Dietary Supplement Marketer to Pay $5.5 Million to FTC for Weight Loss and Immunity Claims

Aug 12, 2010   

Weight loss, immunity, and cold and flu claims are on the radar of the Federal Trade Commission (FTC), as evidenced by last weeks $5.5 million settlement with supplement marketer, Iovate Health Sciences, U.S.A.  The FTC charged Iovate and two of its Canadian affiliates (Iovate Health Science Group, Inc. (now known as Kerr Investment Holding Corp.), and Iovate Health Sciences, Inc.) with deceptively advertising that its supplements “ Accelis and nanoSLIM “ could help consumers lose weight rapidly.  These same three companies also advertised that their Cold MD, Germ MD and Allergy MD products could treat or prevent colds, flu, allergies and hay fever, claims the FTC alleged were deceptive as well.

The FTC believed that Iovates “clinically proven” efficacy claims for the cold, flu and allergy formulas amounted to deceptive advertising.  Iovates claims that its weight loss products are “scientifically proven to speed up the metabolism,” could allow users to “lose 32 lbs fast” or lose weight at a rate of “one to two pounds per week” were similarly deceptive according to the FTC.  Additionally, the FTC found that some of the claims were deceptively delivered by actors portraying doctors, complete with white lab coats and stethoscopes; and by testimonials touting atypical weight loss results.  The FTC felt the claims were not merely deceptive and misleading but were outright false and further charged that Iovate knew of their falsity at the time the claims were being made. 

In settling with the FTC, Iovate did not admit to any wrongdoing; however, as part of the settlement, Iovate agreed that it would possess two adequate, well-controlled human clinical studies prior to making any future weight loss claim, and procure pre-approval from the U.S. Food and Drug Administration (FDA) before making any claims regarding the diagnosis, treatment, cure or prevention of any disease.

The settlement piques interest for two reasons.  First, it requires that Iovate seek FDA approval on efficacy claims.  While FDA approval can be required for certain health claims, it is an undertaking rarely required under FTC law.  Secondly, it demonstrates that the FTC is keeping a watchful eye on the supplement industry, an industry that has grown and flourished during the recent recession as many people are turning to alternative therapies and supplements rather than incurring the cost of doctors visits and allopathic medical products.