Consumer- and Skeptic-friendly FTC actions of 2012
by Josh DeWald
December 14, 2012
I thought I would take this time in the middle of December to quickly touch on some of actions the FTC did this year that people might be interested in, as they relate to fraudulent claims in the fields of finance, health, and general consumer protection that Skeptics might be interested in.
Fraudulent health insurance (pre-hearings) - At least two complaints against companies that the FTC believes that earned millions of dollars shilling "medical discount plans" which they claimed were accepted nation-wide by medical service providers, but were not in fact. Complaint against IAB Marketing Associates filed in a District Court in Florida, so is still ongoing. The other one, for "Health Care One" was filed in California.
Ab Circle Pro (refund) - The makers of the Ab Circle Pro (Fitness Brands, Inc.) will be paying as much as $25 million in refunds to consumers who believed that with "only 3 minutes a day" on their $200 product people would lose 10 pounds a week. It should come as no surprise that this claim was slightly less than true.
POM (hearings) - Scheduled for a final decision in January of 2013, but ongoing since September of 2010. The FTC complaint is essentially that the ads for POM Wonderful juice and POMx pills made unsubstantiated claims about the health effects of those products, mostly related to the ability to stave off cancer, but also general "health" claims. Since it has been going on for quite a while, there is quite a string of back and forth motions and responses from the lawyers on both sides of the trial. Of interest is the most recent FTC lawyers' response to POMs' lawyers claims that the ads for POM don't actually make explicit or implicit medical claims.
Skechers (refund) - In July, the FTC ordered that Skechers no longer make claims that their Shape-Up, Resistance Runner, Toners or Tone-up line of shoes can "strengthen" muscles. Nor can they claim their shoes specifically aid weight loss. If they the manufacturers really want to make that claim they will need at least two independent "well-controlled" clinical studies. Additionally, they agreed to pay $40 million in refundsto consumers who had purchased the shoes based on the claim.
Thermalean/Lipodrene and Spontane-ES (refund) - In January of 2009, the FTC successfully won against National Urological Group and Hi-Tech Pharmaceuticals (sounds legit!), and in August of this year they refunded $6 Million to consumers who had bought, due to misleading ads, supplements were supposed to help with weight loss (Thermalean and Lipodrene) and erectile dysfunction (Spontane-ES). It should come as no surprise that their claims of being "clinically proven" were slightly less than accurate. The FTC also links to an article about supplements, Who Cares: Dietary Supplements.
Disney and Marvel Hero-themed multivitamins (refund) - In March of 2011, the FTC made a judgement against the themed multivitamins manufactured by Rexall and Naturesmart (subsidies of NBTY) regarding claims that they would "promote healthy brain and eye development". In August of this year, the FTC urged consumers to contact them if they had purchased the vitamins as NBTY had agreed to pay $2.1 million in settlement charges. Unfortunately the deadline for filing a claim ended in October.
Brain-Pad mouth guards (settlement) - In late November, the manufacturers and marketers of the "Brain-Pad" mouthguard settled with the FTC regarding charges that their mouth guard helped prevent concussions, a claim not backed by evidence. As part of the settlement they may no longer claim any effect related to concussions for their products. Additionally, the FTC sent letters to 18 other manufacturers making similar claims.
Wal-born (refund) - In March of 2010 the FTC settled with Walgreens regarding their store-brand Airborne knock-off. As part of the settlement, Walgreens was barred from claiming the product could assist with cold or flu symptoms unless they could rustle up some actual evidence.They additional agreed to pay out $6m in refund claims, and November of this year, the FTC opened up the process. Consumers have until February of 2013 to file a refund claim.
Your Baby Can Read (settlement) - In August, the FTC settled with the makers of the "Your Baby Can Read" videos for the entirety of their profits to date ($185M, but they only pay $500K due to "failing financial condition"), effectively putting them out of business. They also ordered that the phrase "Your Baby Can Read" cannot be used in advertising until there are actual studies to back up the claim.
by Josh DeWald
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