United States: 'All Natural' Claims Challenged By FTC; Four Companies Settle And One Is Charged

Four companies have agreed to settle Federal Trade Commission (FTC) allegations that they falsely marketed personal care products online as "all natural" or "100% natural" although they contain artificial ingredients. The FTC charged a fifth company with making similar claims.

The FTC's Allegations According to the FTC's complaints against the companies and a statement it released announcing the proposed settlements:

  • Trans-India Products, Inc., doing business as ShiKai, based in Santa Rosa, Calif., markets "All Natural Hand and Body Lotion" and "All Natural Moisturizing Shower Gel," both directly and through third-party websites including walgreens.com and vitacoast.com, although the lotion contains the synthetic ingredients Dimethicone, Ethyhexyl Glycerin and Phenoxyethanol and the gel contains Ethylhexyl Glycerin and Phenoxyethanol.
  • Erickson Marketing Group, doing business as Rocky Mountain Sunscreen, based in Arvada, Colo., uses its website to promote "all natural" products such as the "Natural Face Stick," which contains synthetic ingredients Dimethicone, Polyethylene, Butyloctyl Salicylate and Neopentyl Glycol Diethylhexanoate.
  • ABS Consumer Products, LLC, doing business as EDEN BodyWorks, based in Memphis, Tenn., makes "all natural" claims on its own websites and at walmart.com for its haircare products including "Coconut Shea All Natural Styling Elixer" and "Jojoba Monoi All Natural Shampoo" although 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" although it contains the synthetic ingredients Dimethicone and Caprylyl Glycol.

The FTC contended that the fifth company, California Naturel, Inc., located in Sausalito, Calif., advertises "all natural sunscreen" for sale on its website, although the product contains Dimethicone. The FTC issued a complaint alleging that California Naturel has made deceptive "all natural" claims in violation of Sections 5 and 12 of the FTC Act.

Proposed Settlements

As noted in the proposed settlements and the FTC's statement, the four settling companies agreed that they will not misrepresent the following when advertising, promoting or selling a product:

  • Whether the product is all natural or 100 percent natural;
  • The extent to which the product contains any natural or synthetic ingredient or components;
  • The ingredients or composition of the product; and
  • The environmental or health benefits of the product.

The proposed settlements also require that the companies have and rely on "competent and reliable evidence" to support those product claims if they do make them. The proposed settlement also provides that the companies recognize that some claims require "competent and reliable scientific evidence," 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.

The proposed settlements, which last for 20 years, also impose recordkeeping requirements on the companies and require that they file compliance reports with the FTC. The proposed settlements are subject to public comment through May 12, 2016, after which the FTC will decide whether to make the proposed consent orders final.

The FTC's complaint against California Naturel seeks relief similar to that contained in the proposed settlements agreed to by the other four companies.

Bottom Line

While these actions represent the first settlements by the FTC in a controversial area of the law, it is clear that the agency views "all natural" and "100% natural" claims as meaning that products have no artificial ingredients or chemicals. The FTC's charges and proposed settlements in these cases should serve as a reminder to advertisers about the need for care when making "all natural" claims.

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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