Creaxion Corp. and gymnastics mag posted undisclosed athlete endorsements

Zika Seekers

It would seem natural, if a little grim, that HealthPro Brands, creator of FIT Organic Mosquito Repellent, would take advantage of the furor surrounding the 2016 Zika virus outbreak. And they did figure out a decent hook: The Summer Olympics, hosted by Brazil, were rapidly approaching, and since Brazil was ground zero for Zika infections, the games would serve as the perfect platform to get FIT Organic some attention.

HealthPro contracted PR firm Creaxion Corp., which sprang into action.

Flipping Out

Creaxion tapped Inside Publications, publishers of Inside Gymnastics magazine, to execute a campaign that summer. But according to the Federal Trade Commission, the companies took an unethical turn.

Among their other marketing efforts – such as designating FIT Organic Mosquito Repellent as the "Official Mosquito Repellent" of Inside Publications and providing gift baskets for the top contenders on the U.S. gymnastics team – the FTC claims that the companies (and their principals, also named as co-defendants) tapped two Olympic gold medalists, Carly Patterson Caldwell and Jake Dalton, to serve as endorsers, and paid them to post social media endorsements that were drafted, reviewed and monitored by the company principals. "I'm a buffet for mosquitos, so this is a game changer!" Patterson posted on Instagram.

The Takeaway

Unfortunately, the FTC claims, neither endorser disclosed his or her financial relationship with Creaxion; Inside Publications reposted the endorsements and, to make matters worse, also ran FIT Organic ads that were disguised as legitimate magazine articles. The FTC also accused Creaxion of reimbursing employees and friends for their reviews of FIT Organic on Walmart's website, where the material connection between those reviews and the product was also undisclosed.

The FTC's suit, filed in November, accused the defendants of false representations, failure to disclose material connections between them and the endorsers, and deceptive formatting of their advertising. In addition to the allegations relating to the athlete endorsements, Creaxion was also accused of creating a consumer review program that reimbursed Creaxion employees for purchasing the product and posting a review online. These reviews allegedly failed to disclose that the individuals were reimbursed for purchasing the product and that they worked for Creaxion. The parties settled in short order, with both defendants barred from engaging in similar practices in the future. Public comment on the settlement agreement will close on Dec. 13.

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