Advertisers should be uncomfortable with unsubstantiated disease claims

The “before” photo shows a silver-haired woman in a wheelchair, a hand on her frowning brow. “Twenty-four hours later,” she knits on her couch with a smile on her face, thanks to a dietary supplement proven in clinical studies involving 1,200 people to reduce or eliminate symptoms of joint pain, high blood pressure, diabetes and depression. How’s that for a bonus? Users can “easily lose 8-13 pounds.” every week. “

There’s also a pill that can “protect the brain from the ravages of Alzheimer’s and dementia” – a claim it says is backed by solid scientific evidence.

Surprised? do not do that. These are just some of the deceptive claims and practices challenged in the complaint filed by the Federal Trade Commission and the Maine Attorney General’s Office against Health Research Laboratories, LLC and its president, Kramer Duhon.

The defendants used direct mail campaigns and websites to market BioTherapex and NeuroPlus. The Federal Trade Commission and the Maine Attorney General accused the health research laboratory of not having proper evidence to support its claims. How about that 1,200-person clinical study involving “200 experts from 14 countries” presented at the “prestigious San Diego Hepatology Meeting”? The lawsuit claims this was fabricated. The complaint also alleges that compelling consumer testimonies and expert endorsements of mandatory stethoscopes worn around the necks of medical professionals in white coats are false.

You’ll have to read the indictment to understand the breadth of the health claims made in the ads, but the case also focuses on the defendants’ “free” offers. The FTC and the Maine Attorney General allege that people who responded to the promotion received a “risk-free trial offer” with undisclosed conditions attached. For example, the defendants require consumers to pay a non-refundable initial shipping fee as well as a fee for unsatisfactory returns. Additionally, the complaint alleges that many consumers received 30 or 60 days of BioTherapex or NeuroPlus “for free,” but were not informed that defendants started the clock on the day the order was placed, which is typically 10-14 days before the order was placed. The product reaches the consumer. The defendants also interpreted their “risk-free trial offer” to mean that the company must receive any merchandise returned by consumers before the trial period ends.

Additionally, the FTC and Maine AG allege that defendants enrolled consumers in automatic renewal programs without fully disclosing actual circumstances and then charged their credit cards or debit cards without their express informed consent. Charging fees to debit cards is a violation of the Federal Trade Commission Act, the Electronic Transactions Act, the Funds Transfer Act, Reg E, and Maine law.

Additionally, the indictment alleges that the defendants used deceptive upsells to promote other companies’ merchandise, with the health research laboratory receiving generous commissions from these transactions. Often, these were club memberships, and the defendants failed to identify the third-party sellers by name and failed to clearly and conspicuously disclose information about cancellations or refunds.

As the complaint reminds other businesses, telemarketing sales rules impose specific requirements on companies that use upselling, a practice defined as “soliciting the purchase of goods or services after an initial transaction during a telephone call.” Among other things, companies must identify the third-party seller and clearly disclose the total cost of the offer. If any claim for refund or cancellation is made, all material terms must be clearly disclosed. The complaint alleges that Health Research Lab’s upselling practices violated telemarketing rules, the Federal Trade Commission Act and Maine law.

The proposed settlement prohibits defendants from bringing any of the FTC’s seven gut-check weight loss claims. The order also requires human clinical testing to support future weight loss results; a range of claims related to arthritis, pain relief, Alzheimer’s disease, dementia and memory loss; and claims that the product can cure or treat any disease. . Defendants will need strong and reliable scientific evidence to support other claims of health benefits or efficacy for any dietary supplement, food, or drug. The order also prohibits misrepresentations to consumers or expert endorsers.

Additionally, the order establishes regulations to protect consumers from certain practices related to trial offers, chargebacks, negative selection, unauthorized charges, etc. (Part IX includes the specific disclosures defendants must make regarding “free” or “risk-free” offers, and Part X details the procedures they must follow to obtain consumers’ express informed consent to include the negative option.) $3.7 million The judgment will be suspended upon payment of $800,000.

The case raises four key points.

• Companies need serious science to back up claims about serious medical conditions. It’s important to proceed with caution before making a commitment to treat or prevent difficult conditions like arthritis, dementia, or Alzheimer’s disease. Dramatic displays that capture consumers’ attention may also draw scrutiny from state and federal law enforcement.
• When using endorsements, keep it real. If your ad explicitly or implicitly implies that the consumer depicted is a real person who has used the product successfully, then it must be true. The same is true for anyone represented as a medical professional or other expert. Read the FTC’s Endorsement Guidelines for a compliance review.
• Reduce your legal risk when offering a “risk-free” trial offer. One of the keys to a clean trial offer is clear, obvious and upfront disclosure. Explain material terms in a way that is easy for consumers to understand. The same goes for negative options and auto-ship programs. A consumer’s credit or debit card may not be charged without the consumer’s express and informed consent. (Of course, such web-based offers are subject to ROSCA (Restoring Online Shopper Confidence Act).)
• Keep your upsells going. If it’s been a while since you reviewed the Telemarketing Sales Rules, pay special attention to the TSR’s rules regarding upselling and modify your practices accordingly.

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from Tech Empire Solutions https://techempiresolutions.blogspot.com/2024/01/advertisers-should-be-uncomfortable.html
via https://techempiresolutions.com/