Manufacturer accused of making unsubstantiated performance claims regarding hearing aids
In early May 2018, the Federal Trade Commission (FTC) launched a complaint in the Southern District of Florida against Global Concepts Limited (GCL), its related corporate persona, and Laurie Braden, its principal officer. The suit claims that, from 2012 to 2016, GCL poured $3 million into an ad campaign, including websites and short video advertisements, some of which appeared on cable and local television networks, regarding a hearing aid called the MSA 30X. Consumers could purchase the aid directly from the defendants or at third-party retailers such as CVS, Walgreens or Walmart.
According to defendants, the MSA 30X, is a “small, rechargeable electronic wearable sound amplifier.” For about $30, consumers would get the MSA 30X and related accoutrement: a charging base, cleaning brush and five silicon ear tips. Consumers also had the option of adding on to the basic arrangement and could take advantage of “buy one get one” offers for an increased price.
According to the commission, the ads prominently featured older people touting the benefits of the MSA 30X: 30 times better hearing and perfectly clear hearing in a number of contexts, including crowded restaurants. GCL touted “independent studies” that backed up their claims.
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“In fact,” the FTC alleges, “independent studies do not prove that MSA 30X helps users hear up to 30 times better.” The FTC claimed that GCL violated Section 5 of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices, by making false or unsubstantiated efficacy claims and false establishment claims. According to the complaint, there are fertile grounds for deceptive ads in the hearing loss device market: Hearing aids are often not covered by Medicare and other insurance plans, and can be prohibitively expensive. A cheap option such as the MSA 30X would be welcome news to an individual who is hard of hearing and short on cash.
Pursuant to the settlement, defendants are barred from making claims that their device improves hearing by a factor of 30 or helps people hear clearly in crowded contexts. Any claims about the efficacy of any of their products are barred unless the company can muster the scientific evidence to back it up. A judgment of $47 million was also imposed, but it was suspended after the first payment of $500,000.
This case signals that the FTC will continue to take advertisers to task if claims, particularly establishment claims, are not supported by competent and reliable scientific evidence.