Power Balance Admits Its Success Is in the Mind, Not Science
The ads declare that the silicone wristbands, which come in five sizes and 16 colors, optimize the body's natural energies and improve balance, strength and flexibility. Citing ancient Eastern philosophies, the company says the technology was "founded" by athletes and is a favorite among the elite sports set.The bands, which sell for $29.95 on the company's website, have been endorsed by, and spotted on, sports luminaries such as Shaquille O'Neal, David Beckham and Alex Rodriguez, as well as Hollywood heavyweights Robert De Niro, Gerard Butler and Sean "Diddy" Combs.
But late last month, the Australian Competition and Consumer Commission raised concerns that the claims were likely to mislead consumers into believing that Power Balance products, which also include silicone, zinc and sterling silver pendants that sell for up to $80, have biological benefits, when they don't.
"When a product is heavily promoted, sold at major sporting stores, and worn by celebrities, consumers tend to give a certain legitimacy to the product and the representations being made," ACCC chairman Graeme Samuel said in a statement.
In response, Power Balance acknowledged there was no credible scientific basis and no grounds for its claims and confirmed that it relied solely on users' testimonials.
"While our previous claims in marketing ads are not up to Australia's ACCC standards, we stand behind our products. The beliefs of thousands of consumers and athletes who wear our products are not wrong," the company told Consumer Ally in an e-mail.
It has agreed to offer refunds to consumers who felt they have been misled. Then in a heartbeat, it was back on its feet.
"Frankly, we know there will always be critics of new technologies, but our products are used by those with open minds who experience real results," Keith Kato, president of Power Balance, wrote on the company's website.
Astonishingly, just a week after the company's admission, the business news channel CNBC named the wristbands "Sports Product of 2010."
On Jan. 3, the Laguna Niguel, Calif.-based marketer announced on its Facebook fan page that 2010 had also marked its expansion to more than 40 countries. It also wrote: "Power Balance works we guarantee it."
This week, according to a joint news release from Power Balance and the co-owners of the Sacramento Kings basketball team, the wristband maker reached a five-year tentative agreement to acquire the naming rights for the team's home venue, currently known as the Arco Arena.
The company's apparent savvy in managing its image, and ability to snatch victory from the jaws of defeat, far surpasses the meek damage control that a firm which peddled a similar product, the iRenew balance bracelet, attempted last year--after the Better Business Bureau gave it a failing grade.