Texas cracks down on Mannatech

Mannatech, its owner and related entities were found in violation of the Texas Deceptive Trade Practices Act, which can result in civil penalties of $20,000 per violation, as well as going against the Texas Food, Drug, and Cosmetic Act, which can result in up to $25,000 per day, per violation.

State judgments such as these can pick-up where the Federal Trade Commission - which is increasingly on the look-out for misuse of consumer testimonials - has not reached, or not yet reached.

Mannatech has in particular been charged with encouraging salespeople to make use of misleading testimonials.

"With today's enforcement action, the Office of the Attorney General seeks to shut down an elaborate scheme to defraud innocent consumers across the nation," Texas Attorney General Greg Abbott said in a written statement.

According to the Office of the Attorney General, exaggerated claims relating to the therapeutic benefits of Mannatech's dietary supplements and products were used to unlawfully mislead consumers with cancer, Down's syndrome, cystic fibrosis and other serious illnesses.

The Coppell, Texas-based company announced it is taking action to meet with the state's requirements.

"We are aware of the situation and will be taking appropriate action to address any issues or concerns from the Texas Attorney General's office," said Mannatech president, Terry Persinger, in an official statement.

"We take matters of this nature very seriously and intend to cooperate to reach a resolution."

In January, the Federal Trade Commission (FTC) set the stage for unlawful marketing practices involving dietary supplements by fining four well-known weight-loss pill marketers for $25mn.

The settlements also required the marketers of Xenadrine EFX, One A Day Weight Smart, Cortaslim and TrimSpa change their ad claims.

The Office of the Attorney General in Texas has said Mannatech's marketing practices could have posed a health risk to seriously-ill consumers if they decided to opt out of medical attention, believing the false product claims.

"Texans will not tolerate illegal marketing schemes that prey upon the sick and unsuspecting," said Attorney General Abbott.

"Aided by an army of multi-level sellers and their fictitious claims about its products, Mannatech has aggressively marketed supplements to countless unwitting purchasers."

Among the lawsuit charges are that Mannatech encouraged salespeople to use false statements and use brochures, videotapes and personalized websites exaggerating the supplements' efficacy.

Much of the material in question includes 'before and after' photos and testimonials.

In January, FTC said the marketing for the weight loss supplements it clamped down on relied heavily on testimonials and not on science.

"Testimonials from individuals are not a substitute for science," FTC chair Deborah Platt Majoras.

"And that's what Americans need to understand."

In the State of Texas' original petition against Mannatech, it claimed to have uncovered that the company knowingly undertook deceptive marketing practices and propagating false claims: "Defendants are aware that such marketing techniques are illegal, and try to distance themselves from responsibility for these illegal disease claims for their dietary supplements in numerous ways, including: substituting the word "glyconutrients" for the name of Mannatech's products; setting up alternate websites; claiming that third parties who they have no control over are making the illegal claims in books, videos, an other marketing materials; …"

Mannatech centers development and marketing of its products on glyconutrients - plant saccharides that provide support for the immune system.

Saccharides are necessary for the body's creation of key structures in cell interaction called glycoforms.

The company works through over 500,000 independent sales distributors worldwide and is traded on the NASDAQ stock exchange.