Earlier this week, we advised of impending federal action in the health supplement marketing space. (Marketers of Weight-Loss Products Targeted by FTC). Yesterday, the Federal Trade Commission (“FTC”) announced settlements with six separate health supplement providers concerning allegedly deceptive marketing practices. The combined settlements value over $83.7 million, with one settlement requiring the wife of a principal to surrender approximately $300,000. In all instances, the FTC alleged that the supplement providers made claims about products that they sold which were either untrue and/or without substantiation. In addition, many of the subject supplement companies failed to disclose that customer testimonials were paid for by the companies themselves. The settlement agreements reflect the FTC’s increased scrutiny into the advertising practices of online health supplement companies and their marketers.
Health Benefit Claims and Customer Testimonials
By and large, the settling entities promoted certain benefits of using their products without any actual evidence to support those claims. For example:
1) Citing the studies of Dr. Alan Hirsch, Sensa Products, LLC was alleged to have advertised that its product could cause substantial weight loss without associated dieting or exercise. Dr. Hirsch purportedly conducted two studies which were cited in Sensa’s advertisements. He also wrote a book promoting the benefits of Sensa’s products. However, the FTC alleged that Dr. Hirsch’s studies were not supported by verifiable independent clinical studies. Importantly, Sensa also failed to disclose that Dr. Hirsch was a partial owner of the company.
2) Another company, L’Occitane, Inc. allegedly falsely claimed that its creams had “clinically proven slimming effectiveness” and would “visibly refine and reshape” the user’s body.
3) GeneLink, Inc. and its former subsidiary were alleged to have made unsupported claims about their genetically customized products. Specifically, GeneLink allegedly claimed that its supplements, based on an assessment of the user’s DNA, could compensate user’s genetic disadvantages and treat conditions such as diabetes, heart disease and insomnia.
4) HCG Diet Direct sold “diet drops,” which the FTC alleged were nothing more than “a diluted form of human chorionic Gonadotropin – a hormone produced by the human placenta that has been falsely promoted for decades as a weight-loss supplement.”
5) LeanSpa allegedly used fake news websites to promote its colon cleansing product.
In all, the FTC found that each company’s subject advertisements lacked any verifiable scientific support to substantiate their respective claims.
Additionally, many of the settling companies used customer testimonials in their advertisements. In most instances, customers were compensated by the companies for providing their testimonials. However, in each and every instance, the settling company failed to adequately disclose that its customers were compensated in exchange for providing their testimonials.
Although the financial penalties varied, all of the settling companies are now prohibited from making any false or unverifiable claims in connection with selling their products. Moving forward, the settling companies may not make any claims about their products unless the claims are supported “by at least two adequate and well-controlled human clinical studies.” In addition, the settling companies must disclose: 1) that testimonials have been paid for and; 2) any material connection with the endorsers of their program or product, as applicable.
In October, we previously blogged that the FTC was cracking down on the marketing practices of dietary supplement providers. (See, Dietary Supplement Provider Sued for Deceptive Marketing). It is now clear that the FTC will be scrutinizing the advertising practices of health supplement providers more carefully this year. Therefore, it is critical that product providers and marketers remain abreast of ever-evolving regulations in the dietary supplement and marketing space.
If you are a health or dietary supplement provider, a marketer of such products, or if you have been served with legal process relating to your marketing practices, please e-mail us at email@example.com or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.