Last week, Health Research Laboratories, LLC (“HRL”) and its owner/operator agreed to pay $800,000 to settle a Federal Trade Commission (“Commission” or “FTC”) lawsuit for engaging in allegedly deceptive supplement marketing practices.
How can supplement marketers stay legally compliant?
Supplement Marketing Practices and FTC Lawsuit
According to Commission court records, HRL advertises and sells a variety of dietary supplements primarily via direct mail marketing, such as BioTherapex and NeuroPlus. The supplement marketing firm’s principal place of business is purportedly located in South Portland, Maine.
On November 30, 2017, the FTC and the State of Maine sued HRL and its sole owner/officer in the U.S. District Court for the District of Maine (Case No. 17-cv-467) for alleged violations of: the FTC Act; the Telemarketing Sales Rule (TSR); the Electronic Fund Transfer Act (EFTA); the Federal Reserve’s Regulation E; and Maine consumer protection laws.
Among other things, the regulators’ lawsuit claims that the defendants made false and/or unsubstantiated representations in their supplement marketing campaign, including purported claims that:
- its BioTherapex supplement:
- treats or cures rheumatism, arthritis and osteoarthritis; relieves joint pain, back pain and muscle pain; and causes weight loss without dieting or exercising; and
- was clinically proven to treat and cure hypertension, chronic fatigue syndrome, joint and muscle pain, diabetes, depression, obesity and IBS, with references to an inadequately related clinical study.
- its NeuroPlus supplement:
- prevents Alzheimer’s disease and dementia; reverses memory loss; and improves memory, concentration and cognitive performance; and
- that such claims are scientifically proven.
- individuals depicted in its supplement marketing materials are actual medical professionals or have successfully used HRL’s products.
FTC and Maine AG Settle Claims Against HRL, Owner
Also on November 30, 2017, the Commission, the State of Maine and the defendants reached an agreement settling the federal and state claims. Under the terms of the agreement, HRL and its owner are permanently barred from making a number of unsubstantiated supplement marketing claims including, but not limited to, those outlined above.
The defendants have further agreed to pay the Commission $800,000, to be divided with the State of Maine, to redress consumer injuries. In the event that the defendants fail to make timely payment, the amount due will balloon to $3.7 million.
Supplement Marketers: Avoid Liability in Connection with Advertising Campaigns
Broadly speaking, the FTC and state attorneys general require advertisers to refrain from making false or unsubstantiated claims-related representations. The above-referenced case illustrates the importance of complying with applicable state and federal laws, rules and regulations when marketing dietary supplements. To avoid regulatory enforcement and other legal risk, businesses operating in the dietary supplement space should always consult with an experienced marketing attorney before commencing any new supplement marketing campaign.