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Pinellas firm that paid celebrities for Instagram promos agrees to $1M settlement

Margie Manning

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Cardi B (EricMoore98 / CC BY-SA (Photo credit: https://creativecommons.org/licenses/by-sa/4.0)

Teami LLC, a Pinellas County company that paid celebrities to market teas and skincare products, will return $1 million to consumers, according to the Federal Trade Commission.

The FTC filed a complaint against the firm March 5 in federal court in Tampa, alleging Teami made false or unsubstantiated claims about the efficacy of the products and failed to disclose that influencers were paid to endorse the products.

The case marks the first time the agency has challenged a company for bogus health claims made by social media influencers, according to a report on Politico.

Teami falsely claimed its teas could cause rapid and substantial weight loss and provide other health benefits, according to the FTC. The company advertised primarily through a social media campaign, paying celebrities and social media influencers with millions of followers to endorse their products on Instagram, the FTC said.

The complaint cited Instagram posts by rapper Cardi B, fitness model Brittany Renner and singer/songwriter Jordin Sparks, among others. The FTC said its staff sent warning letters to those celebrities.

Exhibits from the FTC complaint against Teami

The FTC said it initially contacted Teami in April 2018, reminding the company that material connections between endorsers and advertisers, including payments, should be clearly and conspicuously disclosed. In May 2018, Teami put in place a social media policy that instructed influencers to make those disclosures. Despite that, the FTC’s complaint said many Instagram posts by Teami’s paid influencers didn’t comply with the policy, and disclosures about the influencer’s connection to Teami weren’t visible in the first two or three lines of a post and could not be seen unless the consumer clicked “more.”

Teami, based in Seminole, is owned by Adi Halevy, also known as Adi Arezzini, who is CEO, and Yogev Malul, who is creative director, the complaint said. They also are named as defendants in the complaint.

The proposed court order prohibits the defendants from making unsupported weight-loss and health claims and requires clear and conspicuous disclosures about paid endorsements. The order imposes a $15.2 million judgment, which the FTC said is the total sales of the challenged products. The full judgment was suspended however, because the defendants weren’t able to pay it. Instead, the court ordered them to pay $1 million, which the FTC said in a statement would be returned to consumers who were harmed.

A request for comment from the company’s attorney was pending return. The proposed court order says the defendants neither admit nor deny the allegations in the complaint, but waived their rights to appeal or contest the validity of the order.

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