Remember this cheesy guy?
If you’re any sort of media consumer, you’ll have had a hard time missing the recent barrage of comical 1950s-style advertising for a product called “Enzyte”, which was supposed to offer “Natural Male Enhancement”. The ads were obviously for yet another worthless scam product, which you could tell by the fact that they never even claimed to have an active ingredient or mechanism of action, just like the worst half of the ever-changing array of “as seen on TV” diet pills. Anybody with a brain understood that you’d get a worthless sugar pill if you were dumb enough to place an order from these charlatans, it was inherent in their limited advertising claims.
Now, it turns out via an article in the Cincinnati Enquirer, the company and its senior management are facing federal fraud charges, and the first worm to turn is testifying, not only about the completely bogus nature of the product, but about the credit card shenanigans that turned this particular scam into a major money spinner:
James Teegarden Jr., the former vice president of operations at Berkeley Premium Nutraceuticals, explained Tuesday in U.S. District Court how he and others at the company made up much of the content that appeared in Enzyte ads.
He said employees of the Forest Park company created fictitious doctors to endorse the pills, fabricated a customer satisfaction survey and made up numbers to back up claims about Enzyte’s effectiveness.
So all this is a fiction?” Judge S. Arthur Spiegel asked about some of the claims.
That’s correct, your honor,” Teegarden said.
…
One spreadsheet purportedly showed how the pills increased penis size by an average of 24 percent, when in fact no customers had reported such results. Instead, Teegarden said, he made up the numbers.
Another report he created showed customer satisfaction ratings of 96 percent for Enzyte customers. But prosecutors showed jurors an e-mail from Warshak that they said asked Teegarden to fix the numbers.
“Here’s the spreadsheet you wanted,” Teegarden responded via e-mail. “Let me know if you want me to doctor it up some more.”
…
When customers ordered a product, the company’s goal was to keep charging their credit cards for as long as possible, Teegarden said.
He said first-time customers were automatically enrolled in a “continuity program” that sent Enzyte to their homes every month and charged their credit cards without authorization.
“Without continuity, the company wouldn’t exist,” Teegarden said. “It was the sole profit of the business.”
If customers complained, he said, employees were instructed to “make it as difficult as possible” for them to get their money back. In some cases, Teegarden said, Warshak required customers to produce a notarized statement from a doctor certifying Enzyte did not work.
“He said it was extremely unlikely someone would get anything notarized saying they had a small penis,” Teegarden said.
I’ve always assumed that the people who fall for these scams aren’t really as dumb as you would think they need to be; rather, I figure they’re thinking “it’s probably a scam, but what the hey, it only costs me forty bucks to find out!” The crucial mistake in that “reasoning” lies in forgetting that someone who will lie to you will also quite cheerfully steal from you, which they will find quite simple to do, once they have your credit card information:
Teegarden, however, said Warshak also tried to manipulate data that banks use to determine whether companies should be allowed to accept payment via credit cards.
He said Warshak artificially inflated total sales to offset the high number of customers who sought refunds from credit card companies, a process known as “charge backs.”
If more than 1 percent of its customers sought charge backs, Berkeley could have lost its ability to do business via credit cards.
To avoid that, Teegarden said, Berkeley began making small, unauthorized charges to thousands of customer credit cards. The charges were later refunded by the company, but they temporarily boosted total sales and reduced the percentage of charge backs.
