Can I Make This Claim? FTC Actions Urge CautionThe Federal Trade Commission recently announced settlements with Fitness Quest Inc. and Home Shopping Network Inc., two prominent marketers of health products and exercise equipment. While these settlements highlight the agency's continued concern with health, weight-loss and exercise-related claims, they also reinforce a marketer's obligation to possess adequate substantiation for performance claims and the pitfalls that can arise in using testimonials.
The Fitness Quest matter involved claims in advertising for various exercise gliders and abdominal devices prominently marketed through infomercials. The FTC alleged Fitness Quest made unsubstantiated claims that the exercise equipment would allow users to burn up to a specific amount of calories and that the abdominal devices were twice as effective as regular sit-ups. In addition, the FTC alleged that advertisements made unsubstantiated weight-loss and weight-maintenance claims in promoting the products. Many of the weight-loss related claims were purportedly based on the experience of equipment owners, whose testimonials were prominently included in the promotional materials.
The HSN case involved allegedly unsubstantiated claims for a variety of health-related products, including anti-acne products, a skin-care fading fluid, dietary supplement weight-loss products and a dietary supplement hormonal imbalance product. The anti-acne product claimed to produce clear skin in a short period of time, the fading fluid was touted to eliminate skin pigment discoloration and the use of the weight-loss products was said to achieve significant weight loss. Like Fitness Quest, Home Shopping Network prominently used testimonials from satisfied users of the products who had purportedly achieved impressive results.
Competent, reliable tests or studies required. In settling the FTC matters, both companies agreed to refrain from making curative, treatment or preventative claims, or claims that the products affected the bodies structure or function, without first possessing competent and reliable scientific substantiation. Substantiation of this type must be in the form of reliable tests or studies conducted and evaluated in an objective manner by professionals qualified in the relevant area. The professionals are required to use generally accepted procedures to yield accurate results. As such, if a marketer claims that use of an exercise product will burn twice as many calories as walking, the claim must be supported by competent, reliable and objective substantiation in the form of tests or studies.
The standards expressed in the consent orders apply to virtually all marketers of products and services, not just the companies involved in the enforcement actions. Regulators have shown that they will continue aggressively to challenge performance claims made in advertising for exercise equipment. This is true not just for weight-loss claims but for performance claims. Marketers whose advertisements make objective performance claims must have competent and reliable substantiation prior to making the claim. Moreover, in the case of HSN which agreed to pay a $1.1 million civil penalty for violating a prior consent order, those who have entered into consent orders will be closely monitored for compliance and may be heavily penalized for violation of the order.
Testimonial pitfalls. Marketers frequently rely on testimonials to promote a product's attributes and to demonstrate the results that can be achieved. Some marketers mistakenly believe that testimonials can provide required support for performance or success claims or that claims made in a testimonial will not be treated as performance claims.
Regulators take the position that testimonials convey the impression to consumers that the results achieved by the endorser are typical of all users. If Ms. Smith says she lost 70 pounds in three months by using a particular weight-loss product, so will the typical user. The FTC also takes the position that by itself, claims made in a testimonial constitute a performance claim triggering a substantiation obligation. As with all advertising, the overall impression, not just the expressed claims, is what counts.
Nearly 20 years ago, the FTC issued an advertising guideline on the use of consumer testimonials. Some highlights of the guideline include: The endorsement must reflect the honest opinions, beliefs, and experience of the endorser; and they cannot include any representations that would be deceptive or could not be substantiated if made directly by the advertiser. Absent an appropriate disclaimer, a consumer endorsement expressing the individual's experience may nevertheless be interpreted as implying that the consumer's experience is typical of what consumers will generally achieve. These guidelines continue to apply today.
The recent settlements highlight that a claim expressed in a testimonial will be attributed to the marketer. To avoid making unsubstantiated performance claims using testimonials, the marketer should incorporate a prominent disclosure in the proximity of the endorsement that the endorser's experience is not typical, if that is the case. The FTC has set forth various statements that it believes satisfy the disclosure requirement, including "You should not expect to experience these results," "This result is not typical. You may not do as well" or simply "Results not typical."
Marketers are well advised to use these types of disclaimers when including testimonials where the marketer does not intend to make a performance claim or one in which she may not be able to substantiate. Moreover, given the FTC's continued scrutiny of weight-loss and exercise products (including actions against major marketers of such products), all marketers who promote such products should have their ads carefully reviewed by competent advertising counsel so that the ads can be not only enticing, but in compliance.
Andrew B. Lustigman is a partner in The Lustigman Firm, New York, a law firm specializing in direct marketing law.