Man Who Allegedly Violated Deceptive Marketing Court Order Held in Contempt

Print Friendly, PDF & Email

October 15, 2015

deceptive-marketingLast Wednesday, a federal court found Robert Douglas Krotzer in civil contempt for violating a court order stemming from an earlier deceptive marketing lawsuit filed by the Federal Trade Commission (“FTC”) and Florida Attorney General’s Office.

How can the marketer get out of this mess?

FTC and AG’s Deceptive Marketing Lawsuit and Court Order

In April 2010, the FTC and Florida AG’s Office sued Krotzer (also known as “Dr. Doug”) and his business, the Alcoholism Cure Corporation (“ACC”), in the federal district court in Jacksonville, Florida. The deceptive marketing action alleged that Krotzer and ACC used websites, search engine advertisements and email marketing lists to advertise an online monthly subscription program named the “Permanent Cure,” which purportedly offered consumers customized cures for alcoholism.

The FTC and attorney general’s deceptive marketing lawsuit alleged that the defendants, in marketing the Permanent Cure program, used false advertisements, made unsubstantiated claims and engaged in a number of other unfair and deceptive acts and practices. According to court records, Krotzer and ACC raised over $693,000 from consumers between 2005 and 2009 before the Better Business Bureau’s (“BBB”) National Advertising Division tipped off the FTC.

In July 2012, the Court issued its Final Judgment and Order in the action. Among other things, the Order required Krotzer and his company:

  • to pay $732,480 as a reasonable approximation of consumer injury resulting from their alleged violations of Florida State and federal laws; and
  • to deliver: (i) a report to the FTC and Florida Attorney General’s Office listing all persons who registered for or purchased the Permanent Cure program; and (ii) a notice to each such consumer regarding the deceptive marketing lawsuit.

Dr. Doug Held in Contempt

On October 7, 2015, the court held Krotzer in contempt for failing to abide by the July 2012 Order. The Court observed that Krotzer had failed to pay any portion of the $732,480 judgment, and that “Krotzer’s compliance reports have been untimely, inadequate, and misleading.”

Krotzer was given 60 days to:

  • return $8,099 that was purportedly collected from consumers after the July 2012 Order;
  • deliver the required customer list and notices, or surrender his computer hardware to the FTC and Florida AG’s Office and provide proof of his inability to deliver the list and notices;
  • divulge all of his current income, assets and liabilities, including bank accounts and household expenses, the structure of his family trust and any assets that he may have transferred to a third party;
  • prove his alleged inability to pay the monetary judgment against him; and
  • prepare and produce a detailed compliance report.

In the event that Krotzer does not comply with this contempt order within 60 days of its issuance, he will be remanded to the custody of the U.S. Marshals and incarcerated.

Deceptive Marketing Lawsuits Are No Joke

The legal battle described above demonstrates the importance of abiding by applicable state and federal regulations when operating in the marketing space. Marketers that do not comply with the terms of a court order risk being held in contempt and facing stiff financial penalties and/or jail time.

If you are interested in learning more about this topic, or if you have been served with legal process concerning your marketing practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

Attorney Advertising

Related Blog Posts:

Avoid Deceptive Internet Advertising Claims

FTC Sues Company, Officers for Dietary Supplement Marketing

Carrot Neurotechnology Settles Deceptive Advertising Claims with FTC

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

Schedule a Call
In The Know

Trending Topics

Creating a Viral and Legally Compliant "Pin to Win" Contest- Klein Moynihan Turco

Creating a Viral (And Legally Compliant) “Pin to Win” Contest

Print Friendly, PDF & Email

We have frequently written about the marketing benefits associated with the use of promotional contests and sweepstakes.  Promotional contests and sweepstakes often appear on social media platforms, which provide companies with a free and effective means to increase the number of consumers participating in their respective contests. While companies must

Facebook Decision defines a TCPA Autodialer- Klein Moynihan Turco LLP

Facebook Aftermath: Courts Clarify Definition of TCPA Autodialer

Print Friendly, PDF & Email

On April 1st, the U.S. Supreme Court released its opinion in Facebook, Inc. v. Duguid, marking a newly clarified definition of “autodialer” within the meaning of the Telephone Consumer Protection Act (“TCPA”). In the two weeks that followed, two federal courts have directly addressed the definition of TCPA autodialer as

Critical Role that TCPA Plays in Outbound Telemarketing- KMT

The Critical Role that the TCPA Plays in Outbound Telemarketing

Print Friendly, PDF & Email

If you’re running any sort of outbound telemarketing campaign – phone calls, voicemail drops, or text messaging – you need to understand the Telephone Consumer Protection Act (TCPA) and its enabling regulations. Call center operators are not the only businesses that employ outbound telemarketing to reach out to consumers. Using

How to Use Promotional Marketing the Legal Way: Klein Moynihan Turco LLP

How To Use Promotional Marketing The Legal Way

Print Friendly, PDF & Email

The use of promotional contests, games and sweepstakes marketing can be a dynamic and cost-effective way to increase sales, build a database of interested consumers and otherwise increase brand awareness and buzz. Consumers are more easily attracted to your marketing message by the opportunity to win prizes than with more

Share on facebook
Share on google
Share on twitter
Share on linkedin