FTC to advertisers: 7 New Year's resolutions
Sprinkle it on food. Slather it on skin. Place drops under the tongue. Regardless of how consumers use your product, if you make weight loss claims, here’s a New Year’s resolution to consider: Make sure you have sound science to support what you say. That’s just one message marketers can take from FTC actions against Sensa, L’Occitane, HCG Diet Direct, and LeanSpa, settlements that will return big money back to consumers – including $26.5 million to people who bought Sensa.
Through a national ad blitz, including TV commercials and retail sales at outlets like Costco, GNC, HSN, and ShopNBC, Sensa Products promised that consumers could eat less and lose weight without dieting or upping their exercise. The pitch was persuasive: “Simply sprinkle Sensa on, eat all the foods you love, and watch the pounds come off. It’s that easy.” Too bad the company didn’t have the science to back up its claims, says the FTC. What about the representation that Sensa had a sound clinical study proving people lost an average of 30 pounds in six months? False, according to the complaint. To settle the case, Sensa will turn over $26.5 million for consumer refunds. In the future, the defendants – including CEO Adam Goldenberg and creator/endorser/part-owner Dr. Alan Hirsch – will need two well-controlled human clinical studies to support weight loss claims for any dietary supplement, food, or drug.
The FTC’s case against personal care retailer L’Occitane (yes, we had to look up how to pronounce it) centers on slimming claims for Almond Beautiful Shape and Almond Shaping Delight skin creams. Touted as “cellulite fighters,” the products were advertised to “trim 1.3 inches" off thighs "in just 4 weeks.” In addition, said L’Occitane, the creams were “clinically proven” to significantly slim the body. But according to the FTC, the main thing that was slim was the supposed science upon which the company relied. L’Occitane will turn over $450,000 as part of the settlement.
The FTC’s settlement with HCG Diet Direct was just announced, but the purported active ingredient – a hormone produced by the human placenta – has been falsely touted for years as a weight loss aid. Online ads, consumer testimonials, and company-sponsored YouTube videos all claimed that people could lose lots of weight fast – as much as a pound a day – by placing HCG drops under the tongue before meals. The FTC challenged those claims, as well as the false representation that the product was FDA-approved.
The FTC also announced a proposed settlement with LeanSpa, one of the companies involved in those fake news sites promoting acai berry and “colon cleanse” diet products. The FTC and Connecticut went to court to challenge LeanSpa’s weight loss claims and to put a stop to the defendants’ practice of charging people’s credit cards for “free” trials and then signing them up (and billing them, of course) for recurring shipments without their permission. Under the terms of the proposed settlement with the LeanSpa defendants, LeanSpa’s Boris Mizhen will surrender cash, real estate, and personal property totaling about $7 million. His wife, who took money from the scheme but didn’t actively participate, will turn over another $300,000. The complaint against others involved in the promotion is pending in federal court.
Based on these settlements, what resolutions should companies consider for 2014?
1. Don’t make weight loss claims unless you have solid science to back them up. Diet products attract consumer attention, especially this time of year. But if you promise substantial weight loss without diet and exercise, chances are you’ll attract law enforcement scrutiny, too. To help publishers and broadcasters spot bogus diet ads before they’re disseminated, the FTC has just released Gut Check: A Reference Guide for Media on Spotting False Weight Loss Claims. After reading it, take this quiz to see if you can trust your gut about spotting clearly false weight loss promises. More about Gut Check soon.
2. Before making claims, study the study. You’ll want to read the complaint for details, but the FTC’s case against Sensa cites a load of deficiencies with the company’s so-called science. For example, one study wasn’t blinded, didn’t use a placebo, didn’t account for subjects who dropped out, and didn’t monitor subjects’ diet and exercise. Another study exhibited many of the same flaws, but this time subjects were told to diet and exercise, instructions at odds with what the ads claimed. In a third study, results were allegedly sent to Sensa before the subjects were actually weighed. Furthermore, Sensa claimed that a clinical study conducted by an independent lab proved the product worked. But according to the complaint, Sensa funded the study and controlled how it was designed, carried out, and reported. So much for “independent.”
3. Expert endorsers need to exercise their expertise. It seems like an obvious point, but the law requires experts to base their endorsements on an examination or testing of the product at least as extensive as what other experts in the field would normally conduct. The FTC alleges that Sensa creator Dr. Hirsch didn’t live up to that standard.
4. Disclose if consumers get goodies for their endorsements. The FTC charged that some consumers got cash (from $1000 to $5000) or free trips to Los Angeles for endorsing Sensa. As the FTC Endorsement Guides make clear, that’s a material connection that needs to be disclosed.
5. Beauty may be skin deep, but slimming claims may require more. When companies like L’Occitane sell scented candles or fancy soaps, substantiation usually isn’t an issue. But when ads promise that a product can slim thighs in four weeks or that scientific testing proves it can significantly reduce cellulite, companies have raised the bar. Don’t let the label “cosmetic” mislead you about your legal obligation to substantiate your claims.
6. Pay attention if the FTC sends you a warning letter. HCG Diet Direct was one of seven companies that got a joint FTC-FDA letter in November 2011 warning them about iffy HCG claims. Companies that don’t heed words to the wise shouldn’t be surprised when law enforcement follows. (Come to think of it, even if a warning letter isn’t addressed to your company, it’s smart to take a look.)
7. Get consumers’ express consent before billing their credit cards. C'mon. How many more cases will it take before companies get the message? It’s illegal to bill people’s credit cards without their express consent. Period.
Want to learn more about the announcement? Join FTC staff on a Twitter Chat at 12:30 ET on Wednesday, January 8, 2014, to discuss the law enforcement sweep and the Gut Check guidance for media outlets.