Considering selling health products online? If so, you need to think long and hard about how you market the products and, specifically, the claims you make in relation to the benefits consumers will gain from the products. Get it wrong, and you may end up like Wellness Support Network, Inc., a company just hit with a $2.2 million judgment for making false and deceptive claims regarding their diabetes products.
Wellness Support Network, Inc. created and sold Diabetic Packs and Insulin Resistance Packs online. Testimony suggested the two products contained identical mixes of vitamins, minerals and plant herbs. The company advertised the products with phrases like “Diabetes Breakthrough” and “clinically proven natural solution to diabetes with a 90% success rate.” The company went on to claim:
“A recent independent clinical trial was done on these herbal ingredients from this amazing product. This study was done on type 2 diabetics (mildly insulin dependent) and reported an average drop of blood glucose levels of 31.9% and average weight loss of 4.8 pounds in just 30 days.”
The problem? The court found there was no such study. The company argued that while there had been no study done on their product, there had been studies performed on certain ingredients in the products. The court rejected this argument as not equating to the product performing as claimed in the advertising. Judge Joseph C. Spero ruled against the company and ordered it to pay $2,198,612.12 to the Federal Trade Commission for false and deceptive advertising practices. [Read opinion here.]
The Health Product Claim Problem
Companies make rather outrageous claims when advertising health products online. You know it, and I know it. The term “snake oil” comes to mind, but what if you intend to sell a health product you believe legitimate? Well, there are a few standards you must keep in mind.
The Federal Trade Commission [“FTC”] enforces consumer laws prohibiting deceptive acts and practices in the online and offline commerce. The Agency performs this function by investigating complaints against companies that promise one thing in their advertising, but deliver much less with their products.
Let’s look at a non-health product for an example of how this approach might work. Skechers makes shoes. In 2011, the company put out a series of shoes known as “shape-ups”. The shoes had a rounded sole. The company claimed directly and indirectly that the rounded shape forced one’s leg muscles to work more than a traditional shoe and thus tones the leg muscles. Skechers even produced a Super Bowl commercial with Kim Kardashian for the product.
The claims were laughable, and the FTC soon investigated. When it was found Skechers had no objective, verifiable evidence to back its claims, the company quickly settled with the FTC and agreed to issue a few refunds. How “few”? 40 million dollars worth!
The lesson? You must have verifiable, objective evidence backing the claims you make for health products. In most cases, studies performed by independent groups are necessary.
You decide to “prove” your weight loss health product in a personalized “before and after” scenario. You take a young lady who weighs 120 pounds and looks great. You have her stop exercising for a week. She is told to eat a lot of salt and sugar. This combination causes her to break out with acne and inflate like a blimp with water retention until she weighs 135 pounds. You take a picture of her frowning and looking dour. You have her “before” profile. Now you just need her “after” profile to show how effective your product is when it comes to, in this case, causing weight loss.
Your model starts taking the magic herbal pill you’ve come up with for weight loss. Of course, she also restricts her diet to vegetables and water while working out 8 hours a day. The acne evaporates. The bloating disappears. She drops 12 pounds in 5 days. Sure, 11 pounds of it is water, but who will know?
Let’s get her ready for your advertising campaign. First stop is the local tanning business for a spray tan. Next, you need a professional photography studio where the model can be made to look her absolute best. Professionally shot portfolio in hand, you have a perfect set of “after” photos that “prove” your product is effective.
Is this going to pass FTC muster? Not a chance. Why? You fixed the process to maximize the weight loss in a manner that most customers will never be able to repeat. Study after study shows typical weight loss should be in the 1 to 3 pounds range a week, not 12 pounds in 5 days.
At a minimum, you are going to need to include a disclaimer indicating the results are not typical and detail the fact most people will lose 1 to 3 pounds a week. This disclaimer must be published with the product, not on the bottom of the website or in the terms and conditions.
Health Companies All Make Wild Claims
If there is one thing lawyers get tired of hearing, it is a client who justifies their actions by declaring that one of their competitors did the same thing. So what? If O.J. Simpson “allegedly” killed his wife, does that mean you can as well?
If the FTC files suit against your company, the fact someone else makes similar claims is not relevant. At best, the FTC might investigate that other business, but the Agency will not stop the enforcement action against you and your company. The fact another website or company does something is not a viable legal defense, so stop relying on any such justification for your actions!
The FTC takes health product claims very seriously. Entering this market can be very profitable, but businesses need to make sure the claims being made pass muster. Don’t become Skechers or Wellness Support Network, Inc.
Richard A. Chapo, Esq.