It turns out that there is not a magic pill capable of reversing the effects of aging on the human brain, including memory loss, or at least not one we can remember right now. The FTC recently reminded the marketers of Procera AVH, a dietary supplement that allegedly combats memory loss and cognitive decline, of their responsibilities as advertisers and shot down claims that the supplement was clinically proven to significantly improve memory, mood, and other cognitive functions because these claims were too good to be true. After the FTC brought a lawsuit challenging numerous claims made in the advertising of Procera, the parties agreed to a settlement that included a permanent injunction and a $1.4 million monetary damages award that must be paid to suspend much larger stipulated damages totaling more than $150 million.
According to the complaint filed by the FTC on July 1, 2015, the defendants marketed and sold Procera AVH as a “solution” to memory loss and cognitive decline and targeted people experiencing these problems as symptoms of ageing. Procera AVH was usually sold for a price of $79 per bottle, or $119 for three bottles for consumers who signed up for the continuity purchase plan, which included automatic refills. Among the types of challenged advertisements were infomercials, direct mail flyers, newspapers, and Internet advertisements.
The companies allegedly used ads to play on the fears of older consumers, asking them to imagine lives in which, for example, they couldn’t handle their own financial matters, couldn’t be trusted to buy anything, had to move into a nursing home to “live with strangers,” and other unnerving scenarios as a result of memory loss and declining cognitive function. The advertisements then suggested Procera as a solution to these frightening scenarios.
The FTC’s complaint further alleged that efficacy claims in advertising for Procera AVH were false, misleading, or unsubstantiated. It claimed that the defendants falsely claimed that a scientific study proved the efficacy of Procera. The complaint also charged Reynolds, the founder and chief science officer of Brain Research Labs, one of the defendants, with making deceptive expert endorsements for Procera AVH.
On July 9, 2015, the FTC reached settlements with KeyView Labs, Inc., Brain Research Labs, LLC, George Reynolds (a/k/a Josh Reynolds), John Arnold, and three related companies, all of whom were involved in the marketing of Procera AVH. The two proposed settlement orders entered against the defendants in the Central District of California impose a $61 million judgment against KeyView and a $91 million judgment against the remaining defendants. However, these judgments will be suspended provided the financial statements KeyView and the other defendants produced are not found to be inaccurate and provided they pay out a lesser sum. Accordingly, the settlement terms require the defendants to pay $1 million to the FTC, and $400,000 to satisfy a judgment obtained by local law enforcement in Santa Cruz, California against Brain Research Labs and Reynolds. If the $400,000 is not paid to satisfy the Santa Cruz judgment, it must instead be paid to the FTC.
In addition to these monetary payments agreed to under the settlements, a permanent injunction bars the defendants from making similar deceptive claims about Procera AVH in the future and from misrepresenting the existence, results, or conclusions of any scientific study.
Regardless of whether or not the defendants in this case use their own product, the FTC’s attack on their advertising is surely something they won’t soon forget.
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