The FTC and Florida Attorney General Bill McCollum have charged a Florida company that “touted a phony cure for alcoholism” with false advertising claims, false efficacy claims, false privacy claims, false claims about professional qualifications, unauthorized billing and deceptive trade practices.
Among the allegations in a civil lawsuit against Alcoholism Cure Corp. were that it offered tiered programs depending on the severity of a member’s involvement with alcohol — and if a member wanted to pull out of the program, the company threatened to expose the member’s alcohol dependence publicly.
Alcoholism Cure Corp. also did business as Alcoholism Cure Foundation and used at least two .org websites to sell its program, according to court filings.
Among the other allegations in the case were that the company disclosed health information about its customers to bill collectors, credit-card companies and the Better Business Bureau in a bid by the firm to win cases when customers disputed charges.
The company, which is operated by Robert Douglas Krotzer, also placed restrictions on how clients could cancel.
“Defendants require consumers to submit ‘Proof of Continued Drinking’ to prove that they are not cured,” the FTC and McCollum said in court filings. “Defendants state the submission should include, among other items, notarized notes from the consumer’s doctor and five friends stating that the consumer continues to drink, liquor receipts from the previous two months, and several kinds of laboratory testing.
“Unless consumers meet all the requirements set forth in this paragraph, Defendants deem them ‘cured’ and claim the consumers owe the full cost of the Program, which differs by consumer but generally ranges from $9,000 to more than $20,000,” the complaint alleged.
Litigation threats against customers occurred routinely, according to the complaint.
“Defendants warn consumers that failure to pay the demanded amount could result in litigation and the attendant ‘unwanted publicity,’” the complaint alleged. “In fact, Defendants have filed at least eleven cases in Jacksonville, Florida small claims court against consumers who registered for the ‘Permanent Cure’ Program seeking several thousand dollars each. In the cases, Defendants reveal the consumers’ personal and health information, including the fact they are alcoholics, by not filing the court pleadings in a nonpublic manner.”
Customers were billed when canceling or attempting to cancel the program, according to the complaint.
“Defendants bill consumers’ credit card or PayPal account consecutive times without authorization, often in amounts far exceeding the monthly subscription fee, until the account will no longer accept charges,” the complaint alleged. “When consumers reverse or dispute the unauthorized charges, in numerous instances Defendants disclose consumers’ personal and health information to consumers’ credit card company or to PayPal in an effort to discredit consumers and retain the money obtained as a result of the unauthorized charges.”
The company also disclosed members’ health information to the Better Business Bureau if they lodged a complaint, prosecutors said.
Even bill collectors hired by the company were given access to members’ health information, prosecutors said.
“In some instances, when Defendants have referred a consumer to a debt collection agency for collection, Defendants have disclosed to debt collection agents the personal and health information of all the consumers who have registered for the ‘Permanent Cure’ Program,” the complaint alleged.
“Defendants disclose the information by giving the debt collection agents full access to the unencrypted email account where Defendants store consumers’ personal and health information and instructing the debt collection agents to search through all the consumers’ personal and health information until they find the information related to the particular consumers at issue,” the complaint alleged.
Krotzer, the FTC said, was referred to as “Dr. Doug” — even though he is not a physician.
The program pitched monthly subscriptions for what it dubbed the “Heavy Drinker” program ($59.96 for the first month and $179.96 per month thereafter) or the “Very Heavy Drinker program” ($99.96 for the first month and $269.96 per month thereafter), the FTC said.
Sales totaled at least $693,000 between 2005 and 2009, the FTC said.
Four websites were used to pitch the program: AlcoholismCure.org,
DetoxificationThatWorks.com, Healthy-HighAlcoholSubstitute.com, and
AlcoholFree.org.
The program also was advertised “on online search engines, such as Google and Yahoo; through dissemination of newsletters via email distribution lists; and via individual emails,” the complaint alleged.
“Permanent Cure” relied on “concoctions of dietary supplements such as vitamin C, St. John’s wort, and niacin,” the FTC said.
Read the FTC/McCollum complaint.