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Case #7

Sensa

Case #5 & #6

Sensa is a weight-loss supplement that is added to food to help one become more full to eventually lose more weight. It has a net-worth of around $364 million.

New Balance and Sketchers

  • New Balance made claims that "the shoes increase muscle activation and calorie burn." New Balance is creating "false, misleading, and reasonably likely to deceive the public."
  • Studies found that the sneakers are nothing special compared to other shoes and could may even cause injury.

$46.5 million in settlement charges

The FTC filed a lawsuit against them because of the false claims that the endorser made. Dr. Hirsch "who conducted two of the studies cited in the ads and wrote a promotional book about Sensa – gave expert endorsements that were not supported by scientific evidence, and provided the means for the other defendants to deceive consumers."

  • 5 million in the New Balance lawsuit settlement
  • 40 million for Sketchers Shapeups settlement

Sketchers "Shapeups" claimed that the shoes would help weight loss and tone muscles. They not only claimed that but claimed that Shapeups would help cardiovascular health. Sketchers had no supported research to backup these claims. They are refrained from making claims without correct research and scientific proof.

Case #8

HCG Diet

HCG Diet is a weight-loss supplement that provides numerous different products that aid in losing weight.

  • They were under investigation with the FTC after falsely advertising a extreme weight loss claim. There once again, there were no resources or studies to claim these advertisements. The marketer that has been endorsing these products were actually mislabeled drugs according to the FTC which is completely illegal.
  • Have a revenue of $13 million

Case #2 & #3

Case #4: Airborne

Kellogg has had two major cases in which the FTC has fined them for false advertisements.

1.) Rice Krispies: Kellogg claimed that by eating Rice Krispies children can get "25% daily value of antioxidants and nutrients- Vitamins A, B, C and E."

2.) Frosted Mini Wheates: Kellogg claimed that "cereal improved kids' attentiveness by nearly 20%". The FTC later found that their study was inaccurate and discovered that "the clinical studies showed that only 1-in-9 kids had that improvement-half of the kids were not affected at all."

  • Since the settlements of both of these cases, the court has decided to enforce scientific studies before advertising false information on food.

Airborne

  • If Kellogg uses deceptive advertising again, they could be fined up to $16,000 by the FTC
  • The FTC is closely watching Kellogg since they had not only 1 brand but 2 brands use deceptive advertising

What is Deceptive Advertising?

  • Airborne claimed that their medicine would "help ward off harmful bacteria and germs, preventing everyday ailments like flue and common cold".
  • Airborne had no scientific studies that proved their claim stated above. It did not meet the standards that CSPI (Center for Science and Public Interest) makes.
  • Cases like these show that companies need scientific proof before making advertising claims that are not true.

Deceptive advertising is when the advertisement or promotion is false and may mislead the customer.

  • 23.3 million in class-action lawsuit settlement

Solutions

Operation Failed Resolution:

The FTC is trying to stop this issue of false advertising and misleading claims especially including "weight-loss and slimmer bodies".

  • One thing that they are doing is requiring companies that were in a lawsuit with this issue to provide research and studies to prove that their claims are true.
  • I think that they should personally have a requirement that companies who made advertising claims need to back it up with research before it goes out on the market. Even though there are millions of products that go out each year, it would stop misleading consumers who are using these products.

Case #1

ACTIVIA YOGURT

  • The claims against Dannon were because they falsely advertised saying that Activia was "clinically and scientifically proven to regulate digestion and boost immune systems" when there were no studies proving this.

Works Cited

  • "Yet, despite the claims, a judge in Cleveland this week says Dannon must pay consumers up to $45 million in damages under the terms of a class action settlement, reached in federal court. The agreement also calls for Dannon to change its health claims for Activia and DanActive."
  • $45 million in damages
  • Consumers can receive up to a $100 rebate
  • Even did a TV campaign AD with celebrity Jamie Lee Curtis

  • Though Dannon refuses to believe that the courts claims aren't true, they have deceived numerous customers in believing that Activia yogurt is helping digestion even though it is just like any other yogurt.

http://www.ftc.gov/sites/default/files/documents/cases/140107hcgcmpt.pdf

http://www.ftc.gov/news-events/press-releases/2014/01/sensa-three-other-marketers-fad-weight-loss-products-settle-ftc

http://abcnews.go.com/Business/dannon-settles-lawsuit/story?id=9950269

http://thechart.blogs.cnn.com/2010/06/04/kellogg-settles-rice-krispies-false-ad-case/

http://www.npr.org/templates/story/story.php?storyId=87937907

http://www.nbcnews.com/id/36476797/ns/business-us_business/t/new-balance-sidesteps-ftc-ad-rules/

http://www.ftc.gov/news-events/press-releases/2012/05/skechers-will-pay-40-million-settle-ftc-charges-it-deceived

Deceptive Advertising

"Clinically & Scientifically Proven" Deceptions

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