Hunton Retail Law Resource

This past week, several consumer actions were made that affect the retail industry.

NetSpend Settles Deceptive Advertising Claims with FTC

NetSpend Corp recently agreed to settle FTC allegations that the company deceived consumers about access to funds deposited to debit cards. The FTC voted to approve the stipulated final order, with Commissioner McSweeney and former Commissioner Ramirez voting to approve and Acting Chairman Ohlhausen dissenting.

In litigation filed in November 2016, the FTC alleged that NetSpend told consumers, many of whom did not have bank accounts, that its reloadable prepaid debit cards allowed them to store and immediately access their funds. However, once the customer loaded funds onto the cards, they found they were blocked from accessing the money. The settlement requires NetSpend to cease their false advertising and pay back at least $53 million in relief to affected customers.

NAD Refers Adderin Dietary Supplement Claims to FTC

The NAD referred advertising claims made by KNH Online, Inc., to the FTC after the company failed to respond to the NAD’s request for substantiation for claims made about their Adderin Dietary Supplement product.

The Council for Responsible Nutrition challenged certain claims made by KNH, asking the NAD to determine if KNH possessed adequate evidence to support health-related claims, including that the supplement improved concentration, increased short- and long-term memory and improved energy levels. KNH did not provide any evidence to substantiate the challenged claims.

ThermiGen Will Discontinue Claims after Competitor Challenge

ThermiGen, LLC, announced that it has voluntarily discontinued claims for their ThermiVa medical device after competitor Viveve, Inc., challenged the claims before the NAD. ThermiVa is a radio-frequency device used for certain dermatological and general surgical procedures. The device was cleared for sale by the Food and Drug Administration in 2013.

Viveve challenged claims that stated the device treats bladder dropping and the effects of menopause. During the proceedings, ThermiGen made a written voluntary commitment to the NAD to permanently discontinue the challenged claims and to instruct customers and physicians not to use the challenged claims in connection with their own marketing.

Johnson & Johnson to Discontinue Certain Sunscreen Claims after NAD Proceedings

The NAD recommended that Johnson & Johnson Consumer, Inc., modify or discontinue certain claims made for its Neutrogena UltraSheer Dry-Touch Sunscreen SPF 100+ after a competitor challenge by Bayer Healthcare LLC. The challenged claims included that the sunscreen was the “best feeling sunscreen ever” with “unbeatable UVA/UVB protection.” The NAD determined that some of the claims may be line claims, applying to the entire product line, which is available in multiple SPF levels. In addition, the NAD recommended Johnson & Johnson discontinue the comparative feel claims. The company agreed to comply with NAD’s recommendations.

CARU Recommends Tech 4 Kids Modify 3D Magic ImagiPen Claims

The Children’s Advertising Review Unit (“CARU”) recommended that Tech 4 Kids modify broadcast advertising for their 3D Magic ImagiPen product. The product is a 3D pen that turns a liquid gel into solid plastic by drying under an LED light. The advertising states that the plastic dries instantly, though the product instructions state that creations should be left in direct sunlight for several hours. In addition, the product package and instructions state that use of the product should be supervised by an adult.

CARU recommended that the advertising include an audio and visual disclosure that the product takes time to create and dry and that adult supervision is required. Tech 4 Kids stated that it disagreed with CARU’s recommendation, but would comply with the recommendations if they decide to engage in future television advertising.