On July 9, 2020, the U.S. Supreme Court granted certiorari in two cases to review whether the FTC has authority to seek restitution under Section 13(b) of the FTC Act. Section 13(b) provides that the FTC “may seek, and after proper proof, the court may issue, a permanent injunction.” For decades, courts have interpreted this language to authorize the full panoply of equitable remedies, including restitution and disgorgement of ill-gotten gains.
Continue Reading Supreme Court to Review FTC Authority to Obtain Restitution

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 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

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

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

On March 26th Federal Trade Commission (FTC) Chairman, Joe Simons, issued a statement regarding the FTC’s continuing efforts to protect consumers during the coronavirus pandemic. The statement came the day before nearly three dozen bipartisan senators signed a letter asking the FTC to clarify what efforts were being taken to prevent COVID-19-related fraud targeting consumers, particularly the elderly.
Continue Reading FTC Statement On Coronavirus Enforcement

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