Central Coast Nutraceuticals, a company specializing in Acai berry and other health products, has been forced to reach a settlement with the Atty Gen of Arizona. The terms of the settlement include a $1,375,000 payment to cover civil penalties, the state’s cost in bringing the action, and customer restitution, along with a promise to eliminate shady practices in their on line advertising and selling.

The main problem with the CCN business model was that it was based on fraud and deception. Customers were loaded with a low-cost acai pills “free trial offer” before being signed up – without their knowing – an ongoing subscription to expensive health goods, many of which they had no interest in purchasing in the first place.

Once caught in the CCN trap, customers found it difficult to change or cancel their acai order. E-mails were ignored completely, and phone calls put on hold for well over an hour. This behavior lead to hundreds of complaints being directed to the Arizona attorney general’s office, and Terry Goddard eventually decided to push ahead and bring a case against CCN.

CCN settlement can only be seen as an admission of guilt of the part they played in this tragedy.

What a settlement will do to the acai diet industry as a whole time will only tell, but it is likely that customer confidence in on line purchase of health products – already at an all-time low – will drop still further. The long-term good of the settlement – and the action brought it about – cannot be denied, but in the short term expect to see innocent and legitimate businesses suffer as a result.