Unsubstantiated marketing claims that exploit consumer anxiety amid the coronavirus pandemic are a top priority for private class action litigants and federal regulators.  In fact, the FTC and FDA have recently issued joint warning letters about express and implied claims on marketing materials that are not supported by competent and reliable scientific evidence.

“Coronavirus” and “COVID-19” are dangerous “trigger terms” (amongst others).  Immune system “boosts” or “improvements,” as well as the mention of medical conditions or disease prevention and cure are also potentially problematic.

Both express and implied representations are relevant.

Most recently, the FTC sent warning letters to multi-level marketers regarding their products’ purported ability to treat or prevent coronavirus and earnings claims to consumers who have recently lost income.  The letters instruct the recipients to notify the FTC within 48 hours about the specific actions they have taken to address the agency’s concerns.

“MLMs and other companies that distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making,” said FTC attorney Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.  “During this health and economic crisis, we are on the lookout for false income claims for work-at-home opportunities, in addition to spurious health claims that products can treat or prevent COVID-19.”

The new slew of letters highlight specific claims made by the companies or their distributors in social media posts and videos posted online, including:

  • A video that includes the statement, “I can tell you that there’s thousands of people that are out of work right now. They’re all looking for a way to go earn money.  This is a great stimulus package, because you get to teach somebody how to go earn $1,730 literally in their first 10 days in the business.”
  • A social media post that said, “Got the coronavirus heebeegeebees? Boost your immunity with this amazing deal!!!!”

The latest group of warning letters is the first to also include warnings related to claims about potential earnings related to the economic fallout from the pandemic.

In letters alleging unsubstantiated health claims, the FTC states that one or more of the efficacy claims made by the companies are unsubstantiated because they are not supported by scientific evidence, and therefore violate the FTC Act.

In letters alleging unsubstantiated earnings claims, the FTC reminds the companies about what constitutes a false or misleading earnings claim that would violate the FTC Act.

The letters refer the companies to the agency’s guidance for MLMs, remind them that they are responsible for the claims made by their members and representatives, and advise the recipients that they and their members must immediately cease making all claims that would be false or misleading.

Marketing claims about supposed therapies ranging from stem cell infusions to acupuncture and ozone treatments have also caught the eye of the FTC.  A third set of letters warning marketers throughout the United States to stop making unsubstantiated claims that their products and therapies can treat or prevent coronavirus has also recently been circulated.

Sellers of supplements including colloidal silver, teas, essential oils, and other products pitched as scientifically proven coronavirus treatments have already been put on notice.  The third set of warnings address a wider range of products and supposed treatments, including some that may appear more medically sophisticated to consumers, such as acupuncture, intravenous “therapies” with high doses of Vitamin C, ozone therapy and purported stem cell treatments.

These letters also advise the recipients to immediately cease making all claims that their products can treat or cure coronavirus and to notify the FTC within 48 hours about the specific actions they have taken to address the agency’s concerns.

The FTC also has sent letters to several Voice over Internet Protocol (VoIP) service providers, warning them that it is illegal to aid or facilitate the transmission of pre-recorded telemarketing robocalls pitching supposed coronavirus-related products or services.

Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP.  Follow him on Twitter @FTC defense attorney.

Informational purposes only. Not legal advice. May be considered attorney advertising.