The U.S. Federal Trade Commission took action and halted deceptive online marketing tactics by Devumi LLC and cosmetic products company Sunday Riley Skincare.
The now-defunct Devumi and its owner and CEO German Calas Jr. used websites Devumi.com, TwitterBoost.co, Buyview.co and Buyplans.co to sell fake indicators of social media influence, including fake followers, subscribers, views and likes to users of social media platforms, including Microsoft Corp.'s LinkedIn Corp., Twitter Inc., Google LLC's YouTube LLC, Pinterest Inc., Vine and SoundCloud.
As part of its settlement with the agency, Devumi has been banned from selling or assisting others in selling social media influence, while a monetary judgment of $2.5 million has been imposed on Calas. The settlement requires Calas to deposit $250,000 first, with the rest deferred unless it is discovered that he misrepresented his financial situation.
The FTC also settled with Sunday Riley Skincare over allegations that its founder instructed employees to leave fake positive reviews on the Sephora website between November 2015 and August 2017. The FTC's complaint charged the company and its founder of making false or misleading claims about the products and failing to disclose that the reviews were written by company staff.
The proposed administrative order settling the FTC's allegations against Sunday Riley Skincare prohibits the company and its founder from misrepresenting the status of any endorser or person reviewing the products and from making any representation about any consumer or another product endorser. It also requires the company to instruct employees and agents to disclose their connections to the products in any endorsements.