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Beware of Online Marketing Claims about the Value of Mushroom-Infused Instant Coffee

 

  • The Federal Trade Commission (“FTC”) filed a complaint and was granted a temporary restraining order (“TRO”) by the United States District Court for the District of Arizona against multilevel marketing company Success by Media Holdings Inc. d/b/a Success by Health and its executives (collectively “Success by Health”), shutting down an alleged pyramid scheme in violation of the FTC Act, the Merchandise Rule, and the Cooling-Off Rule.
  • The FTC’s complaint alleged that the company made false promises of income based on the sale of instant coffee containing mushrooms, which the company claimed had health benefits, and that the company sold products directly to consumers at the same wholesale price it sold its products to its affiliates, undercutting the ability of affiliates to sell the same products with a markup and make a profit.
  • Under the terms of the TRO, Success by Health is enjoined from continuing its business activities and marketing program. The TRO also places a freeze on the assets of Success by Health, among other things.