FTC COVID-19 Warning Letters

The Federal Trade commission and Federal Drug Administration (FDA) issued many warning letters regarding false claims and the misbranding of products involving products promoted to treat and prevent coronavirus (COVID-19). Some of the FTC warning letters were issued jointly with FDA. Other letters were issued solely by the FTC.

An experienced FTC and FDA healthcare lawyer can advise medical companies and practices about the federal and state laws that apply to the company’s business. The attorney also helps companies understand which laws apply, what proactive measures can be taken to reduce the risk of being charged with noncompliance, and how to respond if a violation is alleged.

Joint FTC and FDA warning letters

The FTC and FDA sent seven companies warning letters that they are “allegedly selling unapproved products that may violate federal law by making deceptive or scientifically unsupported claims about the ability to treat coronavirus (COVID-19).” The FTC and FDA warning letters are the first set of warning letters by the agencies, together, regarding company claims that products and treatments are ready to treat or prevent COVID-19;. The joint letters were sent to:

1) Vital Silver,

2) Quinessence Aromatherapy Ltd.

3) N-ergetics

4) GuruNanda, LLC

5) Vivify Holistic Clinic

6) Herbal Amy LLC

7) The Jim Bakker Show

The companies advertised teas, essential oils, and colloidal silver for the ability to treat or prevent coronavirus – even though FDA asserts that there are no approved drugs, vaccines, or investigational products currently available to treat or prevent COVID-19.

Separate FTC warning letters

The FTC, according to an April 14 press release, has warned numerous companies that claims about the their products’ ability to treat and cure COVID-19 are deceptive or unsupported scientifically.

In another press release, dated April 24, 2020, the FTC sent warning letters to multi-level marketers about the health and earnings claims “they or their participants are making” regarding COVID-19. The press release announced that 10 warning letters had been sent to companies that were promoting business opportunities and “supposed health benefits” to respond to the health crisis.

Multi-level marketers and businesses that “distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making,” according to the Director of the FTC’s Bureau of Consumer Protection. During the pandemic, the FTC is examining false claims about work income opportunities, at-home jobs, and other income claims.

The warning letters discuss claims specifically made by the marketers or the distributors in online videos and in social media posts.

Examples of improper posts included:

A social media post that said, “Got the coronavirus heebeegeebees? Boost your immunity with this amazing deal!!!!”
A video statement that claimed, “there’s thousands of people that are out of work right now. They’re all looking for a way to go earn money. This is a great stimulus package, because you get to teach somebody how to go earn $1,730 literally in their first 10 days in the business.”

The warning letters were sent to the following companies:

Both Health and Earnings Claims:

Earnings Claims:

Health Claims:

Zurvita, Inc.

This set of letters is the first to target earnings claims. Prior FTC warning letters targeted false health claims. Claims about the efficacy of products must be supported by scientific evidence – otherwise the claims violate the FTC Act. The letters:

Alerted the companies as to the types of misleading or false claims that violate the FTC Act.
Referred the companies to the agency’s guidance for MLMs
Alerted the companies that they are accountable for false or misleading claims made by company representatives and company members.

The companies were given just two day to detail the steps they would take to respond to the concerns of the FTC.

FTC warning letters to VoIP Service Providers

The FTC sent a set of warning letters to 9 Voice over Internet Protocol (VoIP) service providers and entities. The letters warned the companies that “assisting and facilitating” illegal telemarketing or robocalls related to the coronavirus or COVID-19 pandemic” violates FTC law. The warning letters aim to stop companies from preying on the fears of consumers about highly contagious and deadly diseases. The Director of the FTC Bureau of Consumer Protection said:

“It’s never good business for VoIP providers and others to help telemarketers make illegal robocalls that scam people,” “But it’s especially bad when your company is helping telemarketers exploiting fears about the coronavirus to spread disinformation and perpetrate scams.”

The letters were sent to:

VoIPMax
SipJoin Holding, Corp.
iFly Communications
Third Rock Telecom
Bluetone Communications, LLC
VoIP Terminator, Inc., also known as BLMarketing
J2 Web Services, Inc.
VoxBone US LLC
Comet Media, Inc.

The FTC warning letters emphasize that a top priority of the FTC is fighting illegal telemarking – especially “stopping illegal robocalls.” The FTC press release noted:

Two cases the FTC has filed against
- James B. Christiano whose companies provided software to robocallers
- Globex Telecom, a VoIP service provider
Two Department of Justice actions taken against VoIP companies and the owners for “committing and conspiring to commit wire fraud by knowingly transmitting robocalls that impersonated federal government agencies.”
That the FTC warning letters advise the VoIP providers and companies that the FTC may file lawsuits against any seller or telemarketer that violates the agency’s Telemarketing Sales Rule (TSR). The Telemarketing Sales Rule “requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.”

Examples of actions that may be in violation of the FTC’s TSER include:

“Making a false or misleading statement to induce a consumer to buy something or contribute to a charity;
Misrepresenting a seller or telemarketer’s affiliation with any government agency
Transmitting false or deceptive caller ID numbers
Initiating pre-recorded telemarketing robocalls, unless the seller has express written permission to call
Initiating telemarketing calls to consumers whose phone numbers are on the National Do Not Call Registry, with certain exceptions.”

California marketing company agrees to preliminary order in response to FTC complaint

The FTC announced on April 28, 2020 that a marketer of “Thrive” supplements agreed to a preliminary order barring the marketer, Marc Ching, from claiming the supplements are “effective at treating, preventing, or reducing the risk of COVID-19.” The order, “pending the resolution of a parallel administrative case”, also prevents Mr. Ching, doing business as Whole Leaf Organics, from claiming that three CBD-based products are good treatments for people with cancer.

Before You Overpromise the Benefits of CBD, Know that the FTC is Watching

Both the FTC and FDA are reviewing your web and print marketing materials. If you make unsupported medical and treatment claims about your CBD promotions, you will receive a warning letter.

The FTC alleged, in its complaint in federal district court, that since December 2018, Ching had marketed and sold Thrive supplements online. The supplements consist of primarily herbal extracts and Vitamin C. Since March 2020, the FTC complaint claims that Ching began advertising that Thrive supplements as an “anti-viral wellness booster” that “treats, prevents, or reduces the risk of COVID-19.”

Ching is alleged to have falsely claimed that the benefits of Thrive are clinically proven – though there is no current scientific evidence that any drugs or products effectively treat, prevent, or cure COVID-19. The complaint also states that there is no scientific evidence to support Ching’s claims that the CBD products effectively treat cancer.

In the administrative case, the FTC “is seeking an order permanently halting the allegedly deceptive advertising for Thrive, CBD-EX, CBD-RX, and CBD-Max.” The complaint for temporary relief was filed in the US District Court for the Central District of California. The administrative complaint was approved by the Commission by a 5-0 vote. The administrative case is scheduled for January 7, 2021.

FTC warning letter to doTERRA International, LLC

On April 24, 2020, the FTC sent a warning letter to doTERRA International, LLC, a Utah company, regarding health and earnings claims related to COVID-19. The letter stated that the FTC reviewed company social posts that unlawfully advertise that some company products can treat COVID-19. The FTC asserted that the posts about COVID-19 “misrepresent that consumers who become doTERRA business opportunity participants are likely to earn substantial income. This letter is to provide you with information about laws and regulations.”

Examples of these improper claims by the company representatives or business opportunity participants include:

“… If interested to learn more or obtain oils or rollers Let me know A little extra protection can help #doterra #NursesCOVID19 #Dialysis #ImmunityBoosters #ImproveRespiratoryFunction” The text accompanied an image titled “Grocery Store Clerks, Truck Drivers, Medical Responders, Teachers, Small Businesses, Mamas, and EVERYONE else” followed by a message composed of text and images of doTERRA-brand essential oil bottles.”
“An image of doTERRA-brand peppermint and lemon essential oil bottles, accompanied by the hashtags “#covid #prevention.”
“This is to inform us all that the pH for corona virus varies from 5.5 to 8.5…. All we need to do, to beat corona virus, we need to take more of an alkaline foods that are above the above pH level of the Virus. Some of which are: Lemon… Lime… Tangerine… Orange… #covid… #doterra #doterraph #doterraphillapines.” The text accompanied an image of lemon, lime, tangerine, wild orange, and ginger doTERRA-brand essential oil bottles.

Some examples of improper earning claims include:

“For those of you working from home now, who says you ever have to go back? With a little education and a lot of uplifting support… you can take your health and your career future into your own hands.”
“Need to make extra money? Find it difficult to pay your bills? Were you laid off/ #fired? Be your own Boss w/doTERRA essential oils. Msg me to achieve financial independence #laidoff #unemployed #cantpaymybills #cantpaymyrent #student #sales #sidehustle #makemoney #stayathomemom.”

The warning later stated that it is a violation of the FTC Act, 15 U.S.C. § 41 et seq., to make false claims about the ability of any product to prevent, treat, or cure human disease- unless there is competent and reliable scientific evidence (such as properly controlled clinical trials) to substantiate the truth of the claims.

Since there is no scientifically proven product to treat the novel coronavirus, the claims that there is a valid product for treating, preventing, or curing COVID-19 are inherently false.

The Federal Trade Commission has sent a variety of warning letters regarding claims about treatments and products for COVID-19. Some letters were sent jointly with FDA. Some letters focused on telemarketing and robocalls. Other FTC letters focus on business opportunity and health claims that are false.

Contact Cohen Healthcare Law Group, PC for legal counsel on healthcare transactions, regulatory compliance, and FDA and FTC law. Our experienced healthcare & FDA attorneys advise healthcare companies and healthcare providers ranging from medical centers, to integrative and functional medicine practices, cosmetics and supplement companies, and medical device manufacturers.