The FTC on Product Claims

A few weeks ago, I interviewed officials at FTC and FDA about product claims. I wanted to get their take on what they look for, the challenges they encounter, and anything else. Not only did I want to hear the agencies' side, I figured their insight might benefit companies.

Today, I'm offering the highlights of my interview with Rich Cleland,  assistant director, division of advertising practices, with FTC. In a day or two, we'll hear from the good folks at FDA.

Product claim issues come from a variety of sources:. "We do a good deal of monitoring. We do Internet search. We look at television advertising, print advertising. We get complaints from competitors, consumers. We get referrals from self-regulatory agencies..."

Cleland added that special attention is paid to products with national advertising, which has the potential for the most physical and financial harm.  Disease claims and products focusing on children are big concerns.

FTC can't cover everything: Since the product claims process is research intensive--outside experts may be hired to examine a potential case--"we can only investigate and bring a limited number of cases," he explains.

...Especially online:  "There is a huge problem on the Internet. I don't have a solution for that," Cleland says. "And I think it's dragging down the rest of the industry. There are exceptions, but it's easier for us to deal with marketers who are marketing their products through the TV and print advertising. But I think in terms of the Internet, it is simply out of control.

"There are thousands and thousands of problematic websites selling dietary supplements for disease. We simply do not have the resources, particularly given what's involved in an investigation to do these cases. We've tried to adjust to that by greater use of warning letters both by our own agency and joint letters with FDA..." 

FTC has 20 full-time employees handling suspect product claims. Would more work? "I don't know. That's over my pay grade. Seriously, if you think about in the context of what the situation is, even if you doubled that number, you may not have an appreciable impact."  

Advice to companies on product claims:  "I think companies need to have good, independent expert advise, both on the scientific and the legal side. Know the regulations, know the science. One of the things that I see with some frequency—[it's] not illegal, but not a good practice: don't make the scientist you're relying to evaluate evidence an expert endorser."  

Also: Companies should not have the marketing department overrule scientific and legal departments. "A company that has a culture of that is asking for trouble," Cleland says. This is especially important because companies interpret their ads too literally, Cleland adds. An improper photo in an ad can get a company in trouble.

 In conclusion: "I'm always willing to lay out what the standards are, what the practices are. Because, again, if we have any hope of having an effect on this market, we need a high level of voluntarily compliance. Trying to work with the industry makes sense."