FTC to Media: Time to Lose Some Pounds

Just in time for the New Year, as thousands of people are making weight loss resolutions and searching for ways to stick to them, the Federal Trade Commission (FTC) released updated guidance for publishers and broadcasters on how to evaluate weight-loss claims when screening ads for publication. The imposition of liability on the media for deceptive claims that are published is not new, and major television networks already pre-clear advertisements to ensure that they not misleading violations of section 5 of the FTC Act. Thus, the guidance does not create new liability for publishers, but rather provides a reminder for publishers to be vigilant when it comes to weight-loss claims.

The FTC’s Gut Check: A Reference Guide for Media on Spotting False Weight-Loss Claims, provides an update to its original "Red Flag Bogus Weight Loss Claims" reference guide from 2003. "Gut Check" identifies seven automatically suspect weight loss claims that should trigger investigation by publishers to ensure truthfulness. Such claims include:

  • Causes weight loss of two pounds or more a week for a month or more without dieting or exercise
  • Causes substantial weight loss no matter what or how much the consumer eats
  • Causes permanent weight loss even after the consumer stops using product
  • Blocks the absorption of fat or calories to enable consumers to lose substantial weight
  • Safely enables consumers to lose more than three pounds per week for more than four weeks
  • Causes substantial weight loss for all users
  • Causes substantial weight loss by wearing a product on the body or rubbing it into the skin

Additionally, "Gut Check" provides guidance on the use of consumer endorsements and disclaimers. The guides remind publishers that consumer endorsements must either be typical of the weight loss results experienced by users, or must clearly and conspicuously disclose what the typical results are. The FTC concludes that as a rule, endorsements from people who claim to have lost an average of two pounds or more per week for a month or more (or endorsements from people who say they lost more than 15 pounds overall) should be accompanied by a disclosure of how much weight consumers typically can expect to lose. Regarding clear and conspicuous placement, the FTC says that disclosures should be:

  • Close to the claims they relate to – for example, consumer testimonials – and not buried in footnotes or blocks of text people aren’t likely to read
  • In a font that’s easy to read and at least as large as other fonts the advertiser uses to convey the claim
  • In a shade that stands out against the background
  • For video ads, on the screen long enough to be noticed, read, and understood
  • For video or radio ads, read at a cadence that’s easy for consumers to follow, and
  • In words consumers will understand

"Gut Check" was released in conjunction with settlements in four weight-loss cases, indicating this is an area of great concern to the FTC that will likely see continued stringent enforcement.

POM Wonderful's Claims ... Not So Wonderful

On January 16, 2013, the Federal Trade Commission in a 5-0 vote upheld a May 2012 Administrative Law Judge’s (“ALJ”) decision that POM Wonderful LLC (“POM”) and its owners had falsely advertised its POM Wonderful 100% Pomegranate Juice, and POMx liquid and pill supplements, by claiming that its products treat, prevent or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, and that they were proven to work.

In upholding the previous decision, the Commission’s Opinion actually went further than the ALJ decision by finding that 34 out of 43 ads contained false or deceptive claims, whereas the ALJ decision found that only 19 contained false or deceptive claims.

In addition, the Opinion found that POM needed a more robust level of substantiation for its claims than what was determined by the ALJ decision. The Commission’s Final Order requires that any disease-related establishment or efficacy claims made about the challenged POM products, or in connection with the POM’s sale of any food, drug, or dietary supplement, must be supported by at least two well-designed, well-controlled, double-blind, randomized, controlled clinical trials.

Although POM allegedly has more than $35 million-worth of scientific testing on its products, including more than 10 clinical studies, many of the studies were found by experts to have flaws.

In its appeal to the Commission, POM argued that finding liability would violate its First Amendment right to free speech and its Fifth Amendment right to due process. The Commission rejected these arguments.

Although the outcome of the Opinion is a blow to POM, the Opinion was not a complete victory for the FTC, as it denied the FTC’s request that POM be required to obtain FDA approval for future claims.

POM Wonderful may appeal the decision to a Federal Appeals Court within 60 days of receiving the Final Order.

Why this matters: This case will likely have a significant impact on advertisers making disease-related claims moving forward as it sets forth a very specific level and number of required clinical studies to meet the “competent and reliable scientific evidence” standard. If POM appeals, this will be an interesting test case as to whether the FTC is indeed overstepping its bounds.

Sorry, Your Baby Can't Read

Just before Labor Day, the Federal Trade Commission (FTC) filed false advertising charges against the marketers of “Your Baby Can Read!” The program, widely promoted via infomercials and the Internet, purports to use videos, flash cards and pop-up books to teach babies as young as 3 months old how to read. The complaint charges Your Baby, LLC, its former CEO, and the program’s creator, Dr. Robert Titzer, with false and deceptive advertising and deceptive expert endorsements. According to the complaint, the defendants failed to provide competent and reliable scientific evidence that babies can learn to read using the program, or that children at age 3 or 4 can learn to read books such as Charlotte’s Web or Harry Potter.

The program’s former President and CEO, Hugh Penton, Jr., has already settled with the FTC. The settlement imposes a $185 million judgment (equal to the company’s gross sales since January 2008), but suspends the judgment upon the payment of $500,000 because of the company’s financial condition.

This case is one of many recent FTC cases attacking the issue of “competent and reliable scientific evidence.” Advertisers should monitor the FTC’s enforcement actions to stay abreast of changes.

Cold Supplement Seller Agrees to $30 Million Settlement

The makers of the Airborne dietary supplement have agreed to pay as much as $30 million to consumers to settle Federal Trade Commission charges that its makers made false and unsubstantiated cold prevention claims.

“There is no credible evidence that Airborne products, taken as directed, will reduce the severity or duration of colds, or provide any tangible benefit for people who are exposed to germs in crowded places,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection in a release.

In its complaint, the FTC cites Airborne advertisements in which speakers claimed the supplement cured their cold in an hour, was a “miracle cold buster,” and was created by a teacher who “was sick of catching colds in class.”

The supplement, which contains 17 herbs and nutrients, was widely sold by major retailers such as Wal-Mart, CVS, Walgreens and Costco; and was marketed on daytime television programming, and through magazines and celebrity endorsements.

Airborne’s label urges users to take the supplement at the first sign of a cold and before entering crowded situations. The label depicts a picture of someone sneezing into their handkerchief.

The FTC charged that the makers of Airborne, former teacher Victoria Knight-McDowell and her husband, made express or implied unsubstantiated claims that the product could reduce the risk of or prevent colds, protect against or help fight germs, reduce the severity or duration of a cold, and protect against colds, sickness and infection in crowded places.

The FTC’s complaint and agreed-upon settlement follows a class-action lawsuit, pending in the U.S. District Court for the Central District of California. The defendants already agreed in that case to pay $23.5 million for consumer refunds. To settle the follow-on FTC action, the defendants agreed to pay an additional $6.5 million in funds for consumer redress if needed to settle consumer claims.

Nonetheless, Airborne is hardly in retreat.

In a feisty release, the company vigorously denied any wrongdoing or illegal conduct in both the class and FTC actions. The settlement involves older advertising, the company noted, but it stood behind its product’s efficacy.

“Consumers can feel confident that the advertising and labeling going into the marketplace accurately reflects what Airborne products do,” said Airborne CEO Elise Donahue. “Our products help support the immune system. In fact the key ingredients in Airborne have been studied in scientific research and reported in medical journals. Airborne is the same product that millions of consumers swear by. Airborne, meanwhile, continues to be the #1-selling immune support dietary supplement, and we’re very proud of this fact.”

Why This Matters:  There is no known cure for the common cold, and any claims to the contrary are likely to catch the attention of regulators—or plaintiffs’ attorneys.