Class actions following a product recall often focus on what the company allegedly knew before its products were taken off the market. But this is not always the case. A company can also come under fire for its actions after the recall and, specifically, what recourse it offers to consumers of recalled products.

On October 5, 2021, the U.S. Food and Drug Administration (“FDA”) alerted the public of a manufacturing issue with certain lots of Ellume USA LLC’s (“Ellume”) COVID-19 Home Tests that had could lead to false positive results, and several weeks later, the FDA announced a Class I recall of these tests based on the higher-than-acceptable false positive test result. When it comes to COVID-19, a false positive could lead to delayed diagnosis and treatment of the actual cause of illness; further spread of COVID 19 when presumed positive people are grouped based on false test results; unnecessary COVID-19 treatment from health care providers, such as antiviral treatment, convalescent plasma, or monoclonal antibody treatment, which can result in side effects; disregard for the recommended precautions against COVID-19, including vaccination; and isolation, monitoring household or close contacts for symptoms, limiting contact with family or friends, and missing school or work.
Continue Reading Recall Litigation Report: Consumers Bring Class Action Lawsuit Against Ellume Refusing to Refund Recalled COVID-19 Home Tests

The FTC kicked off the week with a fresh batch of warning letters and followed this up with a pair of complaints related to deceptive marketing. Just in time for the busiest part of tax season, the FTC has filed administrative and federal complaints against Intuit, manufacturers of the popular TurboTax software. The Commission also entered into a record-breaking settlement with a multistate car dealer over alleged deceptive sales tactics, some of which were racially discriminatory. Finally, action in the Senate this week indicates that the long-vacant fifth Commissioner position may finally fill. These stories and more after the jump.
Continue Reading FTC Updates (March 28 – April 1, 2022)

The FTC’s Bureau of Consumer Protection issued a number of press releases regarding advertising and marketing practices in the fashion, finance, and the dietary supplement industries. The agency finalized a settlement over false and suppressed endorsement reviews. It also obtained injunctions over allegations ranging from false claims of removing negative information from credit reports to false health claims related to dissolvable film strips. The Commission also proactively issued warning letters to companies allegedly selling and advertising COVID-19 treatments.
Continue Reading FTC Updates (March 21-25, 2022)

Monday, February 28, 2022

Bureau of Consumer Protection: Credit Card Debt Fraud

  • The FTC has permanently banned a group of alleged scammers from the debt relief industry and has imposed a monetary judgment of $5.3 million. The ban and judgment stem from a settlement related to a lawsuit in which the Commission and the Florida Office of the Attorney General alleged that the defendants tricked seniors and financially distressed consumers into signing up for a debt relief scheme by “bombarding” them with telemarketing calls. Under the alleged scheme, the defendants falsely claimed that consumers could save thousands of dollars in credit card interest, when in reality the defendants did little more than collect upfront fees from consumers. The Commission voted unanimously to approve the stipulated final order based on the settlement.


Continue Reading FTC Updates (February 28-March 4, 2022)

The emergence of different COVID-19 variants and the corresponding surge in COVID-19 cases brings with it an increased demand for COVID-19 tests, particularly those that offer immediate results and can be done from the comfort of home. Unfortunately, like many other products on the market, at-home COVID tests are not immune to false claims or false results.

Earlier this month, the U.S. Food and Drug Administration (“FDA”) announced a Class I recall of at-home COVID-19 rapid antigen tests manufactured by E25Bio Inc. According to the FDA, E25Bio marketed and distributed its SARS-CoV-2 Antigen Test Kits (“E25Bio Tests”) to customers throughout the United States without authorization, clearance, or approval from the FDA and with insufficient data demonstrating that the E25Bio Tests performed accurately. Rapid antigen tests are designed to detect proteins called antigens from the SARS-CoV-2 virus in patient samples. And according to the FDA, the E25Bio Tests contained inaccurate claims and instructions, including a statement misrepresenting the test as FDA-authorized.
Continue Reading Recall Litigation Report: E25Bio Inc. COVID-19 Rapid Antigen Tests

Monday, January 31, 2022

Consumer Protection: Privacy & Facial Recognition

  • FTC Commissioner Christine Wilson issued a series of letters to Senators Ron Wyden, Maria Cantwell, and Roger Wicker as well as House of Representatives members Jan Schakowsky, Cathy McMorris Rodgers, and Gus Bilirakis to request review of a proposed contract between the IRS and ID.me, an identity verification software company. Ms. Wilson’s letters highlight a recent Washington Post article predicting that taxpayers may have to scan their faces in order to access their IRS tax accounts. She also expresses concerns that ID.me’s software would not adequately protect the privacy of taxpayer records and could cause other harms, referencing a 2019 hack of the U.S. Customs and Border Patrol database, which exposed thousands of photos of Americans. Commissioner Wilson notes that the recipients of her letters are leaders on privacy issues in the House and Senate, and she offered the FTC’s assistance with this request.


Continue Reading FTC Updates (January 31-February 4, 2022)

Tuesday, January 18, 2022

Bureau of Consumer Protection: Credit and Finance

  • The Commission is returning over $10 million to consumers who were charged hidden fees by online lender LendingClub Corporation. The disbursement stems from the FTC’s 2018 lawsuit against the corporation, in which the agency alleged that LendingClub falsely promised loan applicants that they would receive a specific loan amount with no hidden fees, when in fact the company deducted hidden up-front fees from the loans. The FTC is sending refunds to 15,748 customers who complained to the company or the FTC about the fees; the agency will also be reaching out to additional Lending Club customers who repaid loans during the period at issue. This order predates the FTC’s loss of its ability to obtain equitable monetary relief in federal court for consumers following an April 22, 2021 Supreme Court decision. Congress has not yet acted on the FTC’s request to reinstate this power.


Continue Reading FTC Updates (January 17–21, 2022)

A perfect storm of unprecedented stress on the global supply chain from the continuing COVID-19 pandemic coupled with the promise of increased FCPA enforcement by U.S. regulators makes this an opportune time for retailers to take stock of changes to their corruption risk profile and ensure that they adjust their compliance programs accordingly.
Continue Reading Supply Chain Pressures Trigger Escalating FCPA Risks — Impact on Retailers

On November 4, 2021, the Occupational Safety and Health Administration (“OSHA”) released its much-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to ensure that their employees are either vaccinated by January 4, 2022, or submit to weekly testing.  According to OSHA, employees who are unvaccinated face a “grave danger” from COVID-19, including the more contagious Delta variant.  The ETS notes that COVID-19 is highly transmissible—particularly in workplaces where multiple people interact throughout the day often for extended periods of time—and exposure to COVID-19 can result in death or illness, with some individuals experiencing long-term health complications.  OSHA has determined that vaccination is the most effective way to protect these employees.
Continue Reading OSHA Publishes Vaccine Requirements for Employers with 100 or More Employees

As the world continues to settle into its new normal regulators have so too. Recently, State Attorneys General (AGs) are increasingly focused on several specific enforcement priorities, including (1) price gouging; (2) privacy concerns; (3) antitrust litigation; and (4) harmful substances in products and environmental issues. Many of these priorities have gained prominence in the midst of the COVID-19 pandemic.
Continue Reading Enforcement in the New Normal: Recent Trends in State AG Enforcement