National Advertising Review Board

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

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

Federal Court OKs Large Warning Requirement for Cigar Products

A federal court has upheld forthcoming health warning requirements that will take up 30 percent of the principal panels of cigar product packages and 20 percent of cigar product advertisements. The court found that the textual warnings were “unambiguous and unlikely to be misinterpreted by consumers,” and that the cigar sellers retained sufficient space on their packaging and advertisements “in which to effectively communicate their desired message.” It also concluded that, under the Zauderer standard for commercial speech, the size, format and other design features of the warning statements were reasonably related to the government’s substantial interest in “providing accurate information about, and curing misperceptions regarding, the health consequences of cigar use.” The case is captioned Cigar Assoc. of Am. et al. v. FDA et al. No. 1:16-cv-1460 (D.D.C.). Continue Reading Consumer Protection in Retail: Weekly Roundup

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

Federal Court in New York Dismisses Diet Pepsi Case

A federal judge dismissed a complaint accusing Pepsi-Cola Co. of misrepresenting that its “diet” drinks help consumers lose weight. In the proposed class action, plaintiffs claimed that Diet Pepsi is made with no-calorie sweeteners, which allegedly contributes to weight gain and increased risk of metabolic disease, diabetes and cardiovascular disease. The judge rejected the plaintiffs’ studies, finding that the evidence indicated an association between the sweeteners and weight gain, but not causation. The judge also concluded that reasonable consumers understand that the “diet” label simply means low calorie. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

FTC Expands Agency’s Leadership Team with New Consumer Protection Director

Federal Trade Commission Chairman Joseph Simons announced the appointment of Andrew Smith as Director of the agency’s Bureau of Consumer Protection, beginning next week. Smith is Chair of the American Bar Association’s Consumer Financial Services Committee and a Fellow of the American College of Consumer Financial Services Lawyers. From 2001-2004, he served as Assistant to the Director of the Bureau of Consumer Protection and FACT Act Program Manager, leading implementation of the FACT Act rulemaking, proceedings and studies. The vote to install Smith was 3-2, with the FTC’s two democratic commissioners filing statements in opposition. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

FTC Swats Misleading Advertising Claims Just in Time for Mosquito Season

The FTC and makers of the “Aromaflage” line of products have agreed to settle charges that Mike & Momo, Inc., deceptively marketed its mosquito-repelling perfume sprays and scented candles. The company agreed to stop making unsubstantiated claims that its products repel disease-carrying mosquitos, work for 2.5 hours, and are as effective as 25 percent DEET. The FTC also alleged that Mike & Momo packed its Amazon storefront with five-star reviews written by the owners and close family members; under the proposed consent order Mike & Momo must disclose any “unexpected material connection” between the company and any endorsers. 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

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

FTC Seeks Public Comment on Sears’ Petition to Modify Prior Order

Sears Holding Management Corporation has requested that the FTC reopen and modify a 2009 Commission Order settling charges that Sears inadequately disclosed the scope of consumer data collected through the company’s software application. The initial FTC complaint alleged that Sears represented to consumers that its downloadable software application would track users’ “online browsing,” but in fact tracked nearly all of the users’ Internet behavior. Sears petitioned the FTC to modify the Order’s definition of “tracking system,” which the company contends is overbroad and impracticable. The FTC is seeking public comment on Sears’ petition, which it will receive until December 8, 2017. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

FTC Extends Comment Period for Paint Claims

On August 7, 2017, the FTC extended the public comment period related to four proposed settlements with paint companies. According to the original complaints from June 2017, Benjamin Moore, Imperial Paints, ICP Construction and YOLO Colorhouse deceptively claimed that their paint products were either emission-free or contained zero volatile organic compounds, including during and immediately after application.  Continue Reading Consumer Protection in Retail: Weekly Roundup

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

First Circuit Dismisses Deceptive Advertising Claims against Two Large Retailers

The First Circuit Court of Appeals has held that consumers who brought nearly identical deceptive pricing cases against two large retailers failed to prove that they had been injured. One suit alleged that one company falsely advertised “compare at” prices on sales tags; the other suit alleged that the other company deceptively set lower prices for its exclusive and private-label products and advertised them as discounted. In both cases, the plaintiffs alleged that the mere purchase of the item itself constituted injury. The First Circuit rejected this argument, observing that the consumers (1) had not alleged that the items were poorly made, (2) had received the benefits of their bargains, and (3) that a false sense of a product’s value does not constitute injury.   Continue Reading Consumer Protection in Retail: Weekly Roundup