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business newsInfomercials: Still Parting Fools, Money
Late-night staple hits prime-time, sparks FTC investigation.
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And infomercials like this one were bound to make you feel like you were slowly losing your poor, sleep-deprived mind:
But with a marked decrease in disposable advertising dollars, the massive infomercial industry is heading to prime time. Even President Obama starred in an infomercial-style 30-minute campaign ad airing on 7 separate networks, just days before the election. And having made the move to prime time, infomercials generated $200 billion in 2007 and started appearing on channels like Fox News (NWS), CNBC (GE), and CBS (CBS).
But the industry -- and its unfortunate habit of making unsubstantiated claims -- has also caught the eye of the Federal Trade Commission (FTC).
The FTC recently reached a $7.5 million settlement with QVC (LMDIA), the 24-hour infomercial cable channel, over claims made about 3 dietary supplements and Lipofactor Cellulite Target Lotion, an anti-cellulite skin cream - and a company claiming its Kinoki Foot Pads could cure everything from depression to diabetes has also been served with FTC charges.
In the past few months, the marketing team behind the Ab-Force weight-loss device -- a product marketed as a convenient alternative to actual, you know, exercise -- agreed to pay a $7 million settlement. The makers of the Hawaii Chair, however, are still safe:
But the FTC’s biggest target has been the infamous Kevin Trudeau. Trudeau, who has appeared in or produced hundreds of infomercials, first got in trouble in the early 1990s, when he began pitching a product he claimed could enhance memory. He eventually used the credit cards of 11 customers to fraudulently make over $122,000 in charges.
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