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FTC seeks injunction against Garden Grove company over shipping problems, COVID-19 claims

The Federal Trade Commission is seeking an injunction against the owners of a Garden Grove online business that allegedly failed to promptly deliver hand sanitizer and personal protection equipment to consumers and made false claims about a product’s ability to treat and prevent COVID-19.

A lawsuit filed earlier this month in U.S. District Court contends Rakesh Tammabattula and his wife, Jacqueline Thao Nguyen, who operate QYK Brands LLC, have engaged in deceptive and misleading marketing practices.

“Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result of defendants’ violations,” the complaint says. “In addition, defendants have been unjustly enriched as a result of their unlawful acts or practices.”

Delays prompt complaints

The FTC alleges Glowyy, an online store operated by QYK, began advertising sanitizer, masks, face shields and other products online in March, saying they were in stock and would ship the same day they were ordered. Throughout March, April, and May, Glowyy continued to make promises about shipping dates and times, but consumer complaints show the company failed to fulfill those promises, according to the FTC.

The lawsuit also alleges Glowyy created shipping labels shortly after orders were received, but failed to give the products to the U.S. Postal Service for weeks or months.

In addition, the company failed to offer refunds to consumers or allow them to consent to the delay as required by federal mail order regulations, according to the complaint.

‘Extremely responsive to customers’

Tammabattula takes issue with the allegations in the lawsuit.

“Contrary to the FTC complaint, we have been extremely responsive to customers and have been keeping customers updated from time to time about the delays we were facing back then in March/April when the orders we received were far more than the inventory we had in stock for same-day shipping,” he said Wednesday. “There were messages on the website that clearly mentioned the delays we were facing, most of which was because of the broken supply chain in the early months of COVID-19 outbreak.

“We were doing everything possible on our side to continue making the product through the tough challenges we were facing back then with issues ranging from unavailability of raw materials, logistics, and lockdowns and many other things as a result of the pandemic which were completely out of our control.”

Throughout the process, Tammabattula said, customers whose orders were delayed were kept informed and have been given the option to cancel their purchases and get a full refund,

“A majority of our customers opted to wait and we fulfilled their orders as soon as we were restocked, and some of them opted to cancel and get a refund, which we promptly refunded,” he added. “Altogether we refunded and/or gave discounts in the amount over $350,000 to all the customers who requested them.”

Unfounded COVID-19 claims

The lawsuit also alleges Nguyen, who goes by the moniker “Dr. J.,” has made unfounded claims about the ability of a protein powder called Basic Immune IGG — sold for $89 — to treat and prevent COVID-19 and falsely stated it has been approved by the U.S. Food and Drug Administration for that purpose.

The strongest claims appear in Vietnamese-language videos, according to the FTC.

In April, Nguyen appeared on a newscast on Saigon Entertainment Television, a Garden Grove-based station broadcasting to Vietnamese-speaking viewers throughout the United States, and stated that Basic Immune IGG could “prevent” COVID-19 by boosting the immune system, the lawsuit says.

“Let’s say if one coronavirus happens to infiltrate my body, I already have about five hundred thousand antibodies, thanks to this powder,” she said during the newscast, according to the FTC. “They would cling to and bite that coronavirus, push it out and kill it.”

The FTC also alleges Nguyen claimed during the broadcast that Basic Immune IGG is guaranteed safe “because there is FDA’s verification and approval.”

“We have conducted clinical studies, involving the extraction and cultivation of antibodies taken from cow blood, which is then made into this antibody powder,” she said, according to the complaint.

Basic Immune IGG is produced by Entera Health and labeled on QYK’s Dr J brand, said Tammabattula, adding that during the broadcast on Saigon Entertainment Television, Nguyen merely read from a marketing script provided by the manufacturer.

“But when FTC alleged false claims, we immediately took down the product from our website and social media in good faith efforts to show we were not intentionally misleading,” he said.

No studies on Basic Immune IGG

Basic Immune IGG is not an FDA-approved treatment or preventative for COVID-19, the FTC said.

“There are no published adequate and well controlled clinical studies of Basic Immune IGG, Immunolin, or a serum-derived bovine immunoglobulin for use to effectively treat, prevent, or reduce the risk of contracting COVID-19,” the lawsuit states. “In fact, there are no published studies of any kind for Basic Immune IGG or Immunolin.”

Attorneys for QYK, which employs about 200 workers in Anaheim and Garden Grove, are working to resolve the FTC allegations, Tammabattula said.

“We are not a fly-by-night company that tried to make a quick buck from the pandemic and disappear,” he said. “We are a reputed company that has been in business for many years and for us offering quality products and customer service is the highest priority. We have expanded our operations into manufacturing various other personal protection equipment and have created at least 100 new jobs last 2 months.

“We have gone above and beyond with our customer service to keep customers in the loop with everything happening, but there is no denying some customers were not pleased with the delays and filed complaints with FTC.”

Source: Orange County Register

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