The three defendants that have made a settlement are Spear Systems, Inc, Bruce Parker, an Australian national, and Lisa Kimsey.
They marketed and sold a pill called Naturaslim, which they said contained hoodia gordonii .
The FTC's complaint alleged the defendants claimed it caused rapid and substantial weight loss, including as much as four to six pounds per week There were also question marks over whether the product really did contain hoodia, but the settlement did not deal with this issue.
Steve Wernikoff, staff attorney for the FTC, told NutraIngredients-USA.com: "According to testimony from a medical expert that the FTC presented to the court, even assuming the product did contain hoodia, there is no credible medical evidence to support the claim that hoodia gordonii causes weight loss."
Daniel Fabricant, vice president of scientific and regulatory affairs for Natural Products Association, explained that manufacturers can make a "weight maintenance type claim" , but it is not FDA (Food and Drug Administration) approved, so wording tends to resemble "helps maintain healthy weight".
However, issues surrounding the product have made it a "very debatable topic for some time" Fabricant added, referring to other court battles over the authenticity of the hoodia supply.
This is the latest in a long line of efforts to crack down on false health claims that can discredit the dietary supplements industry as a whole, and it is not the first time there has been a dispute over the use of hoodia.
Such settlements have been welcomed by the industry as its credible majority has invested significantly in efforts to retain its reputation in the face of the few companies who are not playing by the rules.
FTC settlement The FTC sued a group of defendants in October last year in the US, Canada and Australia for using spammers to drive traffic to the websites where they sold the false supplements.
The operations of the three defendants who have now settled charges were considered to violate federal laws in terms of making health claims and they are now barred from making false or unsubstantiated claims about health benefits of any food of any food, drug, or dietary supplements.
The settlement also states they are not allowed to violate the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) and they have to give up $29,000 in ill-gotten gains.
There are five other defendants who have not settled this case Hoodia Hoodia, or hoodia gordonii, is a small African cactus traditionally used by the Khoi-san people of the Kalahari desert to suppress appetite during hunting campaigns that could last many days as antelope such as the kudu were tracked to exhaustion.
Hoodia is also grown in Namibia and Botswana and newer plantings have occurred in Israel and the US as global interest has risen on the back of scientific support and the entrance of major food manufacturers such as Unilever.
But it is material sourced from China and India that has been fingered as the source of much fake hoodia.
However, according to hoodia supplier Afriplex, based in South Africa, this is less of a problem now than it was two years ago when inflated prices attracted fraudulent traders and suppliers intent on exploiting the sought-after ingredient.
This matter is at the heart of a court action lodged by a Kansas-based contract manufacturer, Certified Natural Laboratories, which has sued New Jersey-based Stryka Botanics for supplying what it considers fake hoodia.
Stryka told NutraIngredients-USA.com last week that it stood by its products and would fight the action "to the bitter end", noting it was the first such action ever-mounted against it and that it continued to supply more than 10 customers with hoodia.