Hunton Retail Law Resource

Nearly 700 companies (670 to be exact) are recipients of a letter from the Federal Trade Commission, putting the companies on formal notice that failing to have proper substantiation for health claims (the Substantiation Notice) or engaging in misleading use of testimonials or endorsements (the Endorsement Notice) could result in civil penalties.

Recipients of the FTC’s letter come from every corner of the economy: the FTC mailed letters to manufacturers of beauty products, food and drink companies, retailers, and everyone in between. By putting these companies “on notice” that the identified practices violate the FTC Act, the FTC is empowered to impose civil penalties upon recipients who engage in violative conduct of up to $50,120 per violation under 15 U.S.C. § 45(m)(1)(B).

As we reported here, the FTC first issued the Endorsement Notice in 2021, but the Substantiation Notice is a new publication. The full Notice is certainly worth a read, but some of the most notable “unfair or deceptive acts or practices” that will create liability include:

• Making “an objective product claim” without “competent and reliable evidence” in support of the claim.
• Making a claim that a product treats a serious disease without “at least one human clinical trial” that “(1) is randomized, (2) is well controlled, (3) is double-blinded . . . (4) is conducted by persons qualified by training and experience to conduct such studies, (5) measures disease end points or validated surrogate markers, and (6) yields statistically significant results.”
• Making a claim that a product is “scientifically or clinically proven” unless the advertiser has “evidence sufficient to satisfy the relevant scientific community of the claim’s truth."
• Misrepresenting the level or type of substantiation for a claim.

This latest FTC initiative comes on the heels of prior use of Notices of Penalty Offenses against money-making ventures, for-profit educational institutions, automobile rentals, bait-and-switch sales practices, business opportunities, and more.

Things you can do now?

• Check the list to see if your company was sent a Notice;
• if you received a Notice, make sure the appropriate teams are, and continue to be, aware of it;
• retain the document in an easily identifiable location;
• reacquaint yourself with the FTC’s substantiation requirements for health products, and the endorsement and testimonial guides; and
• contact us with questions.