Hunton Retail Law Resource

This past week, several consumer actions made headlines that affect the retail industry.

Advertising Agency Pays $2 Million to FTC and State of Maine to Settle Unsubstantiated Weight-Loss Claim

The FTC and the State of Maine have settled a case against ad agency Marketing Architects, Inc. (“MAI”) for MAI’s role in creating and disseminating deceptive radio ads replete with unsubstantiated claims for weight-loss products. MAI had been retained to create the ads by dietary supplement supplier, Direct Alternatives, Inc., whom the FTC and Maine had sued in 2016. Under the agreement with MAI, the ad agency is banned from making any of the seven “gut check” weight-loss claims that the FTC has publicly advised are always false. MAI also must have competent and reliable science to support weight-loss claims and must not misrepresent facts relating to return and cancellation policies of the products marketed. Finally, the order imposes a $2 million judgment on MAI, which may be used to provide refunds to consumers harmed by the conduct.

Bumble Bee Foods Agrees to Change Labeling on Canned Salmon to Settle Class Action Claims

Bumble Bee Foods LLC has settled proposed class action claims brought in a lawsuit in California federal court. Plaintiffs had alleged that Bumble Bee misrepresented that its canned salmon products, Bumble Bee Premium Select Medium Red Smoke Salmon Filets in Oil, were wild-caught and smoked, rather than farmed and made with liquid smoke flavor. Under the terms of the settlement agreement, Bumble Bee has agreed to repackage the product with more accurate labeling and pay between $30,000 and $85,000 for fees and costs.

Pharmavite Declines to Pull Bio Absorption Claims; Advertiser Referred to the FTC

The NAD referred Pharmavite, LLC, to the FTC after the advertiser declined to follow the NAD’s recommendation to discontinue claims that Nature Made Omega-3 Xtra Blend Dietary Supplements have “Nearly 4x Better Absorption” than standard fish oil concentrate. While there was evidence that the supplement is manufactured with a self-microemulsifying drug delivery system that enhances absorption, there was disagreement over whether the absorption differential could be reliably extrapolated from the study on which the assertion was based. The NAD ultimately concluded that the evidence was not a good fit for the claim and recommended that it be discontinued. Pharmavite announced its decision not to comply with the NAD’s recommendation.

NAD Recommends Charter Communications Discontinue Ads About Satellite TV; Charter Will Appeal

DirecTV, a satellite service provider, challenged claims made about satellite television by Charter Communications before the NAD. In one version of Charter’s commercial, the voiceover and text state that “TV that cuts out in the rain is evil,” and in another, a Grim Reaper character says that his family’s satellite dish “went out in the rain, again.” To support Charter’s claims that satellite customers do experience rain interruptions, Charter provided the NAD with customer survey evidence acknowledging rates of lost service due to rain. The NAD found that the responses did not support that premise that satellite television is “highly unreliable,” but did support the premise that satellite television users experience occasional outages due to inclement weather. The NAD therefore recommended that the claim be removed from the context “TV that cuts out in the rain is evil,” and also that the word “again” be discontinued in the commercial. Charter plans to appeal to the National Advertising Review Board.

NAD Reviews “BPA Free and Food Safe” Claims

Following a challenge by Van Ness Plastic Molding Company, Inc., the NAD reviewed advertising claims made by Olivet International, Inc., a manufacturer of plastic pet food storage containers. Olivet agreed to permanently discontinue claims that its products are made of recycled material and are “BPA free and food safe.” The NAD also reviewed modified versions of these claims, and concluded that Olivet’s claim that its products contain “a minimum of 25% recycled material” was reasonably supported by the evidence. The NAD also found that Olivet had a reasonable basis for its claim that its products are “food safe.” In conducting its review, the NAD reviewed information from Olivet regarding its recycling process and a “no objection” letter from the Food and Drug Administration.

Shenzhen ZhiYi Technology Agrees to Discontinue Claims for iLife A4s Robotic Vacuum

Shenzhen ZhiYi Technology Co., Ltd. has agreed to permanently discontinue certain claims about its iLife A4s robotic vacuum cleaner following a NAD challenge from iRobot Corporation. The NAD found that Shenzhen had not provided sufficient testing showing that its vacuum reduces allergens. The company will discontinue claims that the A4s contains a high-efficiency particulate air “HEPA” filter, uses “fade-free” technology, and cleans better than other robot vacuums overall. Shenzhen also will modify a claim that the A4s has 50 percent more suction, clarifying that the basis of comparison was an earlier model of the vacuum cleaner.

UltraMax Health to Discontinue Memory Support Claims

UltraMax Health, Inc., has agreed to permanently discontinue claims that its Max Synapse dietary supplements help support memory, energy levels and brain performance, and stated that the product is no longer being sold.