This past week, several consumer protection and regulatory actions made headlines:
FTC to Host Consumer Disclosure Workshop in September
The Federal Trade Commission has announced that it will be hosting a September 15, 2016 workshop, “Putting Disclosures to the Test,” on the efficacy and costs of consumer disclosures in advertising and in privacy policies. Planned discussion topics include examining disclosures meant to avoid deception in advertising, disclosures designed to inform consumers of data tracking, and industry-specific disclosures for jewelry, environmental and fuel-saving claims. The workshop is open to the public and will take place at the FTC’s Constitution Center offices in Washington, DC. The FTC currently is soliciting presentation proposals for the workshop; submissions may be sent to [email protected].
FTC Chair Testifies Before Congress Regarding Commission’s Role in Protecting Consumers and Competition
On May 24, 2016, FTC Chairwoman Edith Ramirez testified before the U.S. House of Representatives Committee on Energy and Commerce’s Subcommittee on Commerce, Manufacturing and Trade. The testimony focused on 17 pending bills which will either expand the FTC’s jurisdiction or otherwise impact the FTC’s mission to protect consumers and competition.
FTC Settles with “Mosquito Shield Band” Marketers for $300,000
On May 24, 2016, the FTC announced that it had reached a settlement regarding allegations that Viatek Consumer Products Group, Inc. and its president, Lou Lentine, made deceptive claims about Viatek-branded Mosquito Shield Bands. Additionally, the FTC charged Viatek and Lentine with violating a 2003 administrative order requiring them to have competent and reliable evidence to support any advertising claims made by the company.
Viatek Mosquito Shield Bands contain mint oil and was marketed directly to consumers and through retailers like HSN. According to the FTC’s February 2015 complaint, Viatek claimed that the mint oil in Mosquito Shield Bands created a “vapor barrier,” and will shield people within 5 feet of the product from mosquitos. The FTC alleged that Viatek did not have competent and reliable scientific evidence to support such claims.
In addition to paying $300,000 to the FTC, the defendants are required to have competent and reliable evidence to substantiate any claims of efficacy for their products. The defendants must also adhere to the 2003 FTC order.
FDA Issues Guidance for Including “Evaporated Cane Juice” on Ingredient Labels: Don’t
On May 25, 2016, the Food and Drug Administration (“FDA”) issued guidelines for proper labeling of foods containing certain sweeteners. Recently, manufacturers have listed “evaporated cane juice” as an ingredient on certain food products. The FDA has taken the position that the term “evaporated cane juice” is misleading and does not accurately describe what the ingredient is – namely, the ingredient is effectively a sugar or syrup, not the “juice” from sugarcane. This follows draft guidance issued by the FDA in 2009 and a supplemental comment period in 2014.
NAD Recommends Changes to Joyus Native Videos
The National Advertising Division (“NAD”) of the Council of Better Business Bureaus is recommending that online videos and product recommendation sites more clearly disclose if they are in fact advertisements for products. Joyus, Inc., sells “Dr. Brandt’s Needles No More Wrinkle Relaxing Cream,” which is marketed through the online edition of People Magazine. The product was listed in the “Stuff We Love” feature of People. Videos of various products included links to purchase the products. NAD ruled that although the videos were clearly promotional in nature, neither the videos nor the “Stuff We Love” page clarified that Joyus and People had a partnership to promote the sales of Joyus products.
NAD recommended that the advertiser disclose that links to the “Stuff We Love” are in fact links to a shopping partnership, and Joyus has indicated that it intends to comply with NAD’s recommendation.
Separately, Joyus made several claims regarding the efficacy of the product, which it voluntarily stopped as a result of the NAD investigation.
“Anti-AGin Gin” Discontinued after NAD Investigation
After the NAD investigated claims made regarding an “anti-aging gin,” manufacturer Bompas & Parr has discontinued the product. NAD requested substantiation for a number of claims Bompas & Parr made regarding “Anti-AGin Gin,” including, “for people who want to stay young but don’t want to give up drinking” and “[r]ejuvenates the skin while you drink.” In response to NAD’s requests for substantiation, Bompas & Parr voluntarily ceased selling the product. As a result, NAD did not review the claims on the merits, but is treating the outcome as though NAD had recommended the discontinuance of the claims.
Prestige has indicated that it intends to comply with the NAD recommendation.