Following an agreement with Michigan Attorney General Dana Nessel’s office, two related Rockford-area businesses have agreed to stop marketing and selling phony products they claimed would help protect people from the coronavirus disease 2019 (COVID-19).
Frequency Apps Corp. and Biores Technologies Inc. signed an assurance of voluntary compliance (AVC) document and agreed not to market or sell the “Coronavirus Defender” patch. The AVC is a tool provided for in the Michigan Consumer Protection Act (MCPA) and allows disputes to be settled without litigation. The agreement was filed Wednesday in Ingham County Circuit Court.
The companies contended they never sold any of the patches; however, they are required under the agreement to pay the State $1,000 for its enforcement efforts by May 1, as well as $1,000 for any consumer who produces proof by Dec. 31 that they purchased one of the patches – with half of that money going to the consumer and the other half to the State.
Under the agreement, the companies will cease and desist in engaging in any unfair and deceptive business practices, including offering for sale any product purportedly for the prevention or treatment of COVID-19.
“Deceitful business practices in any environment are unacceptable, but they carry a heavier stench of impropriety during a public health emergency like what Michigan is experiencing now,” Nessel said. “I’m proud of the work my Corporate Oversight Division has accomplished in bringing this matter to a close and stopping another bad actor from profiting on the fears of hardworking Michiganders.”
Following up on a consumer complaint, the Attorney General’s Office in late March sent a cease and desist letter to Frequency Apps Corp. and Biores Technologies Inc.
The businesses were marketing the Coronavirus Defender patch through emails, and claimed the patch could “help aid the immune system to defend itself against exposure to the virus,” and “help lessen the effect of the virus if you already have” it.
The patch was priced at $49.99, but the companies stated that consumers could receive a 30-day supply of the patch for free when buying a 45-day supply of any patches the companies sell.
The companies were likely in violation of the MCPA because they were:
• Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have, or that a person has sponsorship, approval, status, affiliation or connection that he or she does not have.
• Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer.
• Causing coercion and duress as the result of the time and nature of a sales presentation.
• Making a representation of fact or statement of fact material to the transaction such that a person reasonably believes the represented or suggested state of affairs to be other than it actually is.
Price-gouging is also a violation of the MCPA. During the COVID-19 pandemic, the Attorney General’s Office has received 3,582 price-gouging complaints as of 7 a.m. Wednesday.
Moreover, Gov. Whitmer issued an executive order on price-gouging which states a person must not offer for sale or sell any product in this state at a price that is more than 20 percent higher than what the person offered or charged for that product as of March 9 unless the person demonstrates that the price increase is attributable to an increase in the cost of bringing the product to market or to an extraordinary discount in effect as of March 9.
Consumers can file a complaint online or by calling the Consumer Protection tip line, 877-765-8388. Hours of operation are between 8:30 a.m. and 4:30 p.m. Monday through Friday.
Published: Fri, Apr 17, 2020
