Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Wart removal, weight loss product marketers agree to halt FTC deception claims, (Dec 29, 2014)

By Greg Hammond, J.D.

Marketers of various wart and mole removing, anti-aging, and weight loss products have settled FTC charges that the companies violated the FTC Act through false or unsubstantiated deceptive claims regarding their products. The companies are consequently barred from misleading consumers regarding the efficacy of their products and about whether their claims are supported by scientific evidence (FTC v. Solace International, Inc., File No. 132 3117, Case No. 3:14-cv-00638-MMD-WGC) and (FTC v. DERMAdoctor, Inc., File No. 132 3245).

Solace International, Inc. and Bioscience Research Institute LLC market and distribute an over-the-counter drug for mole, wart, and skin tag removal, as well as a dietary supplement for weight loss. Similarly, DERMAdoctor, Inc. is a Missouri corporation that markets, advertises, and sells cosmetics to consumers, including lotions that allegedly have anti-aging effects and provide slimming and toning benefits.

The FTC filed suit against these companies, alleging that they violated the FTC Act by making false or deceptive claims about their products without credible scientific evidence. Specifically, the FTC filed a five-count complaint against Solace for (1) false or unsubstantiated efficacy and safety claims; (2) failure to disclose material connection with consumer endorsers; (3) failure to disclose material connection with affiliates; (4) a false claim that affiliate site content is independent; and (5) false establishment claims. The Commission also filed a five-count complaint against DERMAdoctor for (1) false or unsubstantiated mechanism claims for anti-aging lotions; (2) false or unsubstantiated efficacy claims for anti-aging lotions; (3) false establishment claims for anti-aging lotions; (4) false or unsubstantiated efficacy claims for slimming lotion; and (5) false establishment claims for slimming lotion.

“These companies made outrageous claims that their products could provide a range of benefits—from removing warts to decreasing the appearance of cellulite to providing substantial weight loss,” stated FTC Bureau of Consumer Protection Director Jessica Rich. “The common thread for all of these claims was the fundamental lack of scientific evidence. Consumers deserve better.”

Solace has agreed to judgment of over $11 million. The monetary judgment, however, will be suspended after the company pays just over $400,000 in cash and the proceeds from the sale of four properties to the Commission. In addition, Solace is prohibited from making similar representations in the future without credible scientific evidence, including two “well-done human clinical studies.”

Similarly, DERMAdoctor has agreed to judgment in the amount of nearly $850,000. The monetary judgment will be suspended, however, upon the payment to the Commission of only $12,675. DERMAdoctor will also be prohibited from making anti-aging and cellulite-reduction claims, without competent and reliable scientific evidence, including at least two “randomized, double-blind, placebo-controlled human clinical studies.”

Attorneys: Linda A. Goldstein (Manatt, Phelps & Phillips, LLP) for Solace International, Inc. David A. Zetoony (Bryan Cave LLP), for DERMAdoctor, Inc. Janet M. Evans and Christine L. DeLorme, FTC.

Companies: Solace International, Inc.; Bioscience Research Institute LLC; DERMAdoctor, Inc.

News: Advertising ConsumerProtection FederalTradeCommissionNews