Here's a quick recap of the two responses to referrals from the National Advertising Division ("NAD") that the Federal Trade Commission ("FTC") released over the last month.
As part of its routine monitoring program, NAD reached out to Mask, LLC to request substantiation for claims made on a third party retailer's website about the company's "Spotless Acne and Psoriasis Sheet." In addition to questioning the product's name, NAD asked for substantiation for claims such as, "Helichrysum Essential Oil may work to help heal blemishes, encouraging signs of skin renewal and cell turnover to lessen the look of redness and scarring." Ultimately, NAD determined that the advertiser didn't have sufficient substantiation for its claims, and NAD recommended that the product name, and that claim, be discontinued. After the advertiser refused to comply, NAD referred the matter to the FTC. In an October 27, 2020 letter to NAD, the FTC indicated that it was not taking any action in response to the referral, taking into account a number of factors, including "enforcement priorities, resource allocation, the nature of any FTC Act violation, and the type and severity of any consumer injury."
As part of NAD's initiative with the Council for Responsible Nutrition ("CRN"), CRN challenged certain advertising claims made by Leptitox Nutrition for its Leptitox detox, appetite suppressant and weight loss support dietary supplement product. CRN challenged claims such as, "I love this type of weight loss plan because you do not need to think about nutrition at all, just take a few capsules a day and job done!" and "A breakthrough solution for the treatment of fat storage and belly fat with a natural and safe solution that addresses the rootcause of weight gain, leptin resistance!” After the advertiser failed to respond to NAD's request for substantiation, NAD referred the matter to the FTC. In a November 10, 2020 letter to NAD, the FTC said that it decided not to take any action (citing the same factors mentioned above).
If you fail to respond to an NAD inquiry, or if you refuse to comply with NAD's recommendations, NAD will almost certainly refer the matter to the FTC or another appropriate regulatory authority. These closing letters show, however, that whether the FTC will take action in any individual case is less certain.
"we considered a number of factors including enforcement priorities, resource allocation, the nature of any FTC Act violation, and the type and severity of any consumer injury"
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