Supplement Seller Barred from Making Misleading Health Claims

The FTC has announced that Florida-based marketers and sellers of Aloe vera-based supplements have agreed to settle Federal Trade Commission charges that they deceived consumers with false and unsupported claims that two products were effective treatments for a range of conditions affecting seniors, including chronic pain, ulcerative colitis, diabetes and acid reflux.

The court order resolving the FTC’s complaint bars the defendants from making false and unsubstantiated health claims and requires them to pay $537,500, which the FTC may use to provide refunds to defrauded consumers.

The order also requires the defendants to disclose any material connection they have with compensated reviewers.

“The FTC has shown over and over that it will go after companies that we believe are peddling false health claims about their pills and potions,” said FTC attorney Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Our settlement … is the latest example, and we’re especially concerned that the company targeted older adults and tried to steer them away from standard medical treatments.”

According to the complaint, the company and individual officers violated the FTC Act in connection with the marketing and sale of the products.

The FTC alleges that since May 2002, the defendants have marketed and sold the products primarily through direct mail to consumers nationwide. The FTC alleges that the defendants claimed that these products could improve cholesterol and triglyceride levels, relieve chronic pain, and mitigate or treat various diseases and health conditions, including ulcerative colitis, diabetes, and acid reflux.

The FTC alleges that the defendants’ claims were deceptive and not supported by competent and reliable scientific evidence. Marketers should consult with an experienced FTC defense attorney prior to disseminating any advertising claims to ensure that they meet applicable claim substantiation requirements.

The FTC further alleges that the company used testimonial reviews by seemingly independent users, but failed to disclose that the reviewers received free products or free lifetime memberships as compensation for providing the reviews.

The order recently announced settles the FTC’s charges and prohibits the defendants from making health-related claims or the claims challenged in the complaint unless they have competent and reliable scientific evidence to substantiate that the representation is true.

The order also prohibits the defendants from making other misleading or unsubstantiated claims about the health benefits, performance, efficacy, safety, or side effects of any covered product, and requires them to have competent and reliable scientific evidence to support any such claims they make.

Under the order, the defendants must clearly and conspicuously disclose to consumers all material connections with anyone providing an endorsement. An FTC defense attorney can assist marketers with complying with the FTC Endorsement Guides. They also must send notices about the settlement to consumers who bought the products. The order also imposes an $18.7 million judgment against the defendants, which will be partially suspended after they pay the FTC $537,500.

Richard B. Newman is an FTC defense attorney at Hinch Newman LLP. Follow him on Facebook @ FTC defense attorney.

Informational purposes only. Not legal advice. Advertising Material.
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