Buyer Beware: Web Supplement Scams

Surfing the internet comes with its hassles - like those advertisements that pop up all the time.

Many try to catch you eye with trial offers. But in the case of one diet supplement - its deal could have you losing a lot more than just a little weight, as CBS News correspondent Kelly Cobiella reports in conjunction with Business Week

You've probably seen the ads. They're the latest miracle supplements - acai berry, resveratrol, colon-cleansers - all promising to make you feel better, look better, live better, with news reports that seem to back up the claims.

(For more, read Business Week's report, Resveratrol: The Hard Sell on Anti-Aging.)

"My wife thought it would help with the weight," said John Lawless, a scam victim. "We're open to trying things - nutritional supplements, things like that."

Lawless says the news reports helped sway him and the price was right: 99 cents for a trial offer of resveratrol ultra.

But instead of one bottle, he was sent three, at a price of 99 cents for the first one and more than $87 for each of the other two.

When he called the company, he was told that the trial offer automatically turned into a monthly subscription after 15 days. It was all, the company said, in the fine print.

"Must be very fine print," said Lawless, who said he felt he had been scammed, "to put it mildly."

"The scam is once they have the credit card number they proceed from shipping and handling to monthly orders and billing you month after month," said Mike Galvin of the Better Business Bureau.

Galvin has received more than 3,000 similar complaints so far this year. "It's one complaint after another," he said.

And for each one, he says, there are many more customers who don't even bother to register a complaint. The company behind the resveratrol ads, FWM Labs, has an "F" rating.

"An F is a flag, an F is a failure. An F is the lowest grade that you can possibly have and that should be a sign to the public not to deal with that company," Galvin said.

The problem is customers don't know who they're dealing with. The company has dozens of Web sites but none of them are registered to FWM. Internet security expert Alex Stamos says it's not how a reputable company would operate.

"I'm guessing it's a very important part of their business model to stay ahead of the customer complaints and stay ahead of people being able to figure out who they are," Stamos said.

It took CBS News a while, but we finally tracked down FWM at a warehouse in Hollywood, Fla. where dozens of workers were processing, packing and shipping out pills as fast as the labels would print.

"We have a customer service center," said Brian Weiss, FWM's 29-year-old CEO. "If we have complaints we contact the customer immediately."

But we spoke to dozens of customers who found it next to impossible to get through to FWM. Many vented their frustrations on online forums like complaintsboard.com, calling FWM's business a "fraud" and a "rip-off." A Google search for "FWM" turns up page after page of such complaints.

"We've sold to million and a half customers since November," Weiss said. "So in the overall picture, the number of complaints seems high, but it's low when compared to the number of orders we've shipped out."

In fact, FWM is one of the most complained-about companies in the nation. The Florida Attorney General is investigating the company and the Federal Trade Commission is looking into the marketing tactic they - and companies like them - use. News organizations including CBS have tried to get FWM and others to stop misusing their reports to sell products.

As for John Lawless, he returned all three bottles of resveratrol ultra unopened. A phone representative told him he'd receive a full refund for the bottles.

FWM did send him a refund - for a single bottle.

More on Avoiding Internet Scams

Federal Trade Commission fact sheet on dietary supplements (PDF). The fact sheet deals both with the fact that commercially marketed supplements may be ineffective or even dangerous and with sellers' unscrupulous marketing practices. It reminds consumers to deal only with companies that have a listed name, address and phone number and to "Get all promises in writing and read all paperwork before making any payments or signing any contracts. Pay special attention to the small print."

FBI tip sheet on Internet fraud.

National Consumer League page on Internet fraud.

Center for Science in the Public Interest article (PDF) about Internet scams, particularly those promoting acai berries for weight loss. The article exposes the marketers' use of fake blogs by supposed working mothers (really just marketing text with stock photos of models) and misappropriation of celebrity endorsements and product reviews.

New York Times article discussing unsubstantiated health claims about acai berries and consumer complaints about shady online selling practices.

Better Business Bureau article on supplement scams, mentioning specific companies to avoid.

Better Business Bureau general tips for shopping online.

Better Business Bureau page on FWM - read about the company's track record or file a complaint.

Consumer Reports blog about resveratrol and acai berry scams.

Florida Attorney General's page on investigation of FWM.

The Nutrition Business Journal.

Complaintsboard - a site to share experiences with other Web users and get advice on dealing with online businesses.

Ripoff report - another site where users can post complaints and share with others.