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February 2011

Feds Crack Down on Deceptive Product Ads
Does Actress Jamie Lee Curtis Know
What She’s Talking About?

Readers regularly ask me about advertisers’ claims that their products are somehow something special and wonder if the federal or state government reviews the advertising for its truthfulness. My response, until very recently, was that the federal government was doing very little in this area despite the significant potential for consumer harm. I also noted that the Wisconsin Bureau of Consumer Protection used to actively review advertising claims if consumers challenged their validity. However, this activity largely ceased due to budget and staffing cuts.

In the latter part of 2010, the Federal Trade Commission (FTC) sent a warning shot of sorts to advertisers that it would actively review advertising to determine if it was deceptive and contained exaggerated health claims. One December 2010 warning shot came in the form of FTC charges against The Dannon Company, Inc., the maker of Activia yogurt and DanActive dairy drink. You probably saw the ads on television where actress Jamie Lee Curtis claimed that one daily serving of Activia would relieve irregularity. In other ads, the company claimed DanActive helped people avoid catching colds or the flu. The commercials included language that the claims were backed by scientific data. Unfortunately for consumers who bought the products based on these claims, the claims were found by the FTC to be untrue.

FTC Chairman Jon Leibowitz announced the FTC settlement with Dannon on December 15, 2010, by stating, “These types of misleading claims are enough to give consumers indigestion. Consumers want, and are entitled to, accurate information when it comes to their health. Companies like Dannon shouldn’t exaggerate the strength of scientific support for their products.”

Earlier in 2010, the FTC announced that Walgreens was paying nearly $6 million to settle deceptive advertising charges on its “Wal-born” dietary supplements because the FTC found that its claims that the supplements could prevent colds, fight germs, and boost the immune system were “baseless.”

Wal-born is similar to another product, “Airborne” that I have seen marketed in a number of stores across Wisconsin. According to Lydia Barnes, the FTC’s director of the Bureau of Consumer Protection, the FTC fined Airborne Health nearly $30 million, including restitution to consumers because, “There is no credible evidence that Airborne products, taken as directed, will reduce the severity or duration of colds, or provide any tangible benefit for people who are exposed to germs in crowded places” like airports, offices, or schools.

Consumer advocates believe the FTC’s advertising review is long overdue. I expect the FTC will continue this type of enforcement activity in 2011.

Order Your Free Credit Reports Now

Now is a great time to check your credit score. Start by ordering your free credit report from each of the three major credit-reporting agencies—TransUnion, Experian, and Equifax—by going to www.annualcreditreport.com on the web or by calling toll-free 1-877-322-8228. Carefully check the report and follow the correction process outlined by the credit-reporting agency if you find errors. As I have noted in past “Consumer Checkpoint” columns, wrong information could have a significant impact on your credit score, your ability to obtain a loan, or the best loan rates and terms. Beware of sites such as www.freecreditreport.com that, despite its name, will charge you for credit-related services.

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