The Federal Trade Commission has been busy. On the heels of its $40 million settlement with Skechers, one of the largest of its kind, the Commission yesterday announced that it has settled with Oreck Corporation regarding allegedly unsubstantiated claims that the company made regarding its Halo vacuum cleaner and ProShield Plus portable air purifier. Oreck has agreed to pay $750,000, which will be disbursed to affected consumers via $25 refund checks, and has further agreed to refrain from making certain identified advertising claims without adequate substantiation. As is customary in these types of proceedings, Oreck has neither admitted nor denied the FTC’s allegations but has agreed to abide by the FTC’s consent order (in this case, a twenty-year order) as a means of resolving the dispute.
Although the monetary component of the Oreck settlement is significantly smaller than that of the Skechers settlement, the underlying issues are similar. In each case, the FTC alleged that the marketers made claims about the health effects or efficacy of their products that were not adequately substantiated and were, therefore, misleading to consumers. The FTC pursued Oreck for allegedly unsubstantiated claims that its Halo vacuum cleaner and ProShield Plus air cleaner would: (a) reduce the risk of the flu, (b) reduce the risk of other ailments caused by bacteria, viruses, molds or allergens, and (c) eliminate all or some specified percentage of germs, bacteria, dust mites, molds, viruses or allergens.
One of the ads featured in the FTC’s complaint depicts a woman standing in a wallpapered room (a kitchen, judging by the floral design) wearing a gas mask. The ad asks, “WANT A NEW WAY TO HELP BATTLE THE FLU?” and reports that testing showed “up to a 99% reduction in airborne particles.”
Click here to see the advert.
Another ad depicts the Oreck Halo vacuum cleaner emitting a stylized, blue UV-C light with the words “KILLS FLU GERMS.” The ad claims that the Halo is “the only vacuum in the world that uses powerful UV-C light to kill many of the germs that could be living on your floors, such as the flu” and states that the Halo “traps 99.9% of particulates down to 0.3 microns.”
Click here to see the advert.
According to the FTC, these and similar claims were not adequately substantiated at the time they were made. It is not possible to tell from the documents disclosed publicly what level of substantiation Oreck had at the time it disseminated the ads. (Given the specificity of the claims, it is unlikely that Oreck had no studies substantiating its claims). In typical fashion, the FTC’s complaint alleges merely that “respondent did not possess and rely upon a reasonable basis that substantiated the representations,” and the consent judgment prohibits similar claims unless at the time the claim is made, “respondent possesses and relies upon competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields” to substantiate that the claim is true. Accordingly, as with the Skechers settlement, there is little specific guidance in the settlement documents for marketers who wish to play by the FTC’s rules when it comes to substantiating health and efficacy claims.
Without clear interpretive guidance from the FTC, and in light of the subjective inquiry required to determine whether a particular claim is reasonably supported by scientific evidence, the prospect of making health or efficacy claims can be daunting. However, as previously discussed, marketers can minimize their risk by keeping in mind the following key points, which have emerged from recent FTC actions.
- First, the FTC’s efforts on claim substantiation are not just focused on nutritional supplements, weight loss products, and other “ingestibles.” The FTC is increasingly targeting consumer marketers making efficacy and health related claims in other contexts.
- Second, efficacy claims that reference specific percentages (e.g., “traps 99.9% of particulates”) seem particularly attractive to the FTC. Both the Oreck and the Skechers cases featured very specific quantitative claims about the products at issue.
- Finally, as demonstrated in the Skechers settlement, the FTC continues to push for two clinical studies for certain types of claims even as it requires only a single clinical study for claims that are quite similar (i.e., weight loss and muscle strengthening). While this incongruous approach arguably calls into question the rationale for two studies, marketers can minimize their risk by relying on two clinical studies whenever possible.