The Federal Trade Commission is really watching the direct marketing community these days. First, there’s the announcement due any day now about establishing a national do-not-call list. Also, the FTC announced a $3 million settlement last week with DRTV marketer Blue Stuff Inc., maker of a topical pain reliever. At one time, Blue Stuff was the No. 1 infomercial and sold more than $83 million in merchandise. The FTC said ads for the emu-oil-based gel, priced at $59.95 for eight ounces, claimed without substantiation that it could relieve pain in five minutes and be used to treat medical problems ranging from carpal tunnel syndrome to acne. And we wonder why the industry has such a negative image?
Then there was the huge settlement two weeks ago with Miss Cleo’s Psychic Readers Network. Though Access Resource Services, which operated the network, did not admit to any wrongdoing, it agreed to pay $5 million and to forgive $500 million in outstanding bills. While I don’t understand why someone would call a hotline for psychic advice in the first place, it’s good that the FTC cracked down on a practice that went beyond exploiting people’s gullibility.
Speaking of gullible, the FTC also had a workshop last week concerning misleading diet advertising. FTC chairman Timothy Muris is quietly pressuring cable channels, newspapers and magazines to reject false and misleading diet and health ads, The Wall Street Journal reported. Basically, Muris said that if media organizations don’t start policing themselves, the FTC could sue them in an attempt to force action. Workshop speakers included officials from Jenny Craig, Slim Fast Foods, the Magazine Publishers of America and the Council for Responsible Nutrition. The FTC also said it is developing “a short list of claims that are almost certainly false” that media companies should refuse to allow in any ads.
Though it’s good that the FTC wants to stop advertisers from making false claims, the commissioners had better head over to the magazine and book racks, where the headlines and titles hype everything from “Lose a Pound a Day” to “Bigger Arms in 15 Minutes.” Media outlets are likely to respond with First Amendment concerns, legal expert Floyd Abrams told the Journal. Diet or no diet, it’s clear the FTC has its work cut out here. Since 1990, the agency has filed 93 court cases challenging weight-loss claims.