FTC Warns Nearly 700 Advertisers About Proper Substantiation and Endorsement Practices

On April 13, 2023, the Federal Trade Commission (FTC) sent letters containing two Notices of Penalty Offenses to 670 advertisers¹ of over-the-counter drugs, homeopathic products, dietary supplements, and functional foods, reminding them of the need for competent and reliable scientific evidence to substantiate many claims and to ensure that endorsements of their products and brands are not deceptive.²  While not notice of actual wrongdoing, the Notices pave the way for the FTC to seek civil penalties of up to $50,120 per violation should any of the companies’ future advertising not comply.³ The Notices come on the heels of the FTC’s December 2022 release⁴ of its updated Health Products Compliance Guidance⁵ and amid possible updates and a rulemaking concerning its Endorsement Guides.⁶

The Notice of Penalty Offenses Concerning Substantiation of Product Claims⁷ reiterates that advertisers must not:

• Make an objective product claim without a reasonable basis, that is founded on competent and reliable evidence at the time the claim is made.
• Tout the health benefits or safety features of a product without competent and reliable scientific evidence which has been collected and evaluated in an objective manner by qualified persons.
• Make express or implied claims that a product will cure, mitigate, or treat any serious disease without a clinical trial that is: (1) randomized; (2) controlled; (3) double-blind; (4) conducted by qualified persons; (5) measured by disease end points or validated surrogate markers; and (6) statistically significant in its results.
• Misrepresent the level or type of substantiation for a claim.
• Represent that a product has been scientifically or clinically without evidence that the relevant scientific community would approve of at the time the claim was made.

The Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials⁸ was originally sent to a different set of companies in 2021.⁹ It reaffirms that advertisers must not:

• Misrepresent that a third party has endorsed a product.
• Misrepresent that an endorsement of a product reflects the experience, view, or opinion of its users.
• Misrepresent an endorser is an actual, current, or recent user of a product.
• Continue to use an endorsement without good reason to believe the endorser continues to hold the views expressed in the endorsement.
• Use testimonials with unsubstantiated or deceptive claims, even if the testimonials are genuine.
• Fail to disclose material connections between an endorser and a product if that is not reasonably expected by consumers.
• Expressly state or imply that an endorsement represents the typical experience of users of a product.

Although these Notices target companies in the health and wellness space, FTC has not been shy about issuing similar Notices in other industries, and advertisers across the spectrum of products and services should take note.