In This Issue:
- False Ad Suit Over General Mills' "Garlic Rye" Chips Clears First Legal Hurdle
- FTC Finalizes Settlement With Workado Over Misleading AI Detection Claims
- NAD Finds Debt Settlement Claims Unsubstantiated But Not Deceptive
- NAD Turns Up the Heat on Health Claims Over "Forever Chemicals" in Cookware
False Ad Suit Over General Mills' "Garlic Rye" Chips Clears First Legal Hurdle
A federal judge in the Southern District of New York denied General Mills' attempt to dismiss a lawsuit alleging that it misled consumers into believing that Gardetto's Special Request Garlic Rye Chips are primarily made with whole grains. The court found the plaintiff had plausibly argued that a reasonable shopper could be misled by the product's packaging.
According to the complaint, the plaintiff purchased the chips under the impression they were a healthier, whole grain option—largely because rye is a whole grain and the label emphasized it. She claimed the branding led her to believe the chips were made entirely, or at least to a significant extent, with whole grain rye flour.
The complaint alleged that the label was misleading because the main ingredient used in the chips is actually refined flour rather than whole grain flour, despite representations made on the front and back product label that convey to the reasonable consumer that the product is made mainly with whole grain flour. These included the name of the product itself ("Special Request Garlic Rye Chips"), the stylized emphasis of the word on the label, and the imagery of dark rye-style chips with visible garlic seasoning, which the plaintiff claims conveys a message that rye flour is a primary ingredient.
The back-of-package reinforces this impression, according to the plaintiff. The ingredient list reflects enriched white flour as the first ingredient, rye flour as the third, and caramel color as the last. The plaintiff contended that this order suggests that the chips' color comes naturally from rye flour rather than added coloring, giving the impression that the chips "are made mainly or with a significant amount of dark rye flour, which is false." The consumer claimed she was harmed because she paid a premium for the product, believing it primarily contained whole grain rye flour, and would not have paid as much if she had known that wasn't the case.
General Mills argued that the label was not misleading because no reasonable consumer would be misled by the chips' labels. Rather, General Mills asserted that "garlic rye" on the product label refers to the chip flavor, not to the ingredients contained, and that no reasonable consumer would "equate a product's flavor with its ingredients."
The company cited a line of cases—particularly those involving "vanilla" labeling—where courts held that references to flavor on packaging do not imply the presence of the named ingredient. There, courts held that the word "vanilla" generally refers to a flavor rather than an ingredient even absent an additional modifier like "flavored." Under that reasoning, General Mills contended, no reasonable consumer would construe "rye" as referring to whole grain content.
The plaintiff distinguished this case from the "vanilla" decisions, emphasizing that rye is more than a flavor—it is a grain, and one widely associated with health benefits. She directed the court to Mantikas v. Kellogg Co., a Second Circuit decision holding that marketing claims suggesting a product is made primarily with whole grains can be misleading if the product's main ingredient is in fact refined flour. In Mantikas, the court held that consumers are not required to scrutinize the ingredient list to correct potentially misleading front-of-package representations.
While the court acknowledged that General Mills' argument had some appeal—particularly the analogy to cases involving flavor labeling—it ultimately found that the comparison to Mantikas was more persuasive in this context. "Rye," the court noted, can refer to both an ingredient and a flavor. But unlike the vanilla flavoring cases, this product involves a grain-based snack, not a flavored beverage or dessert. The court further observed that rye flour, particularly whole grain rye, carries potential health implications. In addition, the court pointed out that the chips are not potato-based, but a grain-based product—making the presence or absence of whole grain content more significant to the reasonable consumer.
As a result, reasonable consumers could plausibly interpret the labeling as indicating that rye flour is a primary ingredient. Even if the whole grain cues were less overt than those in Mantikas, the court held that the allegations, taken together, were sufficient to proceed beyond the motion to dismiss.
Key Takeaways
The decision underscores the continuing importance of Mantikas and related consumer protection precedent in food labeling litigation. Courts remain willing to entertain claims that front-label messaging—especially when it implies health-related benefits such as whole grain content—can be misleading, even when the back label accurately lists ingredients. At the motion to dismiss stage, the bar remains relatively low for plaintiffs, particularly in cases where reasonable consumers may interpret packaging language or imagery to imply a healthier product than the ingredients substantiate.
FTC Finalizes Settlement With Workado Over Misleading AI Detection Claims
The Federal Trade Commission (FTC) has issued a strong warning to companies capitalizing on the AI boom: If you're marketing artificial intelligence tools, your claims better be grounded in reality—not hype.
In a recently finalized order, the FTC cracked down on Workado, a company that promoted an AI content detection tool it claimed could reliably determine whether a piece of writing was generated by a human or artificial intelligence. The problem? According to the FTC, Workado falsely promoted its product as having a much higher accuracy rate than it actually does.
Workado advertised its "AI Content Creator" and detection tool as boasting 98% accuracy, capable of discerning whether content came from platforms like ChatGPT, GPT-4, Claude, or Bard. These claims were central to its pitch to marketers, content creators, and educators looking to refine or verify AI-generated writing. But according to the FTC, those bold claims were significantly exaggerated. Internal testing reportedly showed that Workado's tool achieved only 53.2% accuracy, or approximately as accurate as a coin toss.
In addition to inflating performance metrics, the FTC alleged that Workado misrepresented how its tool was trained. Marketing materials claimed the model had been trained on a "vast amount" of varied text, including blog posts and Wikipedia entries. In reality, according to the complaint, the company trained its model solely on academic article abstracts—a narrow and unrepresentative data set that undermined its advertised capabilities. Moreover, Workado allegedly failed to test or fine-tune the tool to determine whether it could perform accurately on the kinds of content its users were actually submitting—ranging from blog posts to marketing copy.
This was impactful, alleged the FTC, because of the consequences of an incorrect assessment. A false assessment—such as mislabeling human-written content as AI-generated—could have serious consequences, including accusations of cheating, plagiarism, or professional misconduct, said the FTC. In a world where the line between human and machine-generated content is increasingly blurred, the accuracy of such tools can carry real reputational risk.
The complaint alleged violations of the FTC Act for deceptive marketing practices. The final order prohibits Workado from making efficacy claims about its AI content detection tools unless those claims are supported by competent and reliable evidence. Workado is also obligated to notify affected consumers about the settlement and the nature of the FTC's findings. The company must also submit annual compliance reports to the FTC for a period of three years.
Key Takeaways
While the future may bring a time when it no longer matters whether content is AI- or human-generated, we're not there yet. In today's environment, consumers care, institutions care, and the law cares. When companies offer tools promising to reveal the origin of content—and especially when those tools are marketed as highly accurate—the burden is on them to back those claims with evidence. Workado's case is a cautionary tale: In the AI gold rush, credibility is currency, and the FTC is making it clear that AI "hype-washing" will face regulatory scrutiny.
NAD Finds Debt Settlement Claims Unsubstantiated But Not Deceptive
"Get rid of your debt. Get back your life." It's a compelling promise—especially at a time when U.S. household debt tops $18 trillion. But in a space often plagued by aggressive and misleading marketing, claims like these don't go unchecked. The National Advertising Division (NAD) recently issued a decision following a self-initiated inquiry into claims made by Achieve Debt Solution (ADS), a provider of debt settlement services.
ADS markets its program as a way for individuals to reduce or eliminate unsecured debt through creditor negotiation. Among its key advertising claims were that consumers could "get rid of debt faster"—typically within 24 to 48 months. NAD determined that the advertising conveyed the implied message that consumers using Achieve would not be harassed or sued by creditors while in the program, that they could make low monthly payments on the program that would still leave them with funds to pay their bills, and that debt resolution estimates are typical of actual consumer results and inclusive of program fees.
NAD took issue with several of these claims but ultimately stopped short of finding them deceptive. Instead, its recommendations focused on clarifying and contextualizing the messages conveyed. For example, NAD found that the advertising could mislead consumers into thinking that the program applied to all debt, when in fact it covers only unsecured debt. NAD recommended that ADS make this distinction more explicit. While the 24-48 month program length was generally supported by data, NAD recommended that the company clarify that the "faster" in "get rid of your debt faster" means faster than getting rid of debt by making minimum unsecured debt payments.
With respect to affordability, NAD acknowledged that, while it may have been literally true that the program cost was 20 percent lower than minimum creditor payments, something that is literally true can still be misleading. Here, it was unlikely that heavily indebted clients would consider a $400 minimum payment low enough that it would not affect their ability to pay other bills. NAD therefore recommended more accurate framing of the cost-savings message.
NAD also evaluated a customer testimonial used in ADS's advertising. Although the overall sentiment in the testimonial aligned with the consumer's experience, NAD noted two concerns: the time it took the individual to complete the program exceeded the advertised average, and the ad implied that harassment from creditors would stop once the consumer enrolled in the program. In reality, creditor contact typically ceases only after debts are settled—not immediately upon program enrollment. NAD recommended clarifying both of these points in future marketing.
Key Takeaways
Compared to the more clear-cut cases of deception often seen in the debt relief industry, NAD's findings in this matter were relatively restrained. The decision reflects an effort to fine-tune ADS's messaging rather than issue a wholesale repudiation of its marketing practices. Still, the case underscores the importance of accuracy and context in advertising, particularly in an industry where vulnerable consumers may be making major financial decisions based on promises of relief. NAD's message to advertisers is clear: claims must be not only literally true, but also not misleading in context—especially when the stakes are this high.
NAD Turns Up the Heat on Health Claims Over "Forever Chemicals" in Cookware
Forever chemicals are everywhere these days, figuratively and literally. As public concern over PFAS (so-called "forever chemicals") grows, brands have been quick to lean into "PFAS-free" as a selling point. But a recent decision from the National Advertising Division (NAD) related to nonstick pans and PFAS makes one thing clear: Even in a heated debate over health and safety, advertising claims still need solid footing.
In a challenge initiated by the Cookware Sustainability Alliance (CSA), NAD reviewed a series of ads by Caraway Home, a brand that markets PFAS-free ceramic cookware. CSA represents manufacturers of traditional nonstick pots and pans—products that typically contain PTFE, a type of PFAS. The group took issue with Caraway's claims that traditional nonstick cookware is harmful to human health and that its own ceramic cookware is a safer, non-toxic alternative.
At the heart of the challenge were Caraway's express and implied messages about the toxicity of PTFE in traditional cookware. Caraway's ads featured statements like "most traditional cookware is made with forever chemicals, and when they are overheated, they can release these same toxins into your food," paired with ominous images of steaming, sludge-filled pans and references to PFAS exposure. NAD found that these visuals and messages conveyed a clear takeaway: that competitor cookware releases harmful chemicals during normal use and poses a health risk to consumers. This is a serious claim—and one Caraway couldn't substantiate.
Caraway argued that traditional nonstick cookware is known to be toxic and submitted an expert report from a chemical engineer stating that PTFE poses a risk to human health, as well as studies linking PFAS to adverse effects. But NAD found the evidence lacking. It noted that the studies did not specifically analyze the type of PTFE used in nonstick cookware, nor did they demonstrate that consumers would be exposed to toxic levels of PFAS under normal cooking conditions. Crucially, NAD found that Caraway did not prove that traditional nonstick cookware is inherently toxic or harmful when used as intended.
CSA, on the other hand, pointed to a prior NAD decision from 2012 involving similar claims made by GreenPan. In that case, NAD concluded that the temperatures required for PTFE to degrade and release harmful substances are rarely—if ever—reached during typical home cooking. NAD found no reason to depart from that rationale here.
Caraway did score one win: NAD agreed that the company could truthfully advertise that its products are free of PFAS and non-toxic—claims that were supported by the record. However, NAD drew the line at the company's comparative safety claims. Without clear evidence that traditional nonstick cookware is less safe, NAD recommended that Caraway refrain from implying that its products are safer by comparison.
NAD also addressed Caraway's use of its founder's personal story, in which he allegedly became ill from using Teflon-coated pans—often referred to as suffering from "Teflon flu." NAD allowed Caraway to tell that anecdote, but with a critical caveat: the company cannot suggest that the founder's experience is scientifically proven or that competitors' cookware caused the illness.
Key Takeaways
This decision underscores NAD's commitment to strict substantiation standards, even in areas where public sentiment may lean strongly in one direction. While consumers are increasingly skeptical of PFAS and inclined to view "PFAS-free" as a health benefit, advertisers cannot use consumer fears as a substitute for evidence. NAD made clear that to support claims of toxicity or comparative safety, advertisers must present specific, reliable evidence showing harm under normal use conditions. Generalized concerns about PFAS or isolated expert opinions won't suffice. For advertisers navigating the complex and evolving world of environmental and health-related marketing, this decision is a reminder: claims about product safety—especially comparative claims—must be grounded in science, not sentiment.
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