FTC sends warning to hundreds of companies that unsubstantiated claims will be met with steep civil penalties
The Federal Trade Commission has issued a Notice of Penalty Offenses Concerning Substantiation of Product Claims to hundreds of brands, putting them on notice about the civil penalties that could result from making unsubstantiated claims on its products.
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The Federal Trade Commission (FTC) has issued a Notice of Penalty Offenses (NPO) Concerning Substantiation of Product Claims to hundreds of brands, putting them on notice about the civil penalties that could result from making unsubstantiated claims on its products. Specifically, companies can face a civil penalty of $50,120 per violation. According to FTC, violations include: “failing to have adequate support for: objective product claims; claims relating to the health benefits or safety features of a product; or claims that a product is effective in the cure, mitigation, or treatment of any serious disease,” as well as, “misrepresenting the level or type of substantiation for a claim, and misrepresenting that a product claim has been scientifically or clinically proven.”
In a statement from Commissioner Rebecca Kelly Slaughter, she explained the reasoning behind the NPO as follows: “Obtaining access to civil penalties for first-time offenders through this Notice is essential to changing the dynamics of the marketplace. Injunctive relief alone cannot, and will not, remediate the harm from these practices, but monetary penalties can send a strong message to potential violators. Civil penalties large enough to change market behavior must be part of the equation when it comes to substantiation cases.”
According to the FTC, the letters do not indicate that the recipients engaged in deceptive or unfair practices, but were simply distributed to those companies that are making or likely to make health claims.
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