FTC warns hundreds of advertisers regarding unsupported product claims

The Federal Trade Commission on Thursday announced notifying hundreds of advertisers, including dietary supplement firms, they should avoid ads for product claims that cannot be supported by scientific evidence.

Through the notice of penalty offenses, FTC can seek civil penalties of up to $50,120 per violation against a company that commits acts it knows has been found unlawful in a previous FTC administrative order other than a consent order, the Commission said in a news release.

The FTC notices warned advertisers about failing to have competent and reliable evidence for objective product claims or to support health or safety claims, according to the news release. Advertisers also were cautioned about other unlawful acts and practices, including not backing up their claims to cure, mitigate or treat a serious disease with at least one well-controlled human clinical trial.

The Commission further warned advertisers of the consequences of misrepresenting the level or type of substantiation for a claim or misrepresenting that a product claim has been clinically or scientifically proven.

“The requirement for advertisers to have adequate support for their advertising claims at the time they’re made is a bedrock principle of FTC law,” said Sam Levine, director of FTC’s Bureau of Consumer Protection, in the news release. “The prospect of steep civil penalties will help ensure that advertisers don’t play fast and loose with the truth.”

The notices were sent to marketers of OTC drugs, homeopathic products, dietary supplements and functional foods. The full list of recipients who received a notice is published here.

"A recipient’s inclusion on the list does not in any way suggest that it has engaged in deceptive or unfair conduct," the Commission stated.

“With today’s notice of penalty offenses for product claims, the FTC made it clear that health claims and endorsements are high priority, and it will use all possible avenues to obtain monetary penalties,” attorney Lauren Aronson, a partner in the nation’s capital with Amin Talati Wasserman LLP, said in an email. “While the scope of the FTC’s penalty offense authority remains untested, advertisers making product claims—particularly health and safety claims—should take note and carefully review the FTC’s recently issued Health [Products] Compliance Guidance and proposed updates to the Endorsement Guides to ensure that their marketing complies with the latest FTC guidance.”

According to the Commission, many sellers continue to make unsupported claims about their products and false representations about evidence they possess to support the statements, despite the agency’s “long history of providing guidance on advertising substantiation, through both litigated cases and policy statements.”

FTC in December published a 40-page “Health Products Compliance Guidance,” which supplanted a document issued in 1998, “Dietary Supplements: An Advertising Guide for Industry.” Since the 1998 guidance was published, FTC has filed more than 200 cases challenging false or misleading advertising claims for dietary supplements, foods, over-the-counter drugs and other health-related products, according to an FTC news release on Dec. 20 announcing the new document.

FTC commissioners comment on notice of penalty offenses 

“The principles behind our substantiation program are simple,” FTC Commissioner Rebecca Kelly Slaughter said in a March 31 statement, joined by FTC Chair Lina Khan and Commissioner Alvaro M. Bedoya. “If a company makes a claim about what its product can do, it must back that claim up with reliable evidence. If a company makes a claim about the health and safety benefits of a product, that claim must be based on scientific evidence. If a company claims that its product can cure, mitigate or treat a serious disease such as cancer or heart disease, it must back up that claim through the accepted standards of scientific testing, including randomized [controlled] trials.”

The FTC officials suggested the notices represented the fourth time the Commission has issued notice of penalty offenses following a U.S. Supreme Court decision in 2021. In AMG Capital Management LLC et al. v. Federal Trade Commission, the nation’s highest court eliminated FTC’s ability to seek monetary relief under Section 13(b) of the Federal Trade Commission Act.

“Obtaining access to civil penalties for first-time offenders through this Notice is essential to changing the dynamics of the marketplace,” Slaughter, Khan and Bedoya said. “Injunctive relief alone cannot, and will not, remediate the harm from these practices, but monetary penalties can send a strong message to potential violators.”

In a dissenting statement, FTC Commissioner Christine S. Wilson said the vote to issue the notices occurred on March 31, the day her tenure at the agency concluded.

“I am wary of a 13(b) fix that would afford the Commission significant latitude to seek equitable monetary relief in all substantiation cases, many of which involve complex and nuanced issues and dueling experts,” Wilson said. “For related reasons, it seems inappropriate for the Commission to seek civil penalties in substantiation cases. Even if I were to set aside those concerns, I am dubious that this initiative is an efficient use of scarce and finite resources.”

Editor's note: This story was corrected to reflect the FTC's notice that advertisers could face civil penalties if their claims are not substantiated. The original article incorrectly stated advertisers were accused of failing to have substantiation for their claims. In fact, FTC stated plainly that a company's inclusion on a list of recipients who received notice of penalty offenses does not suggest it engaged in deceptive conduct. Natural Products Insider regrets the errors.