Recently, the Federal Trade Commission ("FTC") has been focusing on enforcement against misleading advertising and practice in the dietary supplements, health and fitness industries.
The FTC filed a complaint to the District Court for the Central District of California, against Lunada Biomedical for advertising that its dietary supplement can lead to a substantial weight loss in a way that is clinically proven, and also for claiming consumer satisfaction and a success rate of 93%.
The basis for the complaint is that Lunada, which markets its product nationwide using radio, TV, websites, emails and other promotion materials, claimed that its products were "clinically proven". However, in the clinical trial that was conducted in 2001 by the scientists who developed Lunada's products, weight loss was not even one of the measures measured by the scientists. Moreover, a subsequent clinical study found that the product did not lead to any significant difference in weight loss. As for the success rate, the FTC argues that Lunada failed to disclose its relationship with the endorsers. All of this has resulted in the FTC filing a complaint against Lunada, as well as personal complaints against four of Lunada's senior officers.
Another similar case is the one concerning Sale Slash. In this case, the company not only falsely promoted its unproven diet pills, but also used violated the CAN-SPAM Act by publishingfalse celebrities' endorsements of its pills, and by posing to be an email contact of each spam recipient. The court responded to the FTC charges by issuing an order that halts Sale Slash's illegal activity, freezing its assets and appointing a temporary receiver over the corporate defendants. In taking such action, the FTC is seeking to reimburse the company's customers who bought the pills, as it succeeded do so in the case of TriVita.
We urge our clients to enforce compliance policies on their partners, in accordance with the various regulatory considerations that apply to the advertising of dietary supplements in various jurisdictions around the world.