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Are paid search terms about to receive a lot more Federal Trade Commission (FTC) attention?  That’s the question you could be asking after the FTC last week announced a settlement with Nourish Life LLC.  Defendants marketed a dietary supplement called Speak that contains among other things omega-3 and omega-6 fatty acids, vitamin E and vitamin K.  According to the FTC, defendants lacked adequate substantiation for the claim that Speak would help children develop and maintain normal speech, including children who suffer from autism and verbal apraxia (a speech disorder).

The FTC’s complaint cites claims made on websites and social media as well as in direct mail, brochures, and displays at medical conferences.  In addition, the complaint makes reference to paid search terms and sponsored links as one of the mechanisms by which the defendants marketed their product.  The paid search terms cited included “toddler speech problems,” “help my child talk,” “autism treatment,” and “verbal apraxia treatment.”

Does this mean that paid search terms and sponsored links are now fair game for FTC scrutiny?  Well like any good lawyer, we think the answer is “it depends.” 
Continue Reading The FTC Speaks Softly But Carries a Big Stick – Do Paid Search Terms Go Under the Microscope?

A free trial of a weight loss pill is the best of both worlds, right?  Not according to the FTC, which recently brought its first Restore Online Shoppers’ Confidence Act (ROSCA) case against a group of marketers who advertised exactly that.

Weight loss substantiation is old territory for the Commission.  ROSCA, however, is not.  The FTC’s first ROSCA case, filed in Nevada district court, alleges that health companies made unsubstantiated claims that their dietary supplements would lead to weight loss, muscle building, virility, and improved skin.  More significantly, however, are the allegations surrounding the marketers’ “free trial” and “buy-one-get-one free” offers.  According to the FTC, the companies collected customers’ debit and credit card information in order to enroll customers in a negative option (subscription) program.  While there is certainly nothing wrong with subscription programs on their face, the FTC alleges that the companies here inadequately disclosed the nature of the program – they never clearly told customers their accounts would be charged each month.  ROSCA prohibits marketers from charging customers in an Internet transaction unless the marketer has clearly disclosed all of the material terms of the transaction and obtained customers’ express informed consent. In this case, according to the FTC, the marketers did not provide the required disclosures for a negative-option program before accepting payment; failed to disclose material facts about their refund and cancellation policy, among other facts; and didn’t give customers a simple, effective way to stop the automatic charges.Continue Reading FTC Says Companies Have a Fat Chance of Getting Away With Deceptive Online Marketing in First ROSCA Case