Phyllis H. Marcus

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This past week, several self-regulatory advertising decisions made retail headlines.

Finish Quantum Dishwasher Detergent Beaten by “Unbeatable” Claim

In response to a challenge brought by P&G, the NAD recommended that Reckitt Benckiser LLC, manufacturer of dishwasher detergent brand Finish Quantum, discontinue its claims that the detergent provides an “unbeatable clean.” After reviewing Finish Quantum’s test data, the NAD determined that the “evidence was not sufficiently reliable to support the challenged ‘unbeatable clean’ claim.” Finish Quantum can, however, continue use of its value claim that its product provides “25% more loads,” so long as the claim is qualified by adding the phrase, “based on retail pack size comparison” between Finish Quantum and leading alternatives such as Cascade Platinum. Reckitt Benckiser stated that it will comply with the NAD’s recommendations. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

Nectar Brand to Put Its “Made in America” Claims to Bed

Nectar Brand LLC has agreed to stop making unqualified claims that its mattresses were made in the United States. According to the FTC’s complaint, Nectar Brand sells mattresses under several brand names, including Nectar Sleep, DreamCloud LLC and DreamCloud Brand LLC. Nectar Brand’s ads and product labeling included statements that the products were “Designed and Assembled in USA.” In fact, the FTC alleged that the mattresses all are imported from China and that Nectar Brand has no assembly operations in the U.S.

Under the settlement terms, Nectar Brand is prohibited from representing that its products are made in the United States unless it can substantiate its claims. Further, Nectar Brand’s officers are prohibited from misrepresenting the country of origin of its products. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

FTC v. AT&T Mobility: “Good News for Consumers” Per FTC Chairman

The Ninth Circuit Court of Appeals rules en banc in FTC v. AT&T Mobility, LLC, that the FTC could challenge AT&T’s broadband data throttling practices, despite the fact that AT&T is a “common carrier” subject to exemption under the FTC Act. The court ruled that the common carrier exemption was activity-based rather than status-based. Therefore, the FTC may challenge a carrier’s non-carriage unfair or deceptive acts or practices. Simply put, “a phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology means that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more.” Acting FTC Chairman Maureen K. Ohlhausen issued a statement praising the Ninth Circuit’s decision as “good news for consumers.” Continue Reading Consumer Protection in Retail: Weekly Roundup

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

TA Sciences Prohibited from Making False and Unsubstantiated Health Claims

Telomerase Activation Sciences, Inc. (“TA Sciences”) has agreed to stop making certain claims as to the anti-aging and other health properties of two of its supplement products, in response to FTC allegations that it made false or unsubstantiated claims regarding the products’ health benefits. The FTC’s order prohibits TA Sciences from misrepresenting that its products are clinically proven to reverse human aging, prevent or repair DNA damage, restore aging immune systems or increase bone density, or misrepresenting that such evidence or studies exists. The order also prohibits the company from (1) representing that paid commercial advertising is independent programing; (2) failing to disclose material connections between a product endorser and the company; (3) representing that any endorser is an independent user of the product; or (4) helping anyone else make false or misleading health and efficacy claims about its products. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

Advertising Agency Pays $2 Million to FTC and State of Maine to Settle Unsubstantiated Weight-Loss Claim

The FTC and the State of Maine have settled a case against ad agency Marketing Architects, Inc. (“MAI”) for MAI’s role in creating and disseminating deceptive radio ads replete with unsubstantiated claims for weight-loss products. MAI had been retained to create the ads by dietary supplement supplier, Direct Alternatives, Inc., whom the FTC and Maine had sued in 2016. Under the agreement with MAI, the ad agency is banned from making any of the seven “gut check” weight-loss claims that the FTC has publicly advised are always false. MAI also must have competent and reliable science to support weight-loss claims and must not misrepresent facts relating to return and cancellation policies of the products marketed. Finally, the order imposes a $2 million judgment on MAI, which may be used to provide refunds to consumers harmed by the conduct. Continue Reading Consumer Protection in Retail: Weekly Roundup

Recently, President Trump announced that he sent names of four nominees to serve as commissioners on the five-member Federal Trade Commission (“FTC”) to the Senate for approval. If all four of the nominees are confirmed, it will still leave one remaining vacant seat on the FTC, which has been operating as a bipartisan two-member interim agency since early last year. The nominees, three of whom were announced last fall, consist of three Republicans—Joseph Simons, Noah Phillips and Christine Wilson—and one Democrat, Rohit Chopra. Continue Reading President Trump Sends Four FTC Nominees to Senate for Approval

Several consumer actions affecting the retail industry have made headlines since the New Year.

FTC Issues Multi-Level Marketing Guidance

On January 4, 2018, the FTC issued updated business guidance to multi-level marketers (“MLMs”) to assist organizations in understanding and complying with the law. The FAQ-style guidelines address how core consumer protection principles apply with equal force to MLMs’ interactions with its own current and prospective participants, especially with regard to the compensation structures that MLMs are famous for. The FTC highlights several distinct MLM practices, explaining how each related to the FTC’s regulatory power and focus, and provides advice on how MLMs could best avoid running afoul of the law. Continue Reading Consumer Protection in Retail: Roundup

On January 8, 2018, the FTC announced an agreement with electronic toy manufacturer, VTech Electronics Limited and its U.S. subsidiary, settling charges that VTech violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting personal information from hundreds of thousands of children without providing direct notice or obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected. Under the agreement, VTech will (1) pay a $650,000 civil penalty; (2) implement a comprehensive data security program, subject to independent audits for 20 years; and (3) comply with COPPA. This is the FTC’s first COPPA case involving connected toys and the Internet of Things.

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

Department Stores Settle False Discount Claims

Ann Taylor and its parent company, Ann Inc., have entered into settlements amounting to approximately $6.1 million in two unrelated cases alleging false discounts. Ann Inc. settled allegations that it offered misleading “discounts” on clothes sold through its Ann Taylor Factory and LOFT stores. According to the complaint, the stores claimed to sell goods “marked down” from prices that never actually applied to the goods in question.

The Neiman Marcus Group LLC also has reportedly reached a settlement over similar claims; details of this settlement currently are not available to the public. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

Weight-Loss Drug Maker Settles Claims and Sheds $3.7 Million

Makers of BioTherapex and NeuroPlus agreed to refrain from engaging in numerous business practices, including making marketing claims that are not substantiated by scientific evidence. Specifically, they are banned from making any of the seven “gut check” weight-loss claims that the FTC has warned are always false for over-the-counter dietary supplements, like BioTherapex. Additionally, they are banned from making unsubstantiated or false claims about the benefits of NeuroPlus in protecting against Alzheimer’s and dementia. Defendants are also ordered to pay $3.7 million, which will be suspended upon payment of $800,000. Continue Reading Consumer Protection in Retail: Weekly Roundup