Trivita fined $3.5 million for bogus Nopalea health claims
Extracted from the Nopal cactus, Trivita’s Nopalea is essentially cactus juice available at $39.99 per 32oz bottle.
Or as Trivita describe it on their website:
Nopalea is a delicious, nutrient rich drink from the Sonoran Desert. Featuring the superfruit of the Nopal cactus, it contains a powerful class of nutrients called Bioflavanoids.
Nopalea customers enjoy so many aspects of this unique drink: the taste, color and certainly its health benefits.
Following an investigation by the FTC, the marketing of those “health benefits” has landed Trivita in hot water.
In a 130 page complaint filed on the 10th of July in an Arizona District Court, the FTC accused Trivita of being
in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52, in connection with the advertising, marketing, and sale of Nopalea, which purports to relieve pain, improve breathing, and treat a variety of health conditions.
Specifically, the FTC’s complaint references claims made by Trivita and its sales representatives:
In (Trivita’s) Nopalea infomercial, print advertisements, and websites, (Trivita) display a toll-free telephone number for consumers to purchase Nopalea directly from TriVita.
When consumers call the toll-free number, TriVita sales representatives represent that Nopalea relieves pain and provides other health benefits. In numerous instances, TriVita sales representatives claim to consumers that drinking Nopalea will make consumers “pain-free.”
Excerpts from Trivita’s visual advertising includes health claims related to “neck pain, back pain, swollen joints, muscle aches, sinus infections, skin disorders, respiratory
problems and more”.
Trivita CEO and Founder Michael Ellison (right) is also cited, having appeared in a television commercial in which he associates the Nopal cactus (from which Nopalea is purportedly derived), with relieving “symptoms caused by inflammation”.
MICHAEL R. ELLISON: Sitting around a campfire one evening with seven natives, they begin to share with me about the people who have lived in the desert for hundreds of years.
They had no modern conveniences like air conditioning, refrigeration or running water. And they lived without modern medicine and drugs. Yet, they not only survived, they thrived without obesity and diabetes and other inflammatory diseases that so many people suffer from today.
When we discovered the healing properties and the science behind the Nopal cactus, I knew we had to make it TriVita’s top priority and bring this product to market.
We had to get this superfruit, used by the desert natives for hundreds of years, to the many people who are suffering today from symptoms caused by inflammation.
SUSAN ELLISON: I was diagnosed with inflammatory arthritis in my feet and I couldn’t walk without excruciating pain…. I started on Nopalea during the product’s trial period without much hope, but after just six weeks on Nopalea, I was almost pain-free, and after eight weeks, the redness and swelling was completely gone.
All in all the FTC cite 121 pages of Trivita’s bogus health claims in their complaint, with a complete transcript of Trivita’s infomercial and page after page of corporate and affiliate advertising:
In conclusion, the FTC accused Trivita of three counts of violation of the FTC act.
The first count sees Trivita making “unsubstantiated health claims”:
Through the means described in Paragraphs 11-19 (Ozedit: paragraphs 11-19 cite informercial and advertising evidence), (Trivita) have represented,
directly or indirectly, expressly or by implication, that:
a. Drinking Nopalea significantly reduces or eliminates the effects of inflammation on the body;
b. Drinking Nopalea provides significant relief from pain, including, but not limited to, chronic pain, joint pain, back pain, nerve pain, phantom pain,
and pain from inflammation, arthritis, fibromyalgia, surgical procedures, and other conditions;
c. Drinking Nopalea significantly reduces or relieves swelling of joints and muscles;
d. Drinking Nopalea significantly improves breathing and/or provides significant relief from respiratory conditions, including, but not limited to,
sinus infections; and
e. Drinking Nopalea provides significant relief from skin conditions, including, but not limited to, psoriasis.
(These) representations were not substantiated at the time.
The second count is for “false establishment claims”:
Through the means described in Paragraphs 11-19, Defendants have represented, directly or indirectly, expressly or by implication, that:
a. Scientific studies prove that drinking Nopalea significantly reduces or eliminates the effects of inflammation on the body;
b. Scientific studies prove that drinking Nopalea provides significant relief from pain, including, but not limited to, chronic pain, joint pain, back pain,
nerve pain, phantom pain, and pain from inflammation, arthritis, fibromyalgia, surgical procedures, and other conditions; and
c. Scientific studies prove that drinking Nopalea significantly reduces or relieves swelling of joints and muscles.
a. Scientific studies do not prove that drinking Nopalea significantly reduces or eliminates the effects of inflammation on the body;
b. Scientific studies do not prove that drinking Nopalea provides significant relief from pain, including, but not limited to, chronic pain, joint pain, back pain, nerve pain, phantom pain, and pain from inflammation, arthritis, fibromyalgia, surgical procedures, and other conditions; and
c. Scientific studies do not prove that drinking Nopalea significantly reduces or relieves swelling of joints and muscles;
Therefore, the making of the representations constitutes a deceptive act or practice and the making of false advertisements, in or affecting commerce, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52.
And the third for “deceptive representations regarding endorsers”:
Through the means described in Paragraph 11-19, Defendants have presented testimonials for Nopalea by consumer endorsers who purportedly derived health benefits in the ordinary course of using the product.
Defendants have failed to adequately disclose that the endorsers are “Independent TriVita Business Owners” who receive commission on the sale of Defendants’ products.
Therefore, the failure to disclose this fact, in light of the representation made, constitutes a deceptive practice, and the making of false advertisements, in or affecting commerce, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52.
Count 1 can be summarised as Trivita making bogus claims about Napolea with no evidence to support such claims. Count 2 nails Trivita for lying about the scientific studies they claimed had been conducted on their product Napolea and count three hits them for using testimonials from their affiliate without publicly disclosing the affiliate relationship the “endorsers” have with the company.
As result of Trivita’s conduct, the FTC claimed that
consumers have suffered and will continue to suffer substantial injury as a result (Trivita’s) violations of the FTC Act.
In addition, Defendants have been unjustly enriched as a result of their unlawful acts or practices.
A permanent injunction was sought, with the FTC arguing that should one not be granted, Trivita ‘are likely to continue to injure consumers, reap unjust enrichment, and
harm the public interest‘.
On July 11th, the day after the FTC made their filing, Judge Steven Logan granted the FTC their injunction and fined Trivita $3.5 million dollars.
As a result of the injunction granted, Trivita and its affiliates are
permanently restrained and enjoined from making, or assisting others in making, expressly or by implication, including through the use of a product name, endorsement, depiction, or illustration, any representation that such product:
A. Significantly reduces or eliminates the effects of inflammation on the body;
B. Provides significant relief from pain, including but not limited to, chronic pain, joint pain, back pain, nerve pain, phantom pain, and pain from inflammation, arthritis, fibromyalgia, surgical procedures, or other conditions;
C. Significantly reduces or relieves swelling of joints and muscles;
D. Significantly improves breathing or provides significant relief from respiratory conditions, including, but not limited to, sinus infections; or
E. Provides significant relief from skin conditions, including, but not limited to, psoriasis;
unless the representation is non-misleading and, at the time of making such representation, Defendants possess and rely upon competent and reliable scientific evidence to substantiate that the representation is true.
They are also prohibited from
1. making, or assisting others in making, directly or by implication, including through the use of a product name, endorsement, depiction, or illustration, any representation, other than representations covered under Section I of this Order (Ozedit: quoted paragraphs above), about the health benefits, performance, or efficacy of any Covered Product, unless the representation is non-misleading, and, at the time of making such representation, Defendants possess and rely upon competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true.
2. misrepresenting, in any manner, expressly or by implication, including through the use of a product name, endorsement, depiction, or illustration:
A. The existence, contents, validity, results, conclusions, or interpretations of any test or study, in connection with any representations covered by Sections I and II of this Order; or
B. That the benefits of the product are scientifically proven.
3. making, or assisting others in making, directly or indirectly, expressly or by implication, including through the use of a product name, endorsement, depiction, or illustration, any representation about any user or endorser of any Covered Product unless they disclose, clearly and prominently, any material connection between such user or endorser and any Defendant, and any material connection between such user or endorser and any other individual or entity manufacturing, advertising, promoting, offering for sale, selling, or distributing such product.
Trivita neither ‘admitted or denied any of the allegations in the Complaint‘, however the court acknowledged that ‘the facts as alleged in the Complaint will be taken as true‘.
Or in other words, guilty as charged without the case going to court.
As for the $3.5 million fine,
All money paid to the Commission pursuant to this Order may be deposited into a fund administered by the Commission or its designee to be used for equitable relief, including consumer redress and any attendant expenses for the administration of any redress fund.
(Trivita and Trivita’s) officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them who receive actual notice of this Order, are permanently restrained and enjoined from, directly and indirectly, failing to provide sufficient customer information to enable the Commission to efficiently administer consumer redress.
The lingering effects of the injunction are going to follow the company around for years to come too, with the court ordering that
For 5 years after entry of this Order, each Individual Defendant for any business that such Defendant, individually or collectively with any other Defendant, is the majority owner or controls directly or indirectly, and each Corporate Defendant, must deliver a copy of this Order to:
(1) all principals, officers, directors, and corporation managers and members;
(2) all employees, agents, distributors, and representatives who participate in the marketing, distribution, offering for sale, or sale of any Covered Product; and
(3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting.
Delivery must occur within 7 days of entry of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities.
Trivita and its management are also required to submit a “compliance report” to the FTC this time next year. And for the next 20 years anytime anything significant changes within Trivita, management must submit a compliance report with the FTC.
What you’d expect is covered in this compliance report, including activities that might affect Trivita’s compliance obligations, but also smaller things such as Trivita and Michael Ellison having to report a change of address, or taking an ownership position in a business operation or company.
The company also has to
create and retain the following records:
A. Accounting records showing the revenues from all products sold;
B. Personnel records showing, for each person providing services, whether as an employee or otherwise, that person’s: name, addresses, and telephone
numbers; job title or position; dates of service; and (if applicable) the reason for termination;
C. Records of all consumer complaints and refund requests concerning the subject matter of this Order, whether received directly or indirectly, such as through a third party, and any response;
D. All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission; and
E. A copy of each unique advertisement or other marketing material.
Remember, that all has to be filed and kept track of for twenty years going forward (individual records must be kept for five years).
Meanwhile if an email purportedly sent to Trivita affiliates is genuine, it seems the company has failed to identify the FTC compliant and injunction sought and granted against them. Instead, CEO Michael Ellison identifies the injunction as
a resolution and a settlement agreement of a private and confidential investigation by the FTC over the past 15 months.
Ellison’s email appears to double as the notice Trivita are required by the injunction to provide to their “employees, agents, distributors, and representatives”.
Later in the email Ellison goes on to refer to the injunction as a “favourable outcome” for the company. One can only assume he’s referring to a complete shutdown of the company, otherwise what being found guilty of deceptive advertising and being fined $3.5 million for it compares favorably to escapes me.
Whether or not any Trivita affiliates were aware of the FTC investigation into the company these past 15 months is unclear. Here at BehindMLM I certainly wasn’t aware of it, and do not recall reading anything about it in established industry news sources.
Had the injunction not required the company to disclose its existance to their affiliates, whether or not Trivita would have publicly acknowledged the decision against them is unclear.
Somewhat ironically, on their website Trivita advertise that they have a “Senior Vice President for Legal Affairs”.
Gene Henderson has battled cancer, had two knees replaced and had a stint in his heart. But by following TriVita’s 10 Essentials for Health and Wellness, he’s found a way to stay strong through it all and to live well every day.
As Senior Vice President for Legal Affairs, Gene’s foremost responsibility is to ensure that the company and its Affiliate Members are secure for the long term. To do this, he oversees a Legal and Compliance team that monitors all of the company’s marketing materials.
Gene also ensures that TriVita adheres to professional standards and adequately represents product benefits while conforming to FDA, FCC and FTC requirements as well as standards set by the Executive Team.
In addition, he oversees all Affiliate Members activities to make sure that Affiliate Members follow appropriate standards of ethics, excellence, integrity and legal requirements.
Yeah, not sure what happened there…
Footnote: Our thanks to BehindMLM reader “jeff” for tipping us off on this story.
Update 16th July 2014 – The FTC have just made their complaint and the injunction order available on their website.
They’ve also issued an accompanying press-release:
Cactus Juice Marketers to Pay $3.5 Million in Refunds to Consumers for Deceptive Claims that Their Product Treats Diseases
The marketers of a cactus-based fruit drink have agreed to provide $3.5 million for consumer refunds in order to settle FTC charges that they deceived consumers with unsupported claims that their drink, Nopalea, would treat a variety of health problems.
The settlement with dietary supplement company TriVita, Inc. is part of the FTC’s ongoing efforts to stop over-hyped health claims.
An FTC blog entry on the investigation also provides a brief summary of the enforcement action.