Design Lab Asymmetrical DressBaseball season is just around the corner, and the FTC’s native advertising case against retailer Lord & Taylor illustrates the baseball rule of “Three strikes and you’re out!”  In its first native advertising case since releasing its Enforcement Policy Statement Addressing Native Advertising and Deceptively Formatted Advertising, the FTC reminds advertisers that those guidelines will be enforced.

According to the complaint, Lord & Taylor launched a new Design Lab collection in the fall of 2014.  As part of its marketing campaign, Lord & Taylor included a comprehensive social media campaign (“product bomb”) for the end of March 2015.  The campaign consisted of Lord & Taylor-branded social media posts and the use of a team of “influencers,” all focused on one article of clothing—the Design Lab Asymmetrical Dress.


Continue Reading Three Strikes and You’re Out!: The FTC’s Native Advertising Case Against Lord & Taylor

The Federal Trade Commission (“FTC”) has just released its Annual Summary of Consumer Complaints, and debt collection (29%), identity theft (16%), and imposter scams (11%) top the list of the most common categories of consumer complaints.

The Consumer Sentinel Network Data Book is produced every year from complaints received by the FTC’s Consumer Sentinel Network, including consumer complaints and complaints forwarded from state and federal law enforcement agencies, national consumer protection organizations, and non-governmental organizations. While the data book consists of unverified complaints, it is a useful tool for tracking developments and issues important to consumers.

The FTC’s summary overall shows little change from last year.  There were a few categories that changed places; for example debt collection complaints traded places with identity theft to claim the top spot, but the FTC also noted that the spike in debt collection complaints was due in large part to one data contributor employing a new mobile app to collect such complaints.  Internet Services, which had been number 10 fell out of the top ten to be replaced by Credit Bureaus, information furnishers and report users.
Continue Reading Debt Collection Tops 2015 List of Most Common Consumer Complaints

Well, not quite live.  This week we’ll be providing updates from the NAD Annual Conference, which kicked off today in New York.  The keynote address was given by  FTC Commissioner Julie Brill, who reminded the audience that while the advent of the internet age and social media has radically changed how advertisers market their

https://www.youtube.com/watch?v=m648v4s5sFc

It’s Summer in the City and the back of my neck, and just about everything else, is getting dirty and gritty.  The FTC, however, just announced two cases reminding advertisers to keep it clean on claims that their products can sanitize.

The FTC sued Angel Sales, Inc. and Zadro Health Solutions, as well as the two companies’ principals, alleging that the companies’ claims that their ultraviolet light devices could kill everything from foot fungus to MRSA were unsubstantiated and therefore deceptive.  The companies settled the FTC’s charges by agreeing to substantial monetary judgments and injunctive relief prohibiting such claims in the future.  In 2011, the FTC settled similar charges against Oreck for its UV vacuum cleaner.


Continue Reading FTC Reminds Marketers to Keep It Clean

We all love a good bargain, but sometimes a good deal seems too good to be true.  In 2011, Cynthia Spann went bargain-hunting at a California J.C. Penney, and walked out convinced that she had saved over 30%.  However, she later discovered the products she bought at a “bargain” price had never really been sold at full price.  As we have written previously, pricing and discounting claims are a frequent target of FTC enforcement actions, competitive challenges at the National Advertising Division, and plaintiffs’ attorneys.   After learning about the alleged false discounting, Spann brought a class action on February 8, 2012, alleging violations of California’s Unfair Competition Law, California’s False Advertising Law, and California’s Consumers Legal Remedies Act.  On May 18, 2015, the United States District Court for the Central District of California granted certification of the class action, serving as a timely reminder for retailers and businesses everywhere that businesses must carefully monitor pricing practices to ensure compliance with state and federal law regarding false and deceptive pricing.

According to Spann’s complaint, J.C. Penney’s false advertising campaign was “massive, years-long, pervasive[,] [and] consistent across all” private and exclusive brands of apparel and accessories.  The essential aspects of the advertising campaign are familiar to many American shoppers: J.C. Penney stores and websites would feature both an “original” or “regular” price and a substantial dollar/percentage discount, reinforcing the message that the customer had received a bargain by including a line for “Total Savings Today” on receipts.  As the FTC notes in its Guides Against Deceptive Pricing, this is a totally legitimate form of advertising as long as the original/regular price is genuine; that is, “the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time.”  However, if “the former price being advertised is not bona fide but fictitious”—in other words, if an “inflated price was established for the purpose of enabling the subsequent offer of a large reduction”—then “the ‘bargain’ being advertised is a false one.”  California law is also rather clear on this topic:  “No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement.”


Continue Reading Court Grants Class Cert. in Deceptive Pricing Action Against Clothing Retailer

3DPrinterWe agree – the Jetsons era has indeed arrived. Beyond the days of “smart” everything, now 3D printing has taken center stage in the tech world. While it is not so farfetched to imagine 3D-printed machine parts, prototype models, or even toys, it is might be harder to watch it printing foods, implantable medical devices, cosmetics, drugs and even human tissue. All too futuristic? Not really. The technology of 3D-print FDA-regulated products is, in large part, already here and rapidly progressing.

Yet, as technology continues to develop, questions arise as to whether, and how, the U.S. Food and Drug Administration’s (“FDA”) regulatory framework will keep pace to impose the same safety, quality and efficacy standards to 3D-printed foods, drugs, cosmetics, and medical devices that currently apply to traditionally manufactured goods. How FDA chooses to deal with 3D-printed products will significantly impact not only barriers to market entry, but also post-marketing enforcement risks. Similarly, even assuming an FDA-regulated 3D-printed product is successfully brought to market in accordance with FDA standards, manufacturers must still assess options and potential challenges associated with protecting their intellectual property.

Through this multi-part blog series, we will explore these questions, considerations and challenges for 3D printing that are likely to be regulated by FDA, with particular focus on foods (consumed on earth and in space), cosmetics and medical devices. While, at this stage, FDA issues may raise more questions than clear answers, this blog series will explore and discuss the topics that are at the forefront of FDA’s agenda regarding 3D printing and, therefore, require careful consideration by any company that contemplates involvement in the 3D-printed foods, cosmetics or devices industries. 
Continue Reading 3D Printing Series: Before You Click “Print” On Your Pizza, Palette or Prosthetic: FDA and IP Considerations With 3D-Printed Foods, Cosmetics And Medical Devices

The Better Business Bureau (BBB), known for being the home of NAD, CARU and other advertising self-regulatory forums, is now also the proud owner of an updated advertising code.  The BBB announced earlier this month significant updates to its Code of Advertising for the first time since 1985 (when the number one single was “Careless Whisper” by Wham.)

In a press release, the BBB indicated that changes to the Code were made “to reflect the many new ways that advertisers reach consumers via websites, social media, texting and other channels.”
Continue Reading BBB Updates Advertising Code to Keep Pace with Technology

The gift card saga in New Jersey looks like it has finally wrapped up with Governor Chris Christie tying a bow on the proceedings by signing NJ S-2235, eliminating data collection requirements for sellers of qualifying gift cards and gift certificates.  Those who have followed this story may recall that back in 2010 New Jersey passed a new gift card law, which made a number of changes including shortening the abandonment period and requiring gift card sellers to collect address information, or at a minimum zip codes, from gift card purchasers.  The law was the first of its kind and led many companies, such as Blackhawk Network and InComm, to pull their gift cards from the state.  In 2012, we reported that the Third Circuit upheld the law, including the data collection provision, but as we advised later that year, the state subsequently amended the law, extending the abandonment period to 5 years and delaying the collection requirement until July 1, 2016. 
Continue Reading Returned to Sender: New Jersey Repeals Zip Code Collection Requirement for Gift Card Sellers

survey

Companies doing business in California must now complete a comprehensive “survey” if selling particular products to consumers within the state.  However, this is not your typical consumer satisfaction survey, but rather a submission of detailed information for each product meeting the requirements discussed below.  The detailed submission must include include information on product formulas and

sealEveryone loves an award.  It is one thing when a marketer promotes its own product but to be able to back promises with a seal, a certificate, or other third-party recognition of greatness gives extra confidence to consumers that this is a product they can really trust.  There has been much talk recently about dos and don’ts with use of seals.  ‎The FTC has brought multiple cases when companies offering seals allegedly fail to research and properly certify the companies it does business with to ensure compliance with the articulated award standards, including in cases involving green seals and Made in USA.  Last week we wrote about a similar case involving the TRUSTe COPPA safe harbor seal. NAD recently examined use of seals from a different angle, considering whether by use of a seal a marketer was conveying an overly broad promise about its product. The case reminds us of principles the FTC articulated in its Green Guides that a marketer is responsible to define and explain what a seal means to its consumers unless it is patently clear from the seal itself. Like many things we advertising lawyers do, this is often easier said than done!
Continue Reading Is It Safe To Use Seals to Promote Your Product? NAD Says Foo to FuHu