Misleading “Sprinkle, Eat, and Lose Weight” Claims Result in $26M Refund

The Federal Trade Commission (FTC) has announced that Epiq Systems, Inc., a redress administrator, will be mailing 477,083 refund checks totaling $26,023,329 to consumers who bought the sprinkle-on weight-loss supplement Sensa. The average refund each consumer will receive is $54, but that amount may differ based on how much he or she actually lost. The checks must be cashed within 60 days of their issuance date.

The refund announcement is the result of a January 2014 settlement with the national marketers of Sensa, who deceived consumers by claiming they could “sprinkle, eat, and lose weight” by using the supplement and by making misleading endorsements. The settlement imposed a $46.5 million judgment against the marketers, and required them to pay $26.5 million, with the rest suspended due to their inability to pay. However, if it is later determined that the financial information the marketers gave the FTC is untrue, the full amount of their judgment will become due.

FTC Complaint

The FTC charged that California-based Sensa Products, LLC, its parent company, Sensa, Inc., formerly Intelligent Beauty, Inc., Adam Goldberg, chief executive officer of Sensa, Inc., and Dr. Alan R. Hirsch, the creator of Sensa and a 10 percent owner of Sensa Products, LLC, deceptively advertised that the powdered food additive enhances food’s smell and taste, making users feel full faster, so they eat less and lose weight, without dieting, and without changing their exercise regime.

According to the FTC complaint: (1) the defendants typically charged $59 plus shipping and handling for a one-month supply of Sensa; (2) the powder was provided in twelve flavors, and marketed through radio and print advertisements, retail chains such as Costco and GNC, a promotional book, television ads and infomercials, the Home Shopping Network, ShopNBC, telemarketing, and the Internet; and (3) U.S. sales of Sensa totaled more than $364 million between 2008 and 2012.

The complaint further alleged that:

  • The defendants failed to disclose that some consumers were compensated for their endorsements of Sensa. In some instances, compensation included payments of $1,000 or $5,000, and trips to Los Angeles.
  • Hirsch, who conducted two of the studies cited in the ads and wrote a promotional book about Sensa, gave expert endorsements that were not supported by scientific evidence, and provided the means for the other defendants to deceive consumers.
  • The defendants falsely cited Dr. Hirsch’s studies as clinical proof that consumers could lose substantial weight without dieting or exercise.

Settlement

Under the January 2014 settlement, the defendants are barred from: (1) making weight-loss claims about dietary supplements, foods, or drugs, unless they have two adequate and well-controlled human clinical studies supporting the claims; (2) making any other health-related claim unless it is supported by competent and reliable scientific tests, analyses, research, or studies; and (3) misrepresenting any scientific evidence.

Dr. Hirsch is specifically barred from: (1) providing expert endorsements unless he relies on both competent and reliable scientific evidence and his own expertise; and (2) providing to others studies, promotional materials, endorsements, or other means for deceiving consumers.

The defendants also must disclose any material connections with the endorsers of a product or program, as well as with anyone conducting or participating in a study of the product or program.

Insolvency Reported

While consumers who purchased Sensa may still file a complaint with the FTC, no additional funds are presently available. Sensa, Inc. and Sensa Products, LLC have ceased operations. Sensa, Inc. and Sensa Products, LLC entered into Assignments for the Benefit of the Creditors under California state law on October 17, 2014. An Assignment for the Benefit of the Creditors is a form of insolvency under state law.