Retail & Consumer Products Law Observer

Retail & Consumer Products Law Observer

Legal Insight for the Retail and Consumer Products Industry

Category Archives: Advertising & Product Risk Management

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Who You Gonna Call? (Just Don’t Use an Autodialer!)

Posted in Advertising & Product Risk Management
Multiple class actions have alleged violations of the Telephone Consumer Protection Act (TCPA) for use of automated dialing systems (auto-dialer). In a 2015 Order, the Federal Communications Commission (FCC) defined an auto-dialer under the TCPA to mean any device with the theoretical “capacity” to place autodialed calls, even if had the potential to be transformed… Continue Reading

Check Your Spam Filters!: CPSC Has Automated FOIA Communications

Posted in Advertising & Product Risk Management, Product Liability & Torts
You may have received an e-mail notice this week from the CPSC about the FOIA office’s new “Electronic Manufacturer Notification Collaboration Portal.”  The main purpose of the Portal is to reduce costs by using e-mail instead of snail mail for Section 6(b) and other FOIA-related notifications.  Generally, automation of this process shouldn’t result in any… Continue Reading

CPSC Reaction to Consumer Misuse – Human Factors Design Process

Posted in Advertising & Product Risk Management
Product liability suits and regulatory product defect enforcement actions associated with consumer foreseeable – and unforeseeable – misuse have become the norm. Consumer product companies can mitigate these risks by focusing on use-related hazards and user-centered designs in an effort to reduce injuries and improve the usability of products. But the real question is how… Continue Reading

FTC Targets Cryptocurrency Pyramid Schemes

Posted in Advertising & Product Risk Management
The FTC’s Consumer Protection Division has long targeted advertisements for “work-at-home,” business and investment opportunities that exaggerate the earning potential and downplay risks. Recently, the FTC announced that it filed a complaint against four individuals doing business as “Bitcoin Funding Team” in the U.S. District Court for the Southern District of Florida for deceptively advertising… Continue Reading

Is the Cambridge Analytica Scandal a Watershed Moment for the Ad-Funded Internet?

Posted in Advertising & Product Risk Management
The news that Cambridge Analytica, the shadowy, digital political consultancy, may have misused user data obtained from Facebook is reverberating throughout Washington and foreign capitals. The immediate fallout has been calls for Congressional and federal investigations into what happened. The Federal Trade Commission has taken the unusual step of publicly announcing a “non-public” investigation into… Continue Reading

Holding Agencies Accountable: Ad Agency Agrees to Pay Largest Penalty Ever for False Advertising

Posted in Advertising & Product Risk Management
In the largest-ever penalty issued against an ad agency, the Federal Trade Commission announced that Marketing Architects, Inc. (MAI) agreed to pay $2 million dollars to settle a false advertising complaint filed with the FTC and the State of Maine Attorney General’s Office. The ad agency came to the FTC’s attention after the Commission settled… Continue Reading

Pharmavite, Maker of NatureMade Omega-3 Xtra Blend Dietary Supplement, Referred to FTC After Declining to Comply with NAD Recommendation to Discontinue Absorption Claim

Posted in Advertising & Product Risk Management
The National Advertising Division, referred Pharmavite, LLC to the Federal Trade Commission after the company refused to comply with NAD’s recommendations that it discontinue its claim that its NatureMade Omega 3 Xtra Blend dietary supplement has “Nearly 4X Better Absorption* *than standard fish oil concentrate.” To substantiate its “Nearly 4X Better Absorption” claim, Pharmavite relied… Continue Reading

FTC Settles First Connected Toy Case With VTech After Massive Data Breach

Posted in Advertising & Product Risk Management
On January 8, 2018, the FTC announced settlement of its first connected toy case with VTech Electronics Ltd (“VTech”) for violating the Children’s Online Privacy Protection Act (COPPA) Rules by failing to properly collect and protect personal information about and from children and violating the FTC Act by misrepresenting its security practices. In addition to paying a… Continue Reading

Surveys Seal the Deal in Defeating Starbucks and 5 Hour Energy Class Actions

Posted in Advertising & Product Risk Management, Consumer Class Action
Surveys play an increasingly important role in consumer class actions, whether used to deny class certification, defeat plaintiffs’ allegations of consumer “deception,” or even refute damages arguments. Recently, beverage giant Starbucks Corp. defeated a proposed class action alleging that Starbucks had violated consumer protection statutes in California, Florida, and New York by uniformly filling its… Continue Reading

Five California Communities Settle Auto-Renewal Claims with Online Dating Company eHarmony for More than $2 Million

Posted in Advertising & Product Risk Management
Online dating company eHarmony will pay more than $2 million to settle a consumer protection lawsuit brought by four California counties and the city of Santa Monica. In total, the company will pay up to $1 million to California customers who enrolled in eHarmony’s automatic subscription program between March 10, 2012 and December 13, 2016… Continue Reading

ROSCA Enforcement Ahead: FTC Settles with AdoreMe for $1.38 Million

Posted in Advertising & Product Risk Management
Subscription services for everything from food delivery to beauty products to exercise gear have grown exponentially in the past five years. Such services require consumers to enroll in a program to purchase goods on a consistent basis. They typically automatically renew, often on a monthly basis, and require customers wishing to cancel to take affirmative… Continue Reading

“Do Not Resuscitate”: Lessons for Advertisers

Posted in Advertising & Product Risk Management
The DNR Tattoo Last week, the Associated Press reported the fascinating story of an unconscious man admitted in acute distress to Miami’s Jackson Memorial Hospital. The words “Do Not Resuscitate” were tattooed across his upper chest, where one would see them before engaging in chest compressions. He carried no identification, so the medical staff could… Continue Reading

Subverting Democracy, Advertising, and the Economy Through Bots

Posted in Advertising & Product Risk Management
The word “bot” is a double-entendre. It refers both to the larval stage of the bot-fly, a rather gruesome internal parasite (warning, link not for the squeamish) and to a software application that runs automated scripts on the internet in highly repetitive fashion—also with parasitic effects. Internet bots can be programmed for good or evil.… Continue Reading

Quincy Biosciences: What the decision means for advertising of health claims, and what it means to the FTC

Posted in Advertising & Product Risk Management
You may have seen the commercial on late night television. A glowing image of a human brain appears (along with a disclosure stating “dramatization”), with flashing lights pulsing through a crisscrossed mesh, depicting nerves. The voiceover intones, “Your brain is an amazing thing. But as you get older, it begins to change, causing a lack… Continue Reading

Soda Stays Safe in San Francisco

Posted in Advertising & Product Risk Management, Product Liability & Torts
Ninth Circuit Blocks Sweet Drink Warning Labels Pending Free Speech Lawsuit The Ninth Circuit dealt a blow to the war on sugar last month, calling the warning labels a San Francisco ordinance would require on sweet drinks “deceptive” and blocking the mandate on free speech grounds. As we have discussed before, cities and counties across… Continue Reading

Court Dismisses FTC’s Unfairness Claims Against D-Link

Posted in Advertising & Product Risk Management
Earlier this month, the Northern District of California dismissed FTC’s unfairness claims against D-Link, a manufacturer of routers and IP cameras, while allowing most of FTC’s claims rooted in deception to survive, suggesting that traditional false advertising actions may be FTC’s most effective means of addressing suspect data security practices. Further, the Northern District of… Continue Reading

FTC Announces First Enforcement Action Against Social Media Influencers and Updates FAQs Rejecting Common Disclosure Practices

Posted in Advertising & Product Risk Management
The FTC is closely watching influencers to remind them to clearly disclose material connections to brands. In June 2017, the Commission settled with a trampoline manufacturer for relying on misleading endorsements and, in March, the Commission sent more than 90 letters to influencers and brands to remind them to clearly disclose relationships. The FTC has… Continue Reading

CPSC Targets Retailer Home Depot in Rare Sale of Recalled Goods Civil Penalty

Posted in Advertising & Product Risk Management
Last week, the U.S. Consumer Product Safety Commission announced that Home Depot U.S.A., Inc. has entered into a settlement agreement with the agency to resolve allegations that the retailer knowingly sold and distributed recalled consumer products over a four year period. The Company will pay a civil penalty of $5.7 million. This penalty is significant… Continue Reading

Dueling Interests at CPSC and FDA “Deem” E-cigarette Battery Safety a Priority

Posted in Advertising & Product Risk Management
The regulation of e-cigarettes and other electronic nicotine delivery systems (“ENDS”) presents complex regulatory and scientific challenges. Two key federal agencies with product safety mandates and overlapping jurisdiction – the Consumer Product Safety Commission and the Food and Drug Administration – have turned their attention onto the specific area of e-cigarette battery-related fires and explosions… Continue Reading

President Trump Nominates CPSC Acting Chair Buerkle to Serve as Permanent Chair

Posted in Advertising & Product Risk Management
On Monday, President Trump nominated Ann Marie Buerkle, who has served as Acting Chair of the U.S. Consumer Product Safety Commission since February 9, 2017, to serve as permanent Chair of the Commission.  The appointment is for a term of seven years beginning on October 27, 2018 when her current term expires.  Acting Chair Buerkle’s… Continue Reading