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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

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

The FDA and FTC recently issued joint warning letters to seven sellers of products that claimed to treat or prevent “Novel Coronavirus Disease 2019,” known as COVID-19.

According to FDA Commissioner Stephen Hahn, “The FDA considers the sale and promotion of fraudulent COVID-19 products to be a threat to the public health.”  FTC Chairman Joe…

Operators of the LendEDU website entered into a settlement agreement with the Federal Trade Commission (FTC) in response to allegations that LendEDU misled consumers by claiming that its website provided objective, unbiased rankings of financial products, when in fact they offered better ratings to companies that paid for the endorsement.

LendEDU promoted its website as a resource for people to compare and shop for financial products, such as student loans, personal loans, and credit cards, using rankings that LendEDU claimed were based on “objective,” “honest,” “accurate,” and “unbiased” information about the quality of the product being offered, and not based on financial compensation. But, according to the FTC’s complaint, LendEDU solicited payments from financial service companies in exchange for better product ratings, and adjusted the rankings on its website based on the amount of compensation received. The FTC complaint also alleges that LendEDU misrepresented that positive consumer reviews on its website and other third-party websites reflected the actual experiences of impartial customers, when the reviews were actually written by LendEDU employees or individuals with personal or professional relationships with LendEDU.
Continue Reading LendEDU Agrees to Settle FTC Charges Alleging Deceptive Advertising Practices

Class action plaintiffs filed a lawsuit in February against Gojo Industries, Inc., the maker of Purell hand sanitizers, alleging that Gojo’s marketing and advertising claims on its website and social media accounts give consumers the impression that Purell products “are effective at preventing colds, flu, absenteeism and promoting bodily health and increased academic achievement.”

This lawsuit follows a January 17, 2020 warning letter sent by the Food and Drug Administration (FDA) to Gojo regarding the same claims. In the letter, the FDA warned Gojo that claims that Purell products “are effective in preventing disease or infection from pathogens such as Ebola, MRSA, VRE, norovirus, flu, and Candida auris, and in preventing the spread of infection” implies that their products are FDA-approved drugs. Similarly, the FDA states that claims that Purell products “are effective in reducing illness or disease-related student and teacher absenteeism” are unsubstantiated.
Continue Reading Lawsuit Filed Against Makers of Purell For Hand Sanitizer Disease Prevention Claims

On December 20, 2019 the FTC sued FleetCor Technologies, Inc. and its CEO, Ronald Clarke, for alleged misleading advertising practices, claiming FleetCor had collected at least $200 Million dollars in hidden fees from fuel card service customers. According to the Complaint, FleetCor’s ads promised customers that their fuel card service had no setup, transaction, or membership fees. But the FTC alleges that FleetCor charged customers those very fees, merely renamed as “Account Administration Fees,” “Program Fees,” “High Credit Risk Account Fees,” “Convenience Network and Out of Network Fees,” “Minimum Program Administration Fees,” and “Late Fees and Interest and Finance Charges.” …
Continue Reading FTC Sues FleetCor for Hidden Fee and other Deceptive Advertising Practices

In November, the FTC issued a new resource for online social media influencers, titled “Disclosures 101 for Social Media Influencers,” which provides compliance tips for influencers disclosing payment, free products, and other “material connections” in their social media posts.  This new guide is the latest development in an ongoing effort by the FTC to educate influencers on when disclosure obligations apply and how to make effective disclosures.  A few takeaways from the new guide…
Continue Reading FTC Publishes “101” Disclosures Guidance for Social Media Influencers

On October 21, 2019, the Federal Trade Commission (FTC) announced that it had settled two cases regarding alleged fake indicators of social media influence and fake product reviews.

In the first action, the FTC alleged that Devumi, LLC and its CEO had “sold fake indicators of social media influence, including fake followers, subscribers, views, and likes, to users of different social media platforms, including LinkedIn, Twitter, YouTube, Pinterest, Vine, and SoundCloud.”  These fake indicators were designed to make the influencers more attractive to businesses and individuals hiring the influencers or making purchase decisions related to the influencers (e.g., the more followers or engagement associated with the influencer, the higher fees a business might pay to engage them or more value consumers might give their opinion).
Continue Reading FTC Settles Two Cases of Alleged Fake Reviews and Online Influence