The coronavirus pandemic has caused illnesses, deaths, isolation and tremendous economic disruptions. Not surprisingly, many people are feeling desperate for solutions, and unfortunately, they can fall prey to misleading coronavirus marketing claims.
The Federal Trade Commission (FTC) is seeking to prevent these marketing practices. Indeed, the FTC recently sent ten warning letters to multi-level marketing companies (MLMs) telling them to remove and address claims that the MLMs or their participants are making regarding the supposed ability of products to prevent or treat the coronavirus or about the alleged ability of people to recoup lost income.
It currently is the position of the Food and Drug Administration (FDA) that there are no specific products that are scientifically proven to prevent or treat coronavirus. Thus, the FTC obviously believes that marketing claims suggesting cures or treatment or misleading.
Andrew Smith, the Director of the FTC's Bureau of Consumer Protection, has stated that "MLMs and other companies that distribute products through networks of distributors are responsible for the product and earnings claims those distributors are making." He adds that "[d]uring 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 FTC warning letters give examples of claims made by the companies or their distributors in videos posted online and in social media posts. One claim touts potential earnings of $1,730 within in 10 days. Another boasts of coronavirus immunity.
The letters, and prior FTC letters about false health claims, remind recipients that unsubstantiated claims violate the FTC Act.
The most recent letters instruct the recipients to notify the FTC within 48 hours about specific actions they have taken to address FTC concerns.
While the FTC may not be able to root out all false and misleading claims of coronavirus solutions, the agency plainly is serving notice that it is on the scene and beware to those who may contemplate distribution of false claims.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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