Arizona Supplement Firm Settles Deceptive Ad Suit

Suit claimed consumers got stuck with unauthorized charges

December 9, 2009

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The State of Arizona has settled deceptive advertising charges with the maker of nutritional supplements, with the company, Amir & Sanchez Nutraceuticals, agreeing to pay $175,000.

The lawsuit filed by state Attorney General Terry Goddard alleges that Larby Amirouche, 20, and Robert Thomas Norton, 22, the young owners of the company 22, violated the Arizona Consumer Fraud Act by using deceptive advertising techniques.

According to court documents, the defendants used the Internet to advertise "14-day risk-free" trial offers of various "nutritional supplements," purportedly for only a nominal cost for shipping and handling. The defendants failed to adequately disclose to consumers material terms and conditions that rendered the trial offers far from "risk-free" and resulted in significant, unauthorized charges to consumers.

Documents also state that the defendants failed to adequately disclose to consumers who ordered a "risk-free trial offer" that unless they canceled within the "14-day trial period" they would be charged full price for the product, plus additional shipping and handling, and would automatically receive subsequent monthly shipments of the product.

The lawsuit further alleges that the defendants falsely represented that consumers could cancel by simply calling a toll-free telephone number, when frequently consumers could not get through to a customer service representative or were put on hold for long periods of time and sometimes disconnected.

Court documents state that many consumers were told that their cancellation request could not be processed due to technical problems or were led to believe that their cancellation request was processed only to be charged for more unauthorized orders.

Additionally, documents state that the defendants deceptively enrolled consumers into "21-day free memberships" of diet consultation programs that required the consumer to take affirmative action to avoid subsequent monthly charges.

The settlement calls for the defendants to pay $140,000 in civil penalties, $15,000 in costs and fees and $20,000 in restitution.

This is the second nutrition supplement fraud case Arizona has settled in recent months. In June 2009, Goddard announced a record $1,375,000 settlement with Central Coast Nutraceuticals, Inc. and its Phoenix owner for allegedly defrauding customers purchasing nutritional supplements.

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