Consumer Law

A tough week for Sears

Posted on June 09, 2009
After entering into a consent with the Federal Trade Commission for its collection and use of data from some of its My SHC Community members, Sears is involved in a second consent with the FTC, this time over environmental claims...

Sears was watching you

Posted on June 04, 2009
Sears settled a Federal Trade Commission complaint alleging that it failed to adequately disclose the scope of the information it collected through a downloaded software application available to members of its "My SHC Community." According to the Commission's complaint, Sears...

Hot Dog Wars

Posted on May 26, 2009
Last week Sara Lee Corp. filed suit against Kraft Foods Inc. alleging that advertising claims for its Oscar Mayer Jumbo Beef Franks are false and violate the Lanham Act. According to the complaint, Kraft promotes the product as "the 100%...

Attack Ads

Posted on May 26, 2009
According to Adage more companies are calling out their competitors in "attack ads." Recent campaigns cited by the article include Domino's claims that it beat Subway in a taste test, Campbell Soup's campaign touting the superiority of its Select Harvest...

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First Mini-Wheats, now Cheerios

Posted on May 14, 2009
It has been a bad few weeks for breakfast cereal manufacturers. First the Federal Trade Commission took Kellogg to task for making false and unsubstantiated claims for its Frosted Mini-Wheats cereal. According to the FTC's complaint, Kellogg claimed that Frosted...

FTC can seek gross revenue, not just profits

Posted on May 08, 2009
Two recent decisions held that the Federal Trade Commission can seek as restitution the full amount of loss incurred by consumers as opposed to disgorgement of defendant's profits. Federal Trade Commission v. Stefanchik, 559 F.3d 934, 931-32 (9th Cir...

CSPI v. VitaminWater

Posted on January 15, 2009
The Center for Science in the Public Interest filed a class action lawsuit against The Coca-Cola Company alleging that it misrepresents the nutritional content and health benefits of its product, VitaminWater. According to the complaint, Coca-Cola advertised and marketed VitaminWater...

FDCA preempts claims over Aquafana

Posted on December 10, 2008
Finding their claims preempted by the Food Drug and Cosmetic Act (FDCA), the United States District Court for the Southern District of New York dismissed a class action complaint against Pepsico, Inc. over the labeling of its Aquafina bottled water.....

FTC's Guides on Endorsements and Testimonials

Posted on December 01, 2008
The Federal Trade Commission is seeking comments on proposed revisions to its Guides Concerning the Use of Endorsements and Testimonials in Advertising. Endorsements and testimonials are advertising messages that consumers are likely to believe reflect the opinions, beliefs, findings, or...

Classmates are not looking for you

Posted on November 18, 2008
Wired notes that a California man filed a lawsuit against classmates.com for allegedly misrepresenting that former classmates were looking for him on line. According to the complaint, the plaintiff paid $15 for a subscription to the social networking site, which...

NAD: Green Works as good as most, for most

Posted on September 16, 2008
The National Advertising Division (NAD) recommended that The Clorox Co. (Clorox) modify unqualified parity claims for its line of Green Works household cleaning products. The Clorox Co., Green Works, (Case #4882 07/17/08). S.C. Johnson & Son, Inc. challenged a number...

Sparking a Lawsuit

Posted on September 08, 2008
The Center for Science in the Public Interest (CSPI) has filed a lawsuit against MillerCoors Brewing Company to stop it from selling its alcohol-energy drink, Sparks. The complaint alleges that MillerCoors' advertising and marketing violates the DC Consumer Protection Procedures...

False Advertising Claims by Syncsort Dismissed

Posted on July 22, 2008
In an unpublished opinion, the U.S. District Court for the District of New Jersey granted a defendant?s motion for summary judgment dismissing a false advertising claim for damages because the plaintiff did not provide any evidence that consumers relied on...

Civil Penalties for Spyware?

Posted on July 15, 2008
In testimony before the Senate Committee on Commerce, Science, and Transportation, the Deputy Director of the Federal Trade Commission's Bureau of Consumer Protection, Eileen Harrington, explained that "legislation authorizing the Commission to seek civil penalties in spyware cases could add...

FCC to examine product placement

Posted on July 01, 2008
Because of the increasing prevalence of technology such as Tivo and digital video recorders, the Federal Communications Commission believes that networks might be turning to more subtle means of advertising, such as product placement, to capture revenue...

Green Guides Workshop III

Posted on June 23, 2008
On July 15, 2008 the Federal Trade Commission will hold its third workshop related its regulatory review of the Green Guides. The focus of this workshop will be developments in environmental claims for building and textiles and the consumer perception...

FACTA class actions are over

Posted on June 04, 2008
Yesterday the President signed into law H.R. 4008, the "Credit and Debit Card Receipt Clarification Act of 2007." Now Public Law No. 110-241, the statute provides that it is not a "willful" violation of FACTA to fail to remove the...

NY Court Rules Against Dell

Posted on May 28, 2008
A New York court held that Dell engaged in a host of deceptive practices, including fraud, false advertising, and abuse debt collection practices. The lawsuit, which was filed by the New York Attorney General's office in May 2007, will now...

A "Real Beauty" Blunder (update)

Posted on May 09, 2008
Maintaining that his comments were taken out of context, Pascal Dangin and Unilever released the following statement yesterday: "The recent article published by The New Yorker incorrectly implies that I retouched the images in connection with the [2005] Dove 'real...

A 'Real Beauty' Blunder

Posted on May 08, 2008
A Business Week article says that Dove may be on the hot-seat with consumers for a recent leak about it's "Real Beauty" campaign. According to advertisement airbrush artist Pascal Dangin, the women in Dove's "Real Beauty" ads go through extensive...

FTC & wireless content costs

Posted on May 08, 2008
During yesterday's forum on mobile marketing, FTC Commissioner Jonathan Liebowitz announced plans to target wireless content providers that fail to disclose fees. He noted particular concern over messaging, video, and gaming services aimed at teens, who are quick to adopt...

Price Inflation

Posted on April 28, 2008
In a number of cases plaintiffs have successfully argued that deceptive representations have caused them economic harm because the representations gave the product "an actual value that was less than the amount they paid for the product." Illustrative of the...

Cable Companies Step into the Ring

Posted on April 28, 2008
Negative advertising has gotten a boost from cable companies such as Time Warner Cable, DirecTV, and Verizon recently. The latest advertisements from cable companies are focusing on attacking the shortcomings of their competitors rather than touting their own advantages...

Best engineered

Posted on April 15, 2008
The National Advertising Division of the Council of Better Business Bureaus (NAD) found claims by Lenovo that is PCs were the "The World's Best-Engineered PCs with the Awards to Prove It" and "The World's Best-Engineered PCs" were unsubstantiated superiority claims...

This one hurts

Posted on March 25, 2008
A jury verdict in favor of adult web site operator Impulse Media is a blow to the Federal Trade Commission's efforts to hold advertisers liable for the conduct of their affiliates. When it filed its complaint against Impulse Media (and...

Green Guides, round 2

Posted on March 20, 2008
The Federal Trade Commission will host its second workshop on the Green Guides on April 30, 2008. This workshop will address developments in green packaging claims and consumer perception of such claims. Interested parties have until April 11, 2008 to...

How many members?

Posted on March 19, 2008
Last month commercial real estate company, Costar Croup, Inc. filed a lawsuit alleging that a competitor, Loopnet, Inc. violated the federal Lanham Act by repeatedly misrepresenting the number Loopnet registered members and by deceptively associating "registered members" with "active users...

Data breach impacts 4.2 million accounts

Posted on March 18, 2008
The Boston Globe reports that Hannaford Bros. supermarket disclosed that a data breach potentially exposed the credit and debit card data of 4.2 million accounts.

Claim interpretation -- context counts

Posted on March 14, 2008
A recent decision by the District Court for the Eastern District of Wisconsin is a reminder that advertising claims must be evaluated in context and from the perspective of the intended audience, especially ads that target industry professionals rather than...

Monitor those affiliates

Posted on March 07, 2008
As part of a settlement with the Federal Trade Commission, Cyberheat agreed to pay $413,000 and monitor its affiliates. (I mentioned the Commission's action against Cyberheat in March 2007, when the Commission failed to convince a federal judge that the...

Ranking companies by ID Theft

Posted on March 04, 2008
Slashdot and the NY Times discuss a report by Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology at the University of California at Berkeley, that ranks companies by consumer ID theft complaints to the FTC.

Still no cure for the common cold

Posted on March 04, 2008
The makers of Airborne agreed to pay $23 million to settle allegations that they falsely advertised that their products would cure or prevent colds. The settlement will include refunds for people who purchased the product. According to the Center for...

Alcoholic Energy Drinks Get Unwanted Attention

Posted on February 21, 2008
According to the WSJ, a number of state Attorneys General have requested documents from Anheuser-Busch and Miller Brewing regarding their marketing of caffeinated alcoholic drinks. The states have had issues with the marketing of alcoholic beverages (see post here) and the marketing of energy drinks (see post here), so it is no surprise that they are looking into the marketing of alcoholic energy drinks...

What's in your milk?

Posted on February 07, 2008
ABC news reports on the battle between a group of farmers backed by Monsanto and another group of farmers supported by Ben & Jerry's over whether dairies can label milk "rBST Free."  For over a decade Ben & Jerry's has labeled its products as free of recombinant bovine somatotropin, or rBST, also known as recombinant bovine growth hormone, or rBGH...

FTC to host workshop on M-commerce

Posted on February 06, 2008
Details are a bit thin right now but the workshop will be held May 6-7 at the FTC Conference Center in  Washington DC. Topics will include: The use of mobile-messaging services as instruments of M-commerce; Consumers? ability to control mobile applications; The adaptation of advertising to mobile devices, including the challenges presented by small screen disclosures; M-commerce practices targeting children and teens; Industry best practices in preventing fraud, disclosing costs, and resolving billing disputes; Evolving security threats and solutions; and Next-generation products and services...

Abercrombie & Fitch -- obscene for a day

Posted on February 05, 2008
According to the Virginia-Pilot, Virginia Beach plans to drop obscenity charges against an Abercrombie & Fitch manager and return to the store two promotional photos that police confiscated over the weekend.  The photos that caused the stir are below...

Invoice ? advertising

Posted on January 30, 2008
The U.S. District Court for the Northern District of Illinois recently held that an invoice accompanying a concrete curing blanket was not commercial advertising for purposes of a false advertising claim under the Lanham Act. Midwest Canvas Corp. v. Commonwealth Canvas, Inc...

There's a perfect job for everyone

Posted on January 30, 2008

Truncate card numbers and delete expiration dates

Posted on January 29, 2008
In the first decision I am aware of on the issue, the U.S. District Court for the Western District of Pennsylvania applied the primary provision of the Fair and Accurate Credit Transaction Act (FACTA) to in-box receipts provided as part of a mail order transaction...

Dannon sued over 'probiotic' yogurt claims

Posted on January 25, 2008
According to Reuters, a class action lawsuit was filed earlier this week alleging that Dannon Co. Inc. falsely advertised that its Activia, Activia Lite and DanActive products were "clinically" and "scientifically" "proven" to have health benefits that other yogurts do not...

Drug Makers Yank Vytorin TV Ads

Posted on January 23, 2008
According to Adage, Merck & Co. and Schering-Plough Corp. have yanked the popular "two sources" TV advertising campaign for cholesterol-lowering drug Vytorin.  Apparently this is the result of a 2006 study showing that Vytorin does not reduce plaque in arteries as claimed...

FTC seeks comments on credit freeze statutes

Posted on January 21, 2008
The Federal Trade Commission is seeking comments on the effectiveness of state credit freeze statutes.  In an effort to prevent identity theft thirty-nine states and the District of Columbia have enacted statutes that allow consumers to prevent consumer reporting agencies from releasing consumer reports (credit reports) until the freeze is lifted...

Like no other

Posted on January 21, 2008

Life is good, being hacked is not

Posted on January 17, 2008
Apparel retailers Life Is Good, Inc. and Life is Good Retail, Inc. settled Federal Trade Commission (FTC) charges that they misrepresented their security and privacy policies.  According to the FTC, the claims that the retailers were "committed to maintaining" customer privacy and "all information is kept in a secure file" were deceptive because credit card information was stored in unencrypted text files and the Life Is Good web site was vulnerable to SQL injection attacks...

FTC affirmed in Q-Ray

Posted on January 15, 2008
The Seventh Circuit has upheld a district court ruling requiring marketers of the "Q-Ray Ionized Bracelet"�� to give up almost $16 million in net profits.  The ten-page decision is entertaining and includes some points on advertising substantiation that are worth reading...

People are tired of privacy/security breaches

Posted on January 09, 2008
Consumers are tired of the having their data exploited or compromised.  And, as this article from BusinessWeek make clear, they are increasingly voicing their displeasure through lawsuits and coordinated complaints. Recently Sears was hit with both after customers learned that it exposed their purchase histories and the CA Security Advisor Blog walked readers through how Sears distributed Spyware to consumers that joined its SHC Community...

Summary of FTC's Unfairness and Deception authority

Posted on January 02, 2008
The Federal Trade Commission submitted comments to the Office of Thrift Supervision to help that agency assess whether it should expand its prohibitions over unfair and deceptive practices.  The 26-page document is an excellent summary of the FTC's authority to proscribe and prosecute unfair and deceptive practices...

FDA to review evidence behind certain health claims

Posted on December 26, 2007
The Food & Drug Administration is requesting comments on its intent to reevaluate the evidence supporting its decision to allow certain health claims.  A copy of the federal register notice is here.

Proposed Online Behavioral Advertising Privacy Principles

Posted on December 20, 2007
Federal Trade Commission staff is requesting comments on their just released Proposed Online Behavioral Advertising Privacy Principles. The proposed principles were developed as a result of a recent FTC workshop addressing technology and a town hall addressing behavioral marketing...

$31.5 million for gambling ads

Posted on December 19, 2007
According to the AP, Microsoft, Google, and Yahoo have agreed to pay a total of $31.5 million to settle charges that they accepted money for ads promoting illegal gambling.  Microsoft will pay $21 million, Yahoo $7.5 million, and Google the balance...

Is it a survey or a sweepstakes?

Posted on December 18, 2007
According to Business Week, this will be one issue in a lawsuit by Philips Electronics against Procter & Gamble Co. over P&G's claims for its Pulsonic electric shaver.   According the lawsuit P&G's claim that 9 out of 10 men polled in a Men's Health survey said that the Pulsonic was the "best electric shaver they ever tried" was based on a sweepstakes where men were given a free shaver and not an actual survey...

"A" for effort. . .

Posted on December 06, 2007
According to AdAge, McDonald's is advertising on report-cards.  In exchange for picking up the cost of printing report-cards, about $1,600, Seminole County, Florida is allowing McDonald's to put a Happy Meal coupon on the report-card jacket.  To qualify for the free Happy Meal, the child must present his or her report-card showing all A's and B's or two or fewer absences...

IBM's hot lawsuit

Posted on December 05, 2007
IBM has filed a lawsuit in the Northern District Ohio against Shentech alleging false advertising, trademark infringement and deceptive trade practices. The suit comes as a result of IBM's recent discovery that Shentech has been manufacturing and marketing laptop batteries falsely branded as "IBM" batteries...

Green Guide Review

Posted on November 28, 2007
The FTC is going to review its  environmental marketing guidelines, or "Green Guides."  While the review was scheduled to begin in 2009, the FTC has decided to speed it up because of the current climate.  The first step is a workshop on January 8, 2008...