FTC Settlement Silences Advertisers of Supplements Advertised as Effective for Children’s Speech Disorders; Settlement Silent on the Number of RCTs RequiredJanuary 14, 2015
By Riëtte van Laack –
According to an FTC Complaint, filed in the United States District Court for the Northern District of Illinois, the advertising practices of NourishLife, an Illinois Company, and its owner, Mark Nottili, (“Defendants”) violated the FTC Act. The FTC alleges that Defendants falsely advertised its “speech” supplements with claims that the products would help children with speech problems and develop normal speech and language capacity, without having clinical evidence to support such claims. The FTC asserts that from at least 2008 through 2013, Defendants sold the supplements on the company’s website and through a network of distributors. Among other things, the FTC alleged that:
- Defendants claimed that the speech products were clinically proven to work whereas they had no clinical data;
- Defendants claimed that a website, which discussed evidence regarding the effectiveness of various ingredients included in Defendants’ speech products, was independent, whereas Defendants controlled the website; and
- Defendants used “dramatic testimonials from parents” but failed to disclose a material connection between the parents (who received free supplies) and Defendants.
Under a proposed stipulated settlement Defendants will be enjoined from making advertising claims for Defendants’ speech products unless they possess competent and reliable scientific evidence to support the claims. For the speech products, “competent and reliable scientific evidence” is “evidence [on the covered or an essentially equivalent product] that is sufficient in quality and quantity, based on standards generally accepted by experts [in the field] when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate” the speech product’s claim. The clinical testing must
(1) “be randomized, double-blind, and placebo-controlled” (“RCT”) and
(2) “be conducted by researchers qualified by training and experience to conduct such testing.”
Notably, the settlement does not specify the number of RCTs required for claims for the speech products. The provision regarding substantiation of claims for non-speech products does not include a specific requirement for RCTs.
The proposed settlement also addresses Defendants’ future use of endorsements and testimonials. Any material connections must be disclosed “clearly and conspicuously, and in “close proximity” to the endorsement, testimonial, or other representation. The terms “clearly and conspicuously” and close proximity” are defined (e.g., “close proximity” means “on the same print page, webpage, or other electronic page, and not accessed or displayed through hyperlinks, pop-ups, [etc.]”).
The settlement includes a monetary judgment of $3.68 million. However, due to the Defendants’ alleged inability to pay, all but $200,000 of this amount is suspended.