Salt Lake City-based company has agreed to pay refunds to consumers who purchased its weight-loss tablets to settle a class-action lawsuit that claimed its advertising slogan, “Eat All You Want & Still Lose Weight,” was deceptive.
Under the proposed settlement, Basic Research will pay a refund of $25 per box after being sued by law firms on behalf of consumers who purchased the product called Akavar beginning in 2007.
A Basic Research representative didn’t respond to requests for comment. But the company has denied any wrongdoing and would still be able to use the slogan under the proposed agreement.
Salt Lake City attorney Jon Harper, who represents consumers, told The Salt Lake Tribune that he couldn’t comment other than to say the litigation was resolved “on terms satisfactory to the parties.”
In 2007, a proposed class-action lawsuit was filed in U.S. District Court in Utah against Basic Research on behalf of consumers who bought Akavar based on the company’s advertising. A second similar complaint was filed in state court in California in 2008.
The two lawsuits, which were eventually consolidated into one action in federal court in Utah, said the company lacked a scientific basis for the weight-loss claims and was deceiving consumers.
Akavar was sold by major retailers and marketed as a wonder pill in which consumers could “Eat All You Want & Still Lose Weight … (And we couldn’t say it in print if it wasn’t true!)”
The company sold 60 capsules for $39.99 and two bottles for $79.98 with a third one for free, and sales brought in millions of dollars, according to court documents.
In 2006, the Federal Trade Commission fined Basic Research $3 million and reached a settlement requiring the company to have a scientific basis for the claims of its products.
The FTC and Basic Research sued each other in 2009 in federal court in Utah over whether the company was violating the 2006 deal.
But last year, U.S. District Judge Clark Waddoups sided with Basic Research, noting two of four case studies done in 2001 suggested the herbal compounds in Akavar helped users to lose weight. His decision is cited in the proposed settlement of the class-action lawsuit, The Tribune reported.
Source: Associated Press
Filed Under: Drug Discovery