The Federal Trade Commission announced that it entered into a settlement with the marketer of a dietary supplement called Synovia, resolving allegations that the company falsely advertised that the product treated arthritis and helped to alleviate joint pain. The settlement, with A.S. Research ("ASR") and its owners, requires them to pay more than $800,000 in damages.
Andrew Smith, the Director of the FTC's Bureau of Consumer Protection, said, "This company claimed to sell a miracle supplement that cured joint pain and arthritis, but they lied to consumers about the product’s results and also used fake testimonials and fake doctor endorsements."
The FTC alleged that through newspaper, direct mail, and online advertising, ASR made false and unsubstantiated claims about the effectiveness of Synovia, including that the product provides "dramatic relief from swelling, pain and stiffness" and "restores and rebuilds your joints at the molecular level to wipe out pain."
The FTC also charged the marketer will using false and misleading consumer testimonials to promote Synovia. The FTC said that some testimonials were obtained by giving consumers free product in exchange for "especially positive and inspiring" reviews" of Synovia. Those testimonials were false and misleading, the FTC said, because not only did the marketer fail to disclose that they were paid for their endorsements, but they had actually used a prior version of the product with different ingredients. The FTC said that ASR also misled consumers by having one of its owners endorse the product in its advertising without disclosing his connection to the company. The FTC also alleged that ASR used consumer testimonials that were completely fabricated, including, for example, by inventing an "Iowa man, Harold Jenkins" who "no longer needs his walker at age 74."
The FTC said that ASR also used false and misleading expert endorsements from medical doctors who did not have expertise in joint pain relief and who did not review or examine the advertised formulation of Synovia.
The FTC also alleged that ASR used telemarketing scripts that were false and misleading as well. The FTC said that, no matter what medical complaint consumers called about, ASR's telemarketers would respond, "We’ve been getting amazing feedback from people with similar issues which tells me Synovia is going to be a great fit for you!"
The FTC said that ASR also used deceptive pricing tactics to get consumers to pay extra for the product. The FTC alleged that the company upsold consumers to Synovia "Plus" for an additional $9.95 per bottle, even though both versions of the product contain the same ingredients.
While at first glance, this is just a case about yet another marketer being charged with making false health claims about a dietary supplement, there's actually some important guidance here for marketers generally:
- If you make health claims about your product, you'd better have competent and reliable scientific evidence to back up those claims. And the testing you have should generally be on the current version of the product.
- The FTC isn't just concerned about misleading influencer endorsements in social media. If you're using endorsers in traditional advertising, the same rules apply. (Wow, I can't believe I actually just said that.)
- When using consumer endorsements, if the consumers have been incentivized to endorse the product (such as by getting free product), that fact must be clearly and conspicuously disclosed wherever you use the endorsements.
- Even if you disclose a material connection that you have with an endorser, you still should only use endorsements that reflect a consumer's honest opinions, findings, beliefs, and experiences. One of the ways to ensure that you're getting consumers' real opinions is through soliciting their opinions in a neutral manner -- not asking them (or requiring them) to give you a positive endorsement.
- Don't misrepresent that a model or an actor is an actual consumer. If you're using models or actors to portray consumers, and if the public will be confused about whether the person is a real consumer, you should clearly disclose what's going on.
- The same endorsement rules apply to company employees. If they're speaking about the product, you need to ensure that their connection to the company is disclosed as well.
- Before using expert endorsements, make sure that the expert is actually an expert in the field that he or she is speaking about, and that the expert has actually exercised his or her expertise as would reasonably be expected. For example, it's not likely that an expert can endorse a product if he or she hasn't examined the ingredients or tested the product.
- Telemarketing scripts are advertising too. Just because it's a one-on-one conversation doesn't mean you're not responsible for substantiating the statements that your telemarketers make.
- If you're asking consumers to pay more for a particular version of a product, make sure that they're actually getting what they paid for.
As for "Harold Jenkins," well, I guess he's still using that walker. Unless he never used one to begin with . . . .
“If you lie about the effectiveness of your product, the FTC will hold you accountable" -- Andrew Smith, Director, FTC Bureau of Consumer Protection