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
Two brothers in Tennessee made national news in early March after cleaning out local stores of products in high demand because of COVID-19 in order to sell them for exorbitant prices on online marketplaces. In the end, however, both Amazon and eBay implemented policies resulting in some or all listings involving price gouging being pulled from their platforms, so the pair was left with a garage full of nearly 18,000 bottles of sanitizer and an investigation into their activities by the Tennessee Attorney General’s. Continue Reading Private Companies and Government Regulators Crack Down on Coronavirus-related Price Gouging
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
In light of the COVID-19 pandemic, the U.S. Food and Drug Administration (FDA) has announced several steps to maintain the safe supply of food while adjusting the regulatory burden on food manufacturers. The FDA also announced that there is no evidence of transmission of the virus via food or packaging and stated that food manufacturers would not be required to hold or recall product if they have an infected employee.
In this update, we provide a summary of recent FDA actions, discuss the need to reassess food safety plans and preventive controls to address the impact of COVID-19, and offer guidance on how food manufacturers can ensure they remain compliant and protect workers and consumers during the pandemic. Read the full article.
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 Simons noted, “There already is a high level of anxiety over the potential spread of coronavirus.”
The products named in the warning letters included teas, essential oils, tinctures and colloidal silver. Warning letters were sent to the following companies:
- Vital Silver,
- Quinessence Aromatherapy Ltd.,
- Xephyr, LLC doing business as N-Ergetics,
- GuruNanda, LLC,
- Vivify Holistic Clinic,
- Herbal Amy LLC, and
- The Jim Bakker Show.
The companies receiving the warning letters were provided 48 hours to respond with specific actions taken to address the agencies’ concerns.
According to the FDA’s statement, there are currently no vaccines or drugs approved to treat or prevent COVID-19. The FDA and FTC noted that they will “continue to monitor social media, online marketplaces and incoming complaints to help ensure that the companies do not continue to sell fraudulent products under a different company name or on another website.”
In a February blog post, the FTC warned that scammers were following the COVID-19 headlines and cautioned that “scammers are taking advantage of fears surrounding the Coronavirus.”
FDA has set up a cross-agency task force to monitor for fraudulent products purporting to treat or prevent COVID-19. The FDA has announced that more than three dozen of such products have been removed from major retailers and online marketplaces.
- Marketers should ensure that they have competent and reliable scientific evidence to support any COVID-19-related advertising and labeling claims about their products before such claims are made. Practically speaking, marshalling such evidence may be difficult at this time as much remains unknown about the virus responsible for COVID-19 and effective treatments for the disease.
- Advertising that a product can prevent, mitigate, cure, or treat COVID-19 may result in the product being qualified as an unapproved new drug sold in violation of the Federal Food, Drug, & Cosmetic Act.
Leaders of the U.S. House of Representatives have requested that the FTC take action against price gouging related to the coronavirus (COVID-19) and have indicated that they would assist with appropriate legislation.
Almost every state has issued emergency declarations which, in many states, trigger prohibitions against price gouging.
As the coronavirus pandemic evolves, retailers should be aware of these laws and monitor FTC and legislative action relating to price gouging. Read the full article.