Excerpt
Effen Ads tricked users by sending spam emails that falsely claimed endorsements from news organizations and celebrities to promote fraudulent schemes.
Our analysis
Effen Ads, LLC and its owners collaborated with an affiliate marketing network, W4 LLC, to promote a fraudulent work-from-home scheme using spam emails sent to consumers. These emails falsely claimed to be from reputable news organizations like CNN or Fox News in the "from" lines and misleadingly suggested endorsements from well-known figures like Warren Buffett and Suze Orman in the "subject" lines.
- The case revealed that these deceptive emails directed recipients to websites featuring fabricated news stories and false celebrity endorsements. Upon clicking the links, consumers were redirected to websites promoting Effen Ads' work-from-home schemes, which operated under various brand names.
This deceptive practice not only violated Section 5(a)(1) of the CAN-SPAM Act, 15 U.S.C. § 7704(a)(1), but also relied on fake social proof to deceive consumers.
Outcome
Effen Ads has been ordered to pay more than $1.4 million and is prohibited from misrepresenting or assisting others in misrepresenting material facts, including claims involving celebrity endorsements, truthful endorsements, independent user endorsements, impartial reviews, typical consumer experiences, objective news reports, and independent product testing.
Parties
Federal Trade Commission and Effen Ads, LLC
Case number
2:19-cv-00945
Decision
Related deceptive patterns
The fake social proof deceptive pattern creates an illusion of popularity and credibility by presenting users with falsified or exaggerated endorsements, such as reviews, testimonials, or activity messages. This manipulation preys on the social proof cognitive bias, in which which individuals are likely to conform to the behaviour of others. It is a shortcut that allows people to avoid the hard work of carrying out a critical evaluation of their own. By using the fake social proof deceptive pattern, providers can trick users into making a purchase or engaging with their offerings.
Related laws
Prohibits the transmission of electronic messages with materially false or misleading header information, aiming to prevent deceptive practices in commercial email communications.