Tread Carefully With Promises and Claims—or Face the FTC’s Wrath
Are there limitations on what you can claim about your health products and services? What are the consequences of violating those limitations? Learn how to avoid common marketing and advertising mistakes that bring unnecessary liability.
In this rapidly changing world, healthcare professionals have a growing array of dynamic products and services to offer to patients. When marketing your products and services, it can be tempting to make claims about their effectiveness in treating or preventing ailments, including COVID-19.
However, the Federal Trade Commission (FTC) limits the types of claims you can make when marketing health products and services. Failure to comply with the FTC may expose you or your organization to added legal liability and steep fines. The FTC pays the closest attention to claims about health and safety, so you must know how to play by the rules to advertise or endorse a product effectively.
The Federal Trade Commission and Truth-In Advertising Standards
The FTC truth-in-advertising standards seek to protect consumers/patients and health professionals like you from unfair business practices. Under these rules, the FTC requires that:
- Advertising be truthful and non-deceptive;
- Advertisers have evidence to back up their claims; and
- Advertisements cannot be unfair.
Penalties & Enforcement
The FTC has a variety of burdensome penalties it may levy in the face of a marketing violation. Thus, FTC compliance is crucial so that your organization can focus time and resources on patients and treatments— not fines and reporting requirements.
One FTC penalty is a cease-and-desist order. The FTC may send a cease-and-desist order if it determines your organization made claims that violated the law. Generally, these orders require your organization to halt the violative advertisement, substantiate all claims in future ads, and regularly report to the FTC about substantiation for claims in any new ads.
The FTC commonly imposes other penalties, as well. Organizations who violate FTC standards may be required, at their own expense, to take out new ads to correct any misinformation from original ads. Failure to comply with such orders can result in a fine of $43,280 per day, per advertisement.
Additionally, the FTC commonly requires organizations to pay civil penalties for violations. Depending on the violations, penalties may range from thousands to millions of dollars. In certain cases, organizations must give full or partial refunds to affected consumers.
Common Client Questions about Marketing and Advertising Claims
Can I say that my product or service will help relieve pain?
The FTC requires a “reasonable basis” for any claims you make in ads about your products and services. In other words, you must support your claims with evidence. Ads that make health or safety claims, in particular, must have reliable scientific support in the form of tests, clinical studies, or even human-subject trials where applicable.
In a recent case, the FTC found that Renaissance Health Publishing, LLC and its owner violated the truth-in-advertising standards when they falsely claimed to have clinical studies to support claims about their pain-relief pill, Isoprex. As a result, the FTC ordered Renaissance Health to stop making unsubstantiated claims and to refund $76,368.54 to consumers.
Can I say a product or treatment will reduce the chances of getting COVID?
COVID-19-related claims in ads are particularly problematic for many medical devices, supplements, and therapy treatments. As far as the FTC is concerned, no current study adequately supports claims that any products or services can prevent, treat, or cure the novel coronavirus.
Since the pandemic began, the FTC sent more than 350 cease-and-desist letters to individuals and organizations that marketed a product or service that claimed to prevent, treat, or cure COVID-19.
This summer, for example, the FTC announced an administrative settlement with a marketer of a supplement, Thrive. The marketer had falsely claimed that the supplement was an “anti-viral wellness booster” clinically proven to treat, prevent, or reduce the risk of COVID-19. Part of the settlement required the marketer to send written notices to Thrive consumers and retailers explaining that the product cannot prevent or treat COVID-19. The notice also informed recipients of the administrative settlement.
Can I use verbiage such as, “It has no side effects” or “it’s completely natural”?
The FTC applies the same above standard for substantiating claims about side effects and the natural composition of products or services. In other words, to limit your liability as an advertiser, it is crucial to ensure that you have sufficient evidence to support any claims that a product “has no side effects” or is “completely natural.” Failure to provide a reasonable basis for such claims in the form of scientific evidence puts you and your organization at a higher risk of legal liability and burdensome government enforcement measures.
In 2016, the FTC announced settlements with several companies that marketed shampoos, sunscreens, and skin treatments. These companies falsely claimed their products to be “all-natural” or “100% natural”. For each relevant product, the FTC found synthetic ingredients such as Dimethicone, Ethylhexylglycerin, and Phenoxyethanol. Each liable company was ordered not to make any future misrepresentations or face steep monetary penalties.
I’m a physician who was asked to give a testimonial about a product. If I say it works, do I have some liability?
The FTC prescribes baseline rules for the use of endorsements and additional rules for endorsements made by physicians in a professional capacity—expert endorsements. As a baseline, under FTC regulations, all endorsements must reflect the endorser’s honest experience or opinion. In addition, they may not contain deceptive or unsubstantiated claims.
Furthermore, your product endorsement as a physician must meet FTC requirements for an expert endorsement to avoid unnecessary liability. First, if you imply or expressly state in the endorsement that you are endorsing a product in your capacity as a doctor, you must be able to demonstrate you are qualified as an expert to give your opinion. In other words, you must show that your qualifications give you the expertise you purported to have in the ad.
Second, you must support your expert endorsement by some use of your expertise. For example, you might perform an actual evaluation of the product that other experts in the field normally would conduct to reach your endorsement’s conclusions. Falling short of these requirements can expose a physician-endorser to liability for making false or unsubstantiated claims about a product.
Does it matter whether I get paid for a physician endorsement?
According to FTC guidance, a physician is not likely required to disclose whether they are being paid for an expert endorsement of a supplement. Why not? The FTC believes that most consumers would expect such a physician to receive payment.
However, advertisers and endorsers alike may assume liability for physician testimonials in which they failed to disclose an unexpected material connection. Consumers, the FTC believes, are less likely to expect that the endorsing physician owns part of the supplement company or receives a share of sales profits. In this situation, the physician must provide clear and complete disclosure of the financial arrangement to guard against liability.
In 2017, for instance, the FTC announced settlements with the sellers of Supple, a glucosamine and chondroitin liquid supplement. Supple had claimed, without evidence, that the drink provided a wide range of benefits. Benefits included complete and long-lasting relief from joint pain including and severe pain caused by all forms of arthritis and fibromyalgia; cartilage repair; rebuilding of joints and entire joint structures; and restored mobility and joint function for consumers with severe mobility restrictions. Moreover, the seller claimed that Supple offered relief comparable to drugs or surgery.
The settlements resulted, in part, from allegations that Supple infomercials contained unsubstantiated “expert endorsements” from a Dr. Monita Poudyal. In the infomercials, Dr. Poudyal claimed to be an independent, impartial medical expert and acted as a medical show-style host.
According to the FTC complaint, the doctor failed to adequately qualify her expertise or support her endorsement of the supplement with an actual, requisite evaluation. Moreover, Supple and Dr. Poudyal each failed to disclose that Dr. Poudyal was married to Supple CEO Peter Apatow at the time of her endorsement. In the FTC’s eyes, such an arrangement constituted a material connection unexpected by consumers. The arrangement undermined claims that Dr. Poudyal was an independent, impartial medical expert.
In today’s ever-evolving healthcare landscape, it can feel like liability is hiding everywhere for advertisers and endorsers alike. It may be intimidating to market or endorse products and services, but it doesn’t have to be.
Above all, remember the importance of adequately supporting your advertising’s claims. At Jackson LLP, we can perform an advertising review to ensure your compliance not only with the FTC’s requirements, but other federal, state, and local laws as well.
The COVID-19 pandemic is a dynamic and evolving public health emergency. The laws and situation are fluid, and this article may not reflect the most current situation.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.