On January 7, 2014, the Federal Trade Commission announced “Operation Failed Resolution”, targeting false and deceptive claims made by marketers of weight loss products.  As part of this initiative, the FTC issued updated guidance for use by the media to help them spot phony weight-loss claims when screening ads for publication.  Along with the release of this media guidance, the FTC also announced the settlement of four enforcement actions against companies marketing foods, cosmetics or dietary supplements.  In connection with these weight-loss and similar cases, there appears to be disagreement among the Commissioners as to a substantiation rule that would require two “randomized controlled trials” to substantiate health and disease-related claims.

• Sensa

The FTC filed a complaint against Sensa for marketing its product as a food that you could “sprinkle on [your food] to take the weight off.”  Sensa represented that clinical studies supported the weight losses claimed.  However, according to the FTC, the company did not have the science to back up these claims.  Alleged deficiencies in the clinical studies include lack of blinding, the lack of a placebo control, failure to account for subjects that do not complete the study, and failure to monitor the subjects’ diet and exercise (weights were self-reported).  In addition, Sensa allegedly failed to disclose that its consumer endorsers had been offered compensation in exchange for their endorsement.  According to the complaint, sales of Sensa in the United States totaled nearly $364 million for the period from 2008-2012.  Sensa agreed to pay 26.5 million dollars into a fund to be used for consumer redress.

• L’Occitane

The FTC alleged that L’Occitane marketed certain skin cream products as “cellulite fighters” with claims that they “visibly reduce the appearance of cellulite” and “trim 1.3 inches in just 4 weeks” off thighs.  L’Occitane claimed that it had clinical evidence to support these claims.  However, the FTC alleged that the clinical evidence failed to substantiate the claims.  According to the FTC, the evidence relied on consisted primarily of results from a single unblended, uncontrolled clinical trial and L’Occitane exaggerated the results of the trial.  According to the FTC’s complaint, the average reported reduction in thigh circumference was less than a quarter of an inch, and only one participant (out of fifty) reportedly achieved a reduction of 1.3 inches.

L’Occitane agreed to pay $450,000 pursuant to the FTC settlement into a fund to be used for consumer redress.

• HCG Diet Direct

The third settlement announced involved HCG’s Diet Direct product.  Allegedly, the company marketed Diet Direct as a  homeopathic weight-loss product.  Diet Direct purportedly contained human chorionic gonadotropin; and HCG claimed that consumers could lose as much as a pound a day merely by putting drops under the tongue before meals.  The FTC alleged that the weight loss claims touting Diet Direct were either false or unsubstantiated.  Additionally, the FTC alleged that HCG failed to disclose that certain of the people providing testimonials in Diet Direct ads were compensated for their endorsements or were relatives of company representatives.

• LeanSpa, LLC

The FTC’s fourth settlement involves LeanSpa, LLC, and other related companies.  LeanSpa allegedly deceptively promoted acai berry and “colon cleanse” weight-loss supplements marketed under various brand names through fake news websites.  According to the FTC, among other allegedly deceptive practices, the marketers used domain names that appeared to be objective news or health websites (e.g., “channel8health.com”) and aired reports that were falsely represented to have aired on major broadcast and cable networks.  The reports were authored by purported testers of the LeanSpa products who reported dramatic and positive results.

The FTC reached a settlement pursuant to which, in addition to a variety of injunctive relief, the respondents surrendered assets worth approximately $7 million.

Updated guidance for media outlets on spotting bogus weight-loss claims in advertising

As part of its initiative, the FTC also issued an updated guidance for media to recognize bogus weight loss claims, “Gut Check.”  This guidance instructs media outlets on how to screen advertisements for facially deceptive weight loss claims, so that they will refuse to publish or to air deceptive ads.  Although the FTC has the authority to sue media outlets for running deceptive ads, statements made at the FTC’s press conference announcing this guidance indicate that the FTC does not intend to pursue action against media outlets.  Instead, the guidance appears designed to encourage the media’s voluntary cooperation.  The updated guidance includes tips on testimonials and an online tutorial.  It also identifies seven representations believed to be inherently deceptive and the media should avoid airing.  These “Gut Check” claims are claims that a product:

1. causes weight loss of two pounds or more a week for a month or more without diet or exercise;
2. causes substantial weight loss no matter what or how much the consumer eats;
3. causes permanent weight loss even after the consumer stops using the product;
4. blocks the absorption of fat or calories to enable consumers to lose substantial weight;
5. safely enables consumers to lose more than three pounds a week for more than four weeks;
6. causes substantial weight loss for all users; and
7. causes substantial weight loss by wearing a product on the body or rubbing it into the skin.

As part of this campaign, the FTC will send guidance letters to 75 media outlets to assist them in recognizing bogus weight loss claims.

Commissioners question the “standard” requirements for two randomized clinical trials

On the same day that the FTC announced the settlements in the weight loss cases, it also announced a settlement against GeneLink concerning the advertising of a customized dietary supplements to treat diseases.

The weight-loss and Genelink settlements define “competent and reliable evidence” for the relevant products as requiring two well-controlled human clinical studies (randomized controlled trials or RCT’s).  However, there appears to be disagreement within the Commission about whether this high standard is justified under all circumstances.  Notably, Commissioners Ohlhausen and Wright issued separate statements in which they, among other things, raise questions regarding the requirement for two RCT’s to satisfy the standard of “competent and reliable scientific evidence” for other than weight loss claims.  Commissioner Wright states that “t]he optimal amount and type of evidence to substantiate a future claim will vary from case to case,” and urges the Commission to consider whether this requirement “strikes the right balance between deterring deceptive advertising and preserving the consumers the benefits of truthful claims. Commissioner Ohlhausen similarly expresses concern that the requirement of 2 RCTs has become a “standard requirement for health-and disease-related claims for a wide array of products,” cautioning that “[a]dopting a one-size-fits-all approach to substantiation by imposing such rigorous and possibly costly requirements for …a broad category of health-and disease-related claims may, in many instances, prevent useful information from reaching consumers in the marketplace and ultimately make consumers worse off.”  She advocates a carful application of the factors enunciated Pfizer, Inc., 81 F.T.C. 23 (1972), rather than requiring two RCTs without consideration of the particular circumstances in the case at issue.