Last week, the FTC sent another 50 warning letters related to COVID-19 advertising claims, adding to the growing list of FTC warnings and actions intended to address false and deceptive marketing during the pandemic. The latest round of letters targets companies advertising their products and services as effective in preventing or treating COVID-19 without adequate scientific support, including acupuncture, intravenous (IV) therapies, ozone therapy, stem cell treatments, sound frequencies, air-purifiers, and immune-defense supplements. Continue Reading FTC’s COVID-19 Response: Latest Developments
A global marketer who charged consumers after they signed up for “free trials” has settled with the FTC. The FTC alleged that the defendants made $74 million by enrolling customers for paid subscriptions of cosmetics and dietary supplements without their consent. The FTC characterized its complaint as part of an effort to hold companies accountable when they supposedly offer “free trials” but hide the real terms and conditions.
The FTC filed a complaint in July 2019, seeking a permanent injunction and other equitable relief against AH Media Group, LLC, and the company’s owners, Henry Block and Alan Schill. The FTC later filed an amended complaint in October 2019, adding Zanelo, LLC (“Zanelo”) as a defendant. The complaint alleged that Zanelo was also active in the deceptive scheme. Continue Reading FTC Stops Online Subscription Service Offering “Free” Trials with Hidden Terms
The ESRB, and it’s European equivalent PEGI, have issued new labeling requirements for video games containing loot boxes or other types of in-game purchases with randomized elements. The new labeling designation of “In-Game Purchases (Includes Random Items)” includes, but is broader than, loot boxes. Failure to adhere to this requirement may result in fines. Read the full article here.
The Federal Trade Commission (FTC) recently announced a settlement with online fashion retailer, Fashion Nova, requiring it to pay $9.3 million in refunds to consumers for violations of the FTC’s Mail, Internet, or Telephone Order Merchandise Rule (“Mail Order Rule”).
In its complaint, the FTC alleged that Fashion Nova (1) made false representations to consumers about the speed of its shipping and (2) failed to refund consumers for items that were never shipped. For example, according to the complaint, Fashion Nova regularly advertised “Fast Shipping, “2-Day Shipping,” “Fast International 6-10 Shipping,” and “Expect Your Items Quick!,” but regularly did not meet these promises or notify consumers of shipping delays. Also, instead of issuing refunds to consumers for orders that were never shipped, Fashion Nova issued gift cards, which do not qualify as appropriate refunds under the Mail Order Rule. Continue Reading Fashion Nova Settles with FTC for $9.3 Million for Alleged Violations of the Mail Order Rule
California courts remain a top forum for food litigation matters. So many matters are heard in the Northern District of California that it has gained a reputation as the “Food Court.” Now, the California Supreme Court has held that two of the state’s most widely used consumer protection statutes must be tried by a judge rather than a jury.
California’s False Advertising Law (“FAL”), codified at Cal. Bus. & Prof. Code § 17500 et seq., and the Unfair Competition Law (“UCL”), codified at Cal. Bus. & Prof. Code § 17200, et seq., represent two of the most common vehicles for plaintiffs to bring suits alleging false product claims or purported misrepresentations on food labels. Continue Reading Notable Ruling: No Jury for False Advertising and UCL Suits, California Supreme Court Rules
On April 28, 2020, the FTC announced a preliminary order in a civil enforcement action against a supplement manufacturer that allegedly made false and unsubstantiated claims regarding COVID-19 and cancer. Specifically, the FTC alleged that Whole Leaf Organics had marketed its “Thrive” product as an “anti viral wellness booster” that treated, prevented, or reduced the risk of COVID-19. The FTC also alleged that Whole Leaf Organics marketed three products containing cannabidiol (CBD) as effective cancer treatments. Continue Reading More FTC Civil Enforcement for COVID-19 and CBD Cancer Treatment Claims
On April 2, 2020 the National Advertising Division (NAD) launched its Fast-Track SWIFT (Single Well-defined Issue Fast Track) resolution process, promising to resolve single-issue cases in 20 business days. An overview follows.
What is NAD? NAD is an organization within the Better Business Bureau (part of the BBB National Programs) which evaluates the truth and accuracy of national advertising. Matters heard by NAD may be initiated by a competitor or by NAD itself. After briefing and oral argument, NAD issues reasoned opinions with recommendations about whether the advertiser should modify or discontinue the challenged advertising. While compliance is voluntary, brands that do not comply are referred to the Federal Trade Commission (FTC) for a second look. NAD reports a compliance rate of 95%, and the FTC reports that it examines every case referred to it by NAD. Continue Reading National Advertising Division Launches Fast-Track Swift Process
Consumers’ response to COVID-19 has led to increased demand for personal protective equipment and other much-needed supplies to aid consumers and healthcare professionals in the fight against the disease. Alcohol-based hand sanitizer is one such product, with the U.S. Centers for Disease Control and Prevention recommending hand sanitizers when soap and water are not available. The FDA has issued recent guidance intended to provide “flexibility” for manufacturers and increase the supply of alcohol-based hand sanitizer in the marketplace. Continue Reading Industry Insights: Consumer Products Companies Reconfiguring Production Lines to Meet New COVID-19 Needs
The FTC has announced a settlement with furniture and houseware seller Williams-Sonoma, requiring it to cease making unsubstantiated “Made in USA” claims about its products and pay $1 million to the FTC.
Williams-Sonoma previously received a warning letter from the FTC in 2018 regarding its “crafted in America from local and imported materials” mattress pad claims because the pads were purportedly crafted in China. Williams-Sonoma promptly corrected its advertising and agreed to review their country-of-origin verification process. In response, the FTC closed the matter without further action. Continue Reading $1 Million Settlement Announced in FTC’s “Made in USA” Enforcement Against Williams-Sonoma
The FTC recently sent another round of warning letters to ten sellers related to advertising claims that their products treat or prevent COVID-19. Consistent with prior warning letters jointly issued by the FDA and FTC, the FTC’s letters allege that the sellers are falsely claiming that the products are proven to prevent or treat coronavirus when, in fact, there is no competent and reliable scientific evidence that is currently known to exist for products that prevent or treat COVID-19. Continue Reading FTC Sends More Warning Letters Regarding Unsupported Coronavirus Prevention and Treatment Claims