FTC Beat
Aug 14
2014

$3.5 Million Cactus Juice Settlement Should be a Warning to Advertisers

iStock_000038945684Small

In this health-conscious age, consumers are always on the lookout for new products which will improve wellness and quality of life.  Marketers attuned to this trend may be tempted to increase sales by extolling the virtues of their products, even if health claims are unsubstantiated by scientific testing.  A recent FTC case, however, demonstrates the price that advertisers pay for overstating health claims.

The FTC filed a case against TriVita Inc., a dietary supplement company, for its marketing of the Nopalea cactus juice drink.  The beverage was widely advertised in television infomercials and online as an “anti-inflammatory wellness drink.”  Nopalea includes juice from the nopal cactus, also known as the “prickly pear.” TriVita’s “Chief Science Officer” stated that the nopal cactus is proven to reduce inflammation, which he linked to Alzheimer’s disease, allergies, diabetes, and heart disease.  TriVita sold each 32-ounce bottle of Nopalea for $39.99, plus shipping and handling.

According to the FTC’s complaint, the Nopalea infomercial was one of the most frequently aired commercials in the United States. The ads stated that the juice would relieve pain, reduce swelling in joints and muscles, and improve breathing.  Infomercials featured “customer testimonials” in which individuals stated that Nopalea helped relieve them of symptoms of a wide variety of conditions, including inflammation, chronic pain, respiratory conditions, and skin conditions.  However, the FTC alleged that these individuals were paid for their endorsements, a fact not sufficiently disclosed in the advertisements.  When customers called the toll-free number advertised, sales representatives told customers that Nopalea would make them “pain-free,” according to the FTC’s complaint.  The health representations had not been substantiated with scientific studies at the time they were made.

The FTC filed its complaint and request for permanent injunction on July 10, 2014.  On July 11, the FTC filed a stipulated settlement order in which TriVita agreed to forfeit $3.5 million to the FTC. The order prohibits the defendants from marketing Nopal cactus products using unsubstantiated or misleading health claims, and from using paid endorsers unless any material connection between the individual and the company is clearly and prominently disclosed.

The multi-million dollar settlement in this case should serve as a warning to marketers who are tempted to overstate health claims in order to generate traffic and sales.  The FTC takes health claims seriously and reviews health-related ads with extra scrutiny, so specific claims should only be made when supported by solid, scientific proof, and any paid testimonials should be clearly disclosed.  As the cactus juice company learned, failure to comply with these standards will lead to a prickly situation.

 

 

Ifrah Law is a leading white-collar criminal defense firm that focuses on internet advertising.

related practices at ifrah law:
Internet Advertising
Leave a Comment
Subscribe to Comments

Connect with Us Share

About Ifrah Law

FTC Beat is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

Visit the Ifrah Law Firm website

Popular Posts