The Federal Trade Commission (“FTC”) recently entered into a settlement with a company and its owner to prevent them from making allegedly deceptive marketing representations to consumers that their dietary supplements effectively treat childhood speech disorders.
Deceptive Marketing Action: The Magic Pill?
The FTC sued NourishLife, LLC and its owner, Mark Nottoli, for selling “Speak” and “Speak Smooth” dietary supplements online and through a network of distributors for over $70 per bottle. The supplements were advertised on the Internet, at conferences on autism spectrum disorders and in product brochures distributed through third parties. This is yet another action in which the FTC has targeted advertisers that make health-related claims.
In addition to Google ads and assorted sponsored links on websites, the defendants allegedly owned and operated a website that appeared to be an independent resource for information relating to the treatment of apraxia. That website contained advertisements touting the health benefits of defendants’ products – without disclosing defendants’ ownership of the website.
According to the FTC, the defendants falsely claimed that their products were scientifically proven to treat and improve children’s speech. A number of the defendants’ websites contained parent testimonials – including those that stated that their children could not speak until they started taking the defendants’ products – but allegedly failed to disclose that the parent endorsers received free supplements from the defendants in exchange for providing their testimonials.
The Settlement: Truth in Marketing Dietary Supplements
Pursuant to the terms of the settlement, the defendants must pay $200,000.00 of a $3.68 million judgment (the balance is suspended based on defendants’ purported inability to pay). Among other restrictions, the defendants are prohibited from making false or unsubstantiated claims about the effectiveness of their products and from misrepresenting the independence of any website that advertises their products.
Protecting Yourself Isn’t Magic
The defendants are far from the only ones that have settled with the FTC for practices involving deceptive marketing. Recent FTC actions and settlements underscore the fact that marketers that tout the health benefits of their products must ensure that any and all advertising claims are supported by credible and reliable clinical studies.