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The Federal Trade Commission has been busy. On the heels of its
$40 million settlement with Skechers, one of the largest of its
kind, the Commission yesterday announced that it has settled with
Oreck Corporation regarding allegedly unsubstantiated claims that
the company made regarding its Halo vacuum cleaner and ProShield
Plus portable air purifier. Oreck has agreed to pay $750,000, which
will be disbursed to affected consumers via $25 refund checks, and
has further agreed to refrain from making certain identified
advertising claims without adequate substantiation. As is customary
in these types of proceedings, Oreck has neither admitted nor
denied the FTC's allegations but has agreed to abide by the
FTC's consent order (in this case, a twenty-year order) as a
means of resolving the dispute.
Although the monetary component of the Oreck settlement is
significantly smaller than that of the Skechers settlement, the
underlying issues are similar. In each case, the FTC alleged that
the marketers made claims about the health effects or efficacy of
their products that were not adequately substantiated and were,
therefore, misleading to consumers. The FTC pursued Oreck for
allegedly unsubstantiated claims that its Halo vacuum cleaner and
ProShield Plus air cleaner would: (a) reduce the risk of the flu,
(b) reduce the risk of other ailments caused by bacteria, viruses,
molds or allergens, and (c) eliminate all or some specified
percentage of germs, bacteria, dust mites, molds, viruses or
allergens.
One of the ads featured in the FTC's complaint depicts a
woman standing in a wallpapered room (a kitchen, judging by the
floral design) wearing a gas mask. The ad asks, "WANT A NEW
WAY TO HELP BATTLE THE FLU?" and reports that testing showed
"up to a 99% reduction in airborne particles."
Another ad depicts the Oreck Halo vacuum cleaner emitting a
stylized, blue UV-C light with the words "KILLS FLU
GERMS." The ad claims that the Halo is "the only vacuum
in the world that uses powerful UV-C light to kill many of the
germs that could be living on your floors, such as the flu"
and states that the Halo "traps 99.9% of particulates down to
0.3 microns."
According to the FTC, these and similar claims were not
adequately substantiated at the time they were made. It is not
possible to tell from the documents disclosed publicly what level
of substantiation Oreck had at the time it disseminated the ads.
(Given the specificity of the claims, it is unlikely that Oreck had
no studies substantiating its claims). In typical fashion, the
FTC's complaint alleges merely that "respondent did not
possess and rely upon a reasonable basis that substantiated the
representations," and the consent judgment prohibits similar
claims unless at the time the claim is made, "respondent
possesses and relies upon competent and reliable scientific
evidence that is sufficient in quality and quantity based on
standards generally accepted in the relevant scientific
fields" to substantiate that the claim is true. Accordingly,
as with the Skechers settlement, there is little specific guidance
in the settlement documents for marketers who wish to play by the
FTC's rules when it comes to substantiating health and efficacy
claims.
Without clear interpretive guidance from the FTC, and in light
of the subjective inquiry required to determine whether a
particular claim is reasonably supported by scientific evidence,
the prospect of making health or efficacy claims can be daunting.
However, as previously discussed, marketers can minimize their risk
by keeping in mind the following key points, which have emerged
from recent FTC actions.
First, the FTC's efforts on claim substantiation are not
just focused on nutritional supplements, weight loss products, and
other "ingestibles." The FTC is increasingly targeting
consumer marketers making efficacy and health related claims in
other contexts.
Second, efficacy claims that reference specific percentages
(e.g., "traps 99.9% of particulates") seem particularly
attractive to the FTC. Both the Oreck and the Skechers cases
featured very specific quantitative claims about the products at
issue.
Finally, as demonstrated in the Skechers settlement, the FTC
continues to push for two clinical studies for certain types of
claims even as it requires only a single clinical study for claims
that are quite similar (i.e., weight loss and muscle
strengthening). While this incongruous approach arguably calls into
question the rationale for two studies, marketers can minimize
their risk by relying on two clinical studies whenever
possible.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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