The FTC on Super (un)natural product claims

In a recent post by Seena Gressin, Attorney, Division of Consumer & Business Education, we get a glimpse of the FTC’s view of “natural”

For lovers of word-association games: what words leap to mind when you think of “all natural” ingredients?

Did you pick “Dimethicone,” “Phenoxyethanol,” or “Polyethylene”? Perhaps “Butyloctyl alicylate,” “Polyquaternium-37,” or “Neopentyl Glycol Diethylhexanoate”? No? Well, not to worry — you haven’t lost the game. But five companies that tagged products that contained one or more of these ingredients as “all natural” or “100% natural” are now rethinking their strategy.

The FTC alleged the companies misrepresented their personal care products — including sunscreens, moisturizers, shampoos, conditioners, and shower gels — by describing them as “all natural” or “100% natural” when they contained one or more synthetic ingredients.

According to the FTC, the claims showed up in product names, such as “All Natural Hand and Body Lotion,” sold under the trade name ShiKai by Trans-India Products, Inc., of Santa Rosa, Calif., and “Coconut Shea All Natural Styling Elixir,” sold under the trade name EDEN BodyWorks by ABS Consumer Products, LLC, of Memphis, Tenn.

The FTC said the claims also showed up in product ads. For example, The Erickson Marketing Group Inc., of Arvada, Colo., which uses the trade name Rocky Mountain Sunscreen, and California Naturel, Inc., of Sausalito, Calif., both advertised their sunscreens as “all natural,” while Beyond Coastal, of Salt Lake City, touted its sunscreen as “100% natural.”

Four of the companies have agreed to proposed orders that would prohibit them from claiming that any product is 100% natural unless they have reliable evidence to back up the claim. The orders also would require them to have proof for any claims they make about the products’ environmental or health benefits. The Commission issued a complaint against the fifth company, California Naturel, seeking the same relief.

How can you avoid being burned by misleading “all natural” claims for sunscreen and other products? Take the claims with a non-synthetic grain of salt, check out the ingredients list on the package, and please visit our website for information about shopping for products that claim to have health or beauty benefits.

 

According to the FTC, each of the following companies made the all-natural claim in online ads:

  • Trans-India Products, Inc., doing business as ShiKai, based in Santa Rosa, California, markets “All Natural Hand and Body Lotion” and “All Natural Moisturizing Gel” both directly and through third-party websites including walgreens.com and vitacoast.com. The lotion contains Dimethicone, Ethyhexyl Glycerin, and Phenoxyethanol. The gel contains Phenoxyethanol.
  • Erickson Marketing Group, doing business as Rocky Mountain Sunscreen, based in Aravada, Colorado, uses its website to promote “all natural” products such as the “Natural Face Stick,” which contains Dimethicone, Polyethylene, and other synthetic ingredients.
  • ABS Consumer Products, LLC, doing business as EDEN BodyWorks, based in Memphis, Tennessee, markets haircare products on its own websites and at Walmart.com. It makes “all natural” claims for products including “Coconut Shea All Natural Styling Elixer” and “Jojoba Monoi All Natural Shampoo.” In reality, the products contain a range of synthetic ingredients such as Polyquaternium-37, Phenoxyethanol, Caprylyl Glycol, and Polyquaternium-7.
  • Beyond Coastal, based in Salt Lake City, Utah, uses its website to sell its “Natural Sunscreen SPF 30,” describing it as “100% natural.” However, it also contains Dimethicone.
  • California Naturel, Inc., located in Sausalito, California, sells supposedly “all natural sunscreen” on its website, though the product contains Dimethicone. The Commission has issued a complaint alleging that California Naturel has made deceptive “all natural” claims in violation of Sections 5 and 12 of the FTC Act.

The proposed consent orders bar the four settling respondents from misrepresenting the following when advertising, promoting, or selling a product: 1) whether the product is all natural or 100 percent natural; 2) the extent to which the product contains any natural or synthetic components; 3) the ingredients or composition of a product; and 4) the environmental or health benefits of a product.

The orders require the respondents to have and rely on competent and reliable evidence to support any product claims they make. Some claims require scientific evidence, which is defined as tests, analyses, research, or studies that have been conducted and evaluated objectively by qualified individuals using procedures generally accepted in the profession to yield accurate and reliable results.

More information can be found at the FTC website. https://www.consumer.ftc.gov/blog/super-unnatural-product-claims?utm_source=govdelivery

Do you use a product that claims to be all natural, but isn’t? Share with your fellow readers or contact us to take action.

 

KeyView Labs, Inc. and Brain Research Labs, LLC pay $1.4 to settle claims they deceived consumers

The marketers of a dietary supplement called Procera AVH will pay $1.4 million to settle claims brought by the Federal Trade Commission  that they deceived consumers with claims that the supplement was clinically proven to significantly improve memory, mood, and other cognitive functions.

Under the terms of the settlements, the companies  will pay $1 million to the FTC, and another $400,000 to satisfy a judgment in a case brought by local California law enforcement officials. They also will be barred from making similar deceptive claims in the future and from misrepresenting the existence, results, or conclusions of any scientific study.

According to the FTC’s complaint, the defendants marketed and sold Procera AVH as a “solution” to memory loss and cognitive decline, including as associated with aging. The defendants advertised the product using infomercials, direct mail flyers, newspapers, and the Internet.

Procera AVH typically cost $79 per bottle, or $119 for three bottles for consumers who signed up for the continuity purchase plan and agreed to get automatic refills.

Walden University and Laureate Education, Inc named in class action lawsuit over systematic prolonging of the thesis and dissertation process

Walden big

 

The dissertation and thesis processes lack institutional oversight and operate in complete disregard for Walden University’s own policies creating an endless process that drags on for quarter after quarter, year after year for students. This prolonged process causes students to spend more money on tuition than was represented to them by Walden University.

As alleged, the process for students to obtain a dissertation or thesis supervisory committee chair and member is extremely difficult. Even worse, retaining the committee chair and committee member throughout the entire process is an additional challenge.

The Complaint claims that most Walden University doctoral and master’s students experience a loss of a supervisory committee chair or member at least once – and usually many more times – during the course of their dissertation or thesis. Walden University’s failure to regulate the supervisory committee program thus unnecessarily prolongs students’ efforts to obtain their degrees, and results in students extending their enrollment in their respective dissertation or thesis course and paying additional tuition.

Walden University Complaint

Stipulation of Dismissal

NEW LAWSUIT (OCTOBER 2016) www.waldenuniversitylawsuit.com

ITT Educational Services sued over predatory lending practices

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against ITT Educational Services, Inc. (ITT) accusing it of predatory student lending. The complaint alleges that ITT exploited its students and pushed them into high-cost private student loans that were very likely to end in default.

ITT Educational Services, Inc. is an Indiana-based for-profit provider of post-secondary technical education. Tens of thousands of students are enrolled online or at one of ITT’s roughly 150 institutions in nearly 40 states. ITT’s tuition costs are among the highest in the country in the for-profit industry. Earning an associate’s degree at ITT can cost more than $44,000. Bachelor’s degree programs can cost $88,000. That is significantly higher than the cost of similar degrees at a community college or a public four-year institution.

Most of ITT’s students borrow large sums to pay the high tuition costs and the majority of this money is borrowed from federal student loan programs. But private student loans also provide critical revenue for ITT. Because most ITT students’ federal aid does not cover the full cost of an ITT program, most students face a “tuition gap” requiring them to find other sources of funding.

The CFPB’s lawsuit alleges that ITT encouraged new students to enroll at ITT by providing them funding for this tuition gap with a zero-interest loan called “Temporary Credit.” This loan typically had to be paid in full at the end of the student’s first academic year. But ITT knew from the outset that many students would not be able to repay their Temporary Credit balances or fund their next year’s tuition gap.

The complaint also alleges that ITT mislead students about the transferability of credits and the existence of future job prospects.  The complaint seeks restitution for students, a civil fine, and an injunction against the company.  A copy of the complaint can be found here. ITT 3-19-14

Kolbe & Kolbe Millwork Co., Inc. named in class action lawsuit over defective windows

This is a class action against Kolbe, the manufacturer of defective windows

As alleged, Kolbe’s non-vinyl window products (including both all wood and wood and aluminum product lines) are defective, as they are prone to chronic air and/or water infiltration following installation, and as the wood portions of the Windows are inadequately preserved or protected. As a result of Defendant Kolbe’s failure to properly design, develop, test, manufacture, distribute, market, sell, and ensure that the Windows were properly designed, Plaintiffs’ windows are leaking, rotting, cracking, warping, and otherwise failing, causing Plaintiffs to suffer damages.

Defendant Kolbe warrants and advertises that its windows are free from defects in materials and workmanship, are of superior quality, require little or no maintenance, and are durable, reliable, and long-lasting.  Kolbe, however, refuses to honor its purported warranties.

American Psychological Association, Inc. named in class action lawsuit over imposition of special assessments

This is a class action lawsuit brought on behalf of current and former APA members who have paid special or practice assessment fees as part of their annual dues. The APA falsely and deceitfully misled its members into thinking that payment of the special or practice assessment was mandatory and required for membership in the APA, when in fact that was not true.

The APA, a Washington, D.C. based non-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, is the world’s largest association of licensed psychologists with thousands of members throughout the country.

Since at least 2001, the APA had falsely represented to its members that a “mandatory” practice or special assessment over and above the annual dues was required for membership in the APA. In fact, payment of that assessment (which as of 2011 amounted to approximately $140.00 per member per year) was completely voluntary, and solely required for membership in the APA’s 501(c)(6) organization, the APAPO—a separate organization operated by the same leadership as APA from the same address in Washington, D.C. The APAPO conducts professional advocacy and lobbying on behalf of members.

The APAPO is organized under section 501(c)(6) of the Internal Revenue Code, ostensibly as an organization that is separate from APA, for purposes of conducting lobbying and advocacy activities. Such activities could not be lawfully conducted by the APA, which is a 501(c)(3) organization.

Recognizing that many of its members would not voluntarily pay to fund this lobbying and advocacy organization, APA deliberately sought to maximize lobbying funds outside of the proper lawful function of a 501(c)(3) entity. The APA misrepresented to its members that as part of annual membership renewal there was a “mandatory” assessment, which it then allocated to the APAPO.

Complaint: Amer Psy Assoc 12-24-13

Horizon Healthcare Services, Inc., dba Horizon Blue Cross Blue Shield Of New Jersey named in class action lawsuit over data breach

This is a nationwide class action brought against Horizon Healthcare Services, Inc., dba Horizon Blue Cross Blue Shield Of New Jersey (“Defendant “)for failing to adequately secure and safeguard its members’ (1) sensitive personally identifiable information (“PII”), which includes without limitation members’ names, dates of birth, Social Security numbers, and addresses; and (2) protected health information (“PHI”) which contains PII, in addition to members’ demographic information, medical histories, test and laboratory results, insurance information, and other data collected by health care professionals to identify an individual and determine appropriate care.

As detailed in the complaint, in early November 2013, two unencrypted laptop computers were stolen from Defendant’s headquarters in Newark, New Jersey.  According to Defendant’s website, over 839,000 members were notified that their personal information may have been breached.

In its Privacy Policy, Defendant falsely claims that it “maintain[s] appropriate administrative, technical and physical safeguards to reasonably protect [members’] Private Information.”

The 2013 massive data breach could have been prevented. Six years earlier, in early January 2008, Horizon suffered a similar theft, placing it on notice of the vulnerability of its data security. At that time, a different laptop containing PII for roughly 300,000 members was stolen from the residence of one of Defendant’s employees. The massive breach caught the attention of government officials, prompting an inquiry into Defendant’s practices. Defendant responded by claiming to be in the process of encrypting all desktops, laptops, and portable media devices, a process it anticipated would be completed in March 2008

The laptops stolen in 2013 contained members’ unencrypted PII as well as PHI. Defendant’s failure to comply with longstanding industry standard encryption protocols was a violation of its own privacy practices and jeopardized Defendant’s members’ PII and PHI.

According to the lawsuit, because of the 2008 laptop theft and ensuing public concern, Defendant assuredly knew the risks involved in maintaining sensitive member PH and PHI on unencrypted laptops and indeed publicly stated it would change its practices; nonetheless, Defendant continued to store such sensitive material in an unsafe manner.

Plaintiffs bring this lawsuit on behalf of themselves and all others in the United States who enrolled in Defendant’s health insurance plans on or before November 3, 2013, and whose PII or PHI resided on one or more laptops stolen from Defendant’s headquarters in Newark on or about November 1-3, 2013, alleging that Defendant has violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. 1681 1681x, the New Jersey Consumer Fraud Act, breached its contract with Plaintiffs and members of the proposed Class, and acted negligently in safeguarding its members’ PII and PHI. Plaintiffs seek damages as well as injunctive relief requiring Defendant to take steps to ensure that its members’ PHI and PH are adequately protected.

NIBCO, Inc., named in class action lawsuit over cross-linked polyethylene plumbing tubes

Nibco

This case concerns cross-linked polyethylene plumbing tubes (“PEX Tubing”), the brass fittings required to connect the PEX Tubing together (“PEX Fittings”), and the stainless steel clamps (herein “PEX Clamps”) required for joining the PEX Tubing and PEX Fittings. As discussed below, the PEX Tubing, the PEX Fittings and the PEX Clamps at issue are all manufactured or distributed by Defendant NIBCO, Inc. (“NIBCO” or “Defendant”) and suffer from undisclosed design and/or manufacturing defects that inevitably cause them to fail prematurely Specifically, the PEX Tubing suffers from a design and/or manufacturing defect because it is prone to premature oxidative failure and creep rupture.

As alleged in the complaint, the PEX Fittings suffer from a design and/or manufacturing defect because they are prone to dezincification corrosion. The PEX Clamps suffer from a design and/or manufacturing defect because they are prone to failure by chloride-induced stress corrosion cracking. When any of these components fail, it leads to the release of water which causes significant damage to surrounding property and/or prevents the plumbing system from functioning as intended.

NIBCO has manufactured and advertised its PEX Products for use in plumbing systems throughout the United States. It has repeatedly represented that consumers should trust NIBCO to provide the highest quality PEX Products because the company has over 100 years of industry experience and is an industry leader in the manufacture of PEX Products. NIBCO warranted that its PEX tubing would be free from any defects in materials and workmanship for a period ranging from ten (10) years to twenty-five (25) years, dependent upon whether NIBCO PEX fittings and NIBCO valves and installation accessories were also used in the installation.

The complaint contends that contrary to these affirmative statements, the PEX Products suffer from design and/or manufacturing defects. Specifically, and as a result of such defects, the PEX Tubing is predisposed to premature oxidative failure and creep rupture, the PEX Fittings are predisposed to prematurely fail as a result of dezincification corrosion, and the PEX Clamps are predisposed to prematurely fail as a result of chloride-induced stress corrosion cracking.

The PEX Product Defects have caused plumbing systems to catastrophically fail and release water, which has caused and will continue to cause Plaintiffs and the Class to incur damages through no fault of their own.

Plaintiffs seek relief for damages sustained by Plaintiffs and the Class that were proximately caused by NIBCO’s Defective PEX Products used in Plaintiffs’ and Class members’ homes and other structures, or which otherwise were installed in the homes and structures of Plaintiffs and the Class.

Class: All persons or entities who sustained damages proximately caused by NIBCO’s Defective PEX Products used in the water plumbing systems of Plaintiffs’ and Class members’ homes and other structures, or which otherwise were installed in the homes and structures of Plaintiffs and the Class and require remediation.

COMPLAINT

Dick’s Sporting Goods, Inc. named in class action lawsuit over deceptive practices

This action challenges Defendant Dick’s unlawful, deceptive, and undisclosed business practice by which it denies customers who return items purchased with store coupons the full value of those coupons, even when the original purchase (less a returned item) otherwise qualifies for the use of the coupon. Stated otherwise, when customers purchase more than the qualifying amount needed to redeem the coupons (even after the value of a returned item is deducted from the original sale), Dick’s improperly reduces the refund on the returned item by a pro-rated amount of the value of the coupon it assigns to the returned item. This policy –which the Attorney General of the State of New York has declared unlawful and in violation of New York’s General Business Law- has harmed New York consumers, who have been deprived of the full value of the coupons which Dick’s uses to entice consumers’ purchases. Plaintiff seeks to redress this deceptive practice and recover damages for a class of New York consumers who have been deceived by Dick’s unlawful policy.

Boar’s Head named in class action over false advertising of low sodium meats

The action is brought against Boar’s Head Provisions Company, Inc. on behalf of all consumers who purchased any of the following Boar’s Head products: Golden Catering Style Oven Roasted Turkey Breast 47% Lower Sodium;. Our Premium 47% Lower Sodium Oven Roasted Turkey Breast-Skinless; Hickory Smoked Black Forest Turkey Breast 40% Lower Sodium; and Branded Deluxe Ham 42% Lower Sodium.

According to the complaint, Boar’s Head engages in deceptive business practices in violation of New York law. Boar’s Head misrepresented the sodium content of its Lower Sodium Meats as compared to the United States Department of Agriculture (the “USDA”) data for the same products and selling them to Plaintiff and the Class as part of its “Health and Wellness” line of products.

 As alleged, Boar’s Head falsely and deceptively claims in the product names and labels of its Lower Sodium Meats that they contain specifically stated percentages less sodium as compared to the USDA data for the same products with full sodium content. These claims are false, and in reality, Defendant exaggerates the reduction of sodium in its Lower Sodium Meats compared to the USDA data.

In its products’ names, and on the product labels, Defendant deceptively represents to New York consumers that its “Golden Catering Style Oven Roasted Turkey Breast 47% Lower Sodium” and its “Premium 47% Lower Sodium Oven Roasted Turkey Breast Skinless” contain 47% less sodium than USDA data for oven roasted turkey breast. In fact, these products do not contain 47% less than the USDA data for oven roasted turkey breast. Likewise, Defendant deceptively represents to New York consumers that its “Hickory Smoked Black Forest Turkey Breast 40% Lower Sodium” contains 40% less sodium than the USDA data for smoked turkey breast, when it does not. Defendant deceptively represents to New York consumers that its “Branded Deluxe Ham 42% Lower Sodium” contains 42% less sodium than the USDA data for ham products, when it does not. Defendant’s practices suggest that its Lower Sodium Meats are healthier options than other meat options, and consequently appeal to health conscious consumers.

Defendant’s representations regarding its lower sodium turkey products also omit that the products contains the same or virtually the same amount of sodium as Defendant’s regular sodium turkey products.