement agreements within days of filing formal complaints against Vital Living Products and Rawhealth.net. The settlements are the first cases to be resolved since the agency began a massive online enforcement campaign late last year.
Andrea Foster, regional director of the FTC’s Southeast regional office in Atlanta, Georgia, told the E-Commerce Times that the two sites became targets for enforcement because they did not respond to an earlier FTC e-mail warning them about making false claims on the Web.
“Many of the companies we contacted took down their Web sites voluntarily,” Foster said. “We did not hear back from these sites, so we took the next step.”
More Suits Coming?
Foster said she cannot discuss whether additional enforcement actions are forthcoming. She noted that the anthrax scare is now nearly six months in the past, which is helping to weed out fraudulent sites as well.
“There are always new ones coming up with different claims, and we are online all the time searching them out,” she said. “But, clearly, the anthrax treatment and detection is not as big a selling point as it was when the frenzy was still going on.”
Drop in the Bucket
Since November, the FTC has issued 121 letters warning online marketers against making false claims in connection with bioterrorism treatments.
To date, about 70 of those sites have stopped making the claims challenged by the FTC in conjunction with state attorneys general and other law enforcement sources.
“These companies used inaccurate and unfounded claims to sell peace of mind,” FTC Bureau of Consumer Protection Director J. Howard Beales said in a statement. “They tried to cash in on consumer anxiety about bioterrorism.”
The FTC charged that Vital Living Products, which operated out of North Carolina, advertised a do-it-yourself anthrax test kit that it said could detect bacteria spores in air, water and soil. The company claimed the kit was 95 percent accurate.
The agency said its own test, done with actual anthrax spores, found that the test was ineffective.
The FTC noted that as a result of an injunction issued last fall, it knows of no test kits actually sold to consumers. The Vital Living settlement prohibits the company from shipping any more test kits unless it can prove that they work.
The FTC’s case against Rawhealth.net and its operator, Kris Pletschke, involved claims about a supposed cure for a range of pathogens, including anthrax.
That site, based in Beaverton, Oregon, sold a colloidal silver product and claimed it would immediately kill up to 650 different human diseases, including anthrax, Ebola and so-called flesh-eating bacteria.
Exact terms of each settlement were not disclosed. Earlier, the FTC had warned that any Web site found violating its rules could face a fine of US$11,000 for each infraction.
The FTC is not the only government agency that has cracked down on illegal Web sales in the wake of September 11th. In December, the U.S. Securities and Exchange Commission (SEC) filed suit against the alleged backers of a shell company that sold handheld anthrax detection devices.
Many e-commerce companies watched the anthrax scare closely because it raised concerns about package delivery heading into the 2001 holiday shopping season.
The most immediate impact, however, appeared to be a boost for online bill payment as consumers opted to reduce the amount of mail they receive.