Hunton Retail Law Resource

On March 6, 2020, the FTC announced a settlement with Teami, LLC and its owners over allegations that the company falsely promoted its Teami brand tea products as capable of curing serious health conditions and causing significant weight loss, supported by endorsements by well-known social media influencers who did not adequately disclose that they were being paid to promote their products. According to the FTC, after receiving a warning letter from the FTC in 2018, Teami implemented a social media policy requiring informative hashtags, but failed to enforce it, resulting in less-than-clear posts. The FTC’s settlement requires Teami to substantiate, with competent and reliable scientific evidence (i.e., random, placebo controlled, double-blinded human clinical testing), any claims that their products treat particular diseases or cause appreciable weight loss. The order also requires clear and conspicuous disclosures of any unexpected material connection and imposes endorser monitoring requirements. Finally, the order imposes a $15.2 million judgment—the total sales of the challenged products—which will be suspended upon payment of $1 million, based on the defendants’ inability to pay the full judgment.

In addition to this action, the FTC sent warning letters to the 10 social media influencers cited in the FTC’s complaint.