Last month, the Federal Trade Commission (“FTC”) announced its settlement with a Florida-based marketer and seller of aloe vera-based supplements over allegations that it deceived consumers in claiming that its products were effective treatments for a range of conditions affecting seniors, such as chronic pain, ulcerative colitis, diabetes, and acid reflux.
According to the FTC’s complaint, since 2002, the company advertised, marketed and sold a variety of health-related products including TrueAloe edible capsules and AloeCran drink mix. The advertisements for the products deceptively claimed they reduced cholesterol levels, relieved chronic pain, and treated multiple health conditions such as diabetes and acid reflux. The company’s advertisements described various clinical studies that seemingly confirmed the power of aloe vera, and thus the company’s products, to provide such clinical benefits. However, the FTC alleged that the company never conducted any studies, let alone any properly designed, human clinical trials of its products to support its claims.
Furthermore, many of the company’s marketing materials included testimonials by seemingly independent users who claimed they experienced remarkable relief from pain and other ailments from using the company’s products. However, the company failed to disclose that the reviewers received free products or free lifetime memberships as compensation for providing the review – in violation of the FTC’s Endorsement and Testimonial Guides.
The FTC’s order prohibits the company from making health-related claims requiring human clinical testing for substantiation unless those statements are supported by randomized, double-blind, and placebo-controlled studies conducted by qualified and experienced researchers. The order further prohibits the company from making other misleading or unsubstantiated claims about the health benefits, performance, efficacy, or side effects of its products, unless supported by competent and reliable scientific evidence.
The order also prohibits the company from misrepresenting that an endorser is an independent consumer of its products and requires the company to clearly and conspicuously disclose any material connection with a consumer, reviewer, or endorser in close proximity to the representation. Lastly, the order imposed an $18.7 million judgment, which will be partially suspended upon the company paying $537,500. The FTC may use such funds to provide refunds to defrauded consumers.
Takeaway: The FTC continues to be vigilant in policing health-related claims, particularly those targeting seniors. Advertisers should ensure they are in compliance with the FTC Endorsement and Testimonial Guides and clearly and conspicuously disclose material connections with reviewers and endorsers.