CPSC

  • Commissioner Ann Marie Buerkle has been named as CPSC’s acting chair, taking the reins from Commissioner Elliot Kaye. Buerkle will remain acting chair until the President nominates and the Senate confirms a permanent replacement.
  • CPSC announced a $5.8 Million civil penalty to settle charges that an American manufacturer failed to immediately report an unreasonable risk of serious injury related to an alleged defect in coffee brewing systems after about 100 reports of burn-related injuries over a period of four years. This is the second-highest penalty ever issued by the agency, though Commissioners Adler, Kaye, and Robinson issued a joint statement noting concerns about whether the amount is too low to have any meaningful deterrent effect on multi-billion dollar companies.

FDA

  • FDA has sent a second warning letter to an India-based drugmaker for alleged shortfalls in Illinois manufacturing plant inspections. The agency criticized the manufacturer for continuing to distribute batches of medication while an investigation was open to discover why previous batches failed stability testing.

FTC

  • On February 6, 2017, the FTC announced that VIZIO agreed to settle charges that it unlawfully collected television viewing information from consumers without their consent.
  • As part of the FTC’s ongoing enforcement in the dietary supplement space, on February 22, 2017, the Commission announced settlements with three dietary supplement marketers that used radio infomercials deceptively formatted as talk shows and fictitious endorsements to promote dietary supplements. Additionally, the defendants used false “risk free” trial claims without disclosing burdensome requirements for obtaining refunds.
  • On March 21, 2017, the FTC and the National Association of State Charities Officials will be hosting an event in Washington DC to discuss charitable solicitation practices and the role of consumer protection. For more information, see the Give & Take: Consumers, Contributions and Charity Event webpage.
  • The newly passed Consumer Review Fairness Act of 2016 prohibits a company from including in the terms and conditions of its contract a limitation prohibiting consumers from writing truthful consumer reviews. The FTC can investigate violations of this new law.

NAD

  • On March 13, 2017, Lee Peeler, President and CEO of the Advertising Self-Regulatory Council announced that Andrea Levine, Director of NAD, has decided to retire. In her 20 years as NAD Director, Andrea has transformed the self-regulatory process and published more than 2,600 case decisions. Andrea’s last date has not been announced, but the Council of Better Business Bureaus has begun its search for a new director. The job description for NAD Director is available on the Better Business Bureau’s website.
  • On March 1, 2017, the National Advertising Review Board announced that 18 new members have been selected to hear appeals of disputed decisions of the NAD or the Children’s Advertising Review Unit. For a list of new members, click here.
  • NAD highlighted the importance of disclosing material connections to third party websites and reminded advertisers that they cannot make claims in consumer testimonials that they cannot make on their own in a recent decision involving advertising for Hair La Vie dietary supplements. In a YouTube video advertisement, the advertiser featured testimonials from consumers who used Hair La Vie and experienced dramatic hair growth as well as expert endorsements on the product. However, the advertiser failed to provide any competent and reliable scientific evidence demonstrating that Hair La Vie growths thicker, stronger, or fuller hair. Further, NAD noted that expert endorsements are inappropriate when the endorser has not conducted a thorough evaluation or testing on the product. NAD also was concerned that the advertiser failed to disclose its affiliate marketing relationship with the third party website ConsumerSurvey.org. The website featured two features on the Hair La Vie product and rates it 4.7 out of 5. The website also included a hyperlink to the Hair La Vie website, where consumers could purchase the product. Noting that consumers are likely to weight ConsumerSurvey.org’s recommendations differently had they known that the website receives compensation for purchases of Hair La Vie from its website, NAD appreciated the advertiser’s willingness to add a disclosure stating ““Disclosure: We are compensated for our reviews. If you click through the links on this page and make a purchase on a partner site, then we receive a commission and/or financial benefit. This is how we keep the content on this site free and pay for the products that are reviewed on the site,” but reminded the advertiser that the disclosure must be clear and conspicuous. Finally, NAD also reminded the advertiser that ConsumerSurvey.org cannot make unsupported claims that the advertiser cannot independently substantiate. See Beauty Science Group, Inc./Hair La Vie, NAD Case Report #6055 (Feb. 2017). Press Release
  • NAD recently reminded advertisers that they must ensure that comparative pricing claims are frequently updated to ensure that the comparisons are accurate and, when comparing dissimilar products, material differences between the products must be clearly disclosed. Costco challenged the express claims “Who has time to comparison shop?  We do. We check hundreds of prices each week so you don’t have to”, “Don’t shop around town . . . shop at Wegmans and save” and “Prices checked on [date]” and implied claims that certain products sold at Costco are more expensive than the same products sold at Wegmans and consumers don’t need to comparison shop. NAD determined that some of  Wegmans’ price comparisons were inaccurate and Wegmans also failed to clarify the basis of comparison to clearly identify material differences between items being compared (e.g., cuts of meat). Additionally, NAD also recommended that Wegmans discontinue advertising claims that instruct consumers not to comparison shop because it contradicts the qualifier that prices are subject to change. See Wegmans Foods Markets, Inc./Wegmans Pricing, NAD Case Report #6054 (Feb. 2017). Press Release
  • NAD recently recommended that Nautilus discontinue use of the claim “all I had to do was walk” in the context of advertising that connects the claim to dramatic weight loss. NAD determined that while walking on the TreadClimber was a more efficient means of burning calories than some other exercise equipment, NAD also determined that the statement “all I had to do is work” when juxtaposed by testimonials and visual imagery showing dramatic weight loss communicated the message that walking on the Treadmill could achieve dramatic results without additional lifestyle modifications. While the advertiser submitted a study collecting weight loss data by TreadClimber users over a six week period, NAD had several concerns with the study’s reliability, including the short time frame to accurately represent the results shown in testimonials. Thus, NAD recommended that the advertiser communicate that exercising with the TreadClimber was simple, requiring only a walking motion, without the need to learn specific techniques. See Nautilus, Inc./Bowflex TreadClimber, NAD Case Report #6053 (Feb. 2017). Press release