FTC Defense Lawyer - Dietary Supplement Marketing Compliance for Affiliate Advertisers

[Richard B. Newman]

Dietary supplements are regulated by Federal Trade Commission and the Food and Drug Administration. What follows is intended to reflect a handful of recurring issues contained in recent FTC Civil Investigative Demands and enforcement actions.

1. Advertisements must not be misleading or deceptive.

• Sections 5 and 12 of the FTC Act prohibit false and deceptive advertising. All claims, both express and implied, must be truthful and non-misleading;
  
  
• All claims and interpretations must be substantiated. Marketers most possess PRE-dissemination substantiation for all objective product efficacy claims;
  
  
• A deceptive ad is one that contains a misrepresentation or omission that is likely to mislead consumers acting reasonably under the circumstances;

• When identifying claims, advertisers should not focus just on individual phrases or statements. Consider the overall “net impression” conveyed by all elements of the ad, including the text, product name, and depictions. If an ad would be misleading without certain qualifying information, that information must be properly disclosed;
  
  
• Advertising is deceptive if it misleads consumers and affects consumers’ behavior or decisions about a product/service (e.g., cost, terms, restrictions or availability);
  
  
• Disclosures must be clear, conspicuous and prominent. See “Dot Com Disclosure” Guidance. Disclosures are a critical component of dietary supplement advertising campaigns;
  
  
• If a disclosure provides information that contradicts a material claim, the disclosure will not be sufficient to prevent the ad from being deceptive. In that situation, the claim itself must be modified;
  
  
• Do not misrepresent, expressly or by implication, that ad copy is an objective news report, blog or article;
  
  
• Health claims are held to a higher standard. When evaluating claims about the efficacy and safety of foods, dietary supplements and drugs, the FTC has typically applied a substantiation standard of competent and reliable scientific evidence; and
  
  
• State Attorneys’ General actively police deceptive advertising practices.

2. Claim substantiation and “competent and reliable scientific evidence.”

• Must possess “competent and reliable scientific evidence” to substantiate representations in ad copy;
  
  
• Cannot expressly or impliedly misrepresent that independent tests demonstrate the effectiveness of product;
  
  
• Cannot misrepresent any material aspect of the performance, efficacy or characteristics of a product;
  
  
• Must possess appropriate evidence, before disseminating advertisements, that substantiate express and implied claims;
  
  
• Must disclose if no data or inconsistent data;
  
  
• If photos reflect a claim of what the products will deliver, this can be considered a representation as to the efficacy of the product;
  
  
• Establishment claims characterizing the amount of science possessed are scrutinized closely. Advertisers must actually possess such substantiation (e.g.; “studies show that ingredient X has Y effect”). Do not promise or guarantee specific results;
  
  
• Have double-blind, randomized and well-controlled human clinical studies, conducted by different researchers, independently of each other, that conform to acceptable designs and protocols whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate representations;
  
  
• If studies unclear, obtain a written opinion of an expert in the field; and
  
  
• Maintain file of scientific literature that support each of the claims made.

3. Some important factors when assessing scientific literature.

• Scientific literature should be peer-reviewed, well-controlled and based upon the final product formulation, not just one or more ingredients. Claims based on study that tested only one ingredient should clearly and conspicuously state so and the advertisers must be able to demonstrate that the presence of additional ingredients in the product does not change the effectiveness of individual ingredients;
  
  
• Never solely rely upon abstracts or research summaries;
  
  
• Carefully evaluate formulation, dose, dosage form, route of administration, test subjects, length/frequency of exposure, study population and results;
  
  
• Results must be statistically and clinically significant;
  
  
• Longer-term studies are better than short-term studies;
  
  
• The demographic targeted by the campaign should reflect the test population in the scientific literature;
  
  
• One solid study is better than multiple, less reliable ones. Consider size, duration and protocol;
  
  
• Foreign research may suffice in certain circumstances, and consumers must be clearly and conspicuously advised about that population-related factors could affect results, such as differences in diet and general health;
  
  
• If a strong body of evidence contradicts other evidence supporting efficacy, even a qualified claim may be considered deceptive. Disclose if there is no data or inconsistent data; and
  
  
• Animal studies are insufficient.

4. Testimonials and endorsements.

• Must be truthful, verified and represent the experience that a typical consumer can expect with the product;
  
  
• Must be substantiated as though they were made by the marketer itself;
  
  
• Statements like “results not typical” or “individual results may vary” are not enough. Advertisers must either possess adequate proof to back up the claim that the results are typical, or clearly and conspicuously disclose the generally expected performance in the circumstances shown in the advertisement;
  
  
• Material connections between the endorser and the advertiser must be clearly and conspicuously disclosed so that consumers can decide how much weight to give the product review (e.g., close family relationship, employment relationship, recipient of free product/service, payment, opportunity to win a prize, etc.);
  
  
• The product must have been used by the person providing the testimonial, and it must be documented with a testimonial affidavit or release form;
  
  
• Testimonials that include extreme results;
  
  
• Ensure that all of the facts relating to the testimonials and accurate and disclosed;
  
  
• The rules apply equally to all type of media and forms of endorsement;
  
  
• Beginning a tweet with “Ad:” or “#ad” may be considered an effective disclosure. The FTC also suggests using the terms “Sponsored,” “Promotion,” or “Paid ad” to disclose a sponsorship on social media;
  
  
• Guides Concerning the Use of Endorsements and Testimonials in Advertising address the application of Section 5 of the FTC Act to the use of endorsements and testimonials in advertising.

5. Before and after photos/videos.

• Considered endorsements;
  
  
• Must be truthful and non-misleading;
  
  
• Must depict actual results;
  
  
• Must be typical of what other consumers can expect to achieve from using the product, or clearly and conspicuously disclose the generally expect performance results;
  
  
• Testimonial claims of atypical results presented as typical and ordinary will be considered deceptive;
  
  
• Using images of people other than verified users of a product is considered false and deceptive;
  
  
• Do not cherry-pick best cases or fabricate endorsements;
  
  
• Properly disclose that diet and exercise are a necessary component of any weight loss plan;
  
  
• Weight loss of more than a pound a week over a long period is unusual. As a rule, endorsements from people who claim to have lost an average of 2 pounds or more per week for a month or more - or endorsements from people who say they lost more than 15 pounds overall - should be accompanied by a disclosure of how much weight consumers typically can expect to lose; and
  
  
• Properly disclose whether the reported result may be attributable to other factors, such as diet, exercise or lifestyle changes.

6. Automatic subscription renewals and continuity plans.

• At the federal level, the Restore Online Shoppers’ Confidence Act regulates online trial offers, automatic subscription renewals and continuity plans;
  
  
• Clearly, conspicuously and accurately disclose all material terms prior to the consumer entering any billing information or completing an order (e.g., length of trial period, refund/cancellation policy, automatic renewal until cancellation, amount of charges, how the charges will appear, timing/manner of charges, shipping/handling charges, etc.);
  
  
• FREE is a trigger term. FREE means FREE. Caveat regarding representing a trial offer is FREE, when consumers are charged if they fail to cancel and return the product within a prescribed time. Also, a product is not FREE if consumers are responsible for S/H;
  
  
• Obtain express informed consent to material terms prior to charging the consumer, and provide a simple mechanism for the consumer to cancel recurring charges;
  
  
• Provide written acknowledgement to consumer that includes all material terms;
  
  
• If the offer includes a FREE trial, disclose up-front and in the acknowledgment how to cancel before any payment obligation is incurred;
  
  
• Provide a simple mechanism for consumers to stop recurring charges;
  
  
• Do not use high-pressure tactics in an attempt to retain a consumer that wishes to cancel. If a consumer expresses a desire that retention efforts cease, immediately cease such retention efforts;
  
  
• Provide payment reminders to consumers in advance of next scheduled payment; and
  
  
• Do not use pre-checked boxes.

7. Miscellaneous.

• Draft ad copy that accurately reflects scientific literature. Attempting to locate scientific literature after the campaign has begun is a recipe for disaster and a violation of the FTC’s claim substantiation requirements.
  
  
• Express or implied claims regarding media coverage are deceptive if not, in fact, true;
  
  
• Misleading claims of a “limited supply” or “limited time offer,” including countdown timers, are considered to create a “false sense of urgency” in violation of the FTC Act;
  
  
• “All natural” claims are considered deceptive if the product contains any artificial or synthetic substances;
  
  
• Obtain consumers’ express informed consent, following clear and conspicuous disclosure, regarding what information will be collected and how it will be used (first and third-party use), including the use of “partials;”
  
  
• Never utilize or permit the utilization of consumer information for an improper or illegitimate purpose, including a purpose for which a consumer has not consented to or does not reasonably anticipate;
  
  
• Ensure that all third-party contracts include appropriate restrictions, representations and warranties;
  
  
• Thoroughly vet marketing partners and implement compliance checklists before engaging in marketing campaigns;
  
  
• Periodically audit and discipline marketing partners. Maintain accurate records of such efforts; and
  
  
• Everyone in stream of commerce potentially liable for deceptive/unsubstantiated claims.

Prior to launching a dietary supplement marketing campaign, consult with a Federal Trade Commission compliance and defense lawyer that possesses industry-specific experience interpreting scientific literature, and Federal Trade Commission substantiation standards and policies.

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HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.