Brain Claims Stimulate Focus (and Action) at the FTC

It’s no secret that success – and even survival – in today’s uber-competitive world hinge on attainment of a quality education, lifelong learning and skill building, and the capable mental functioning of older Americans as they face longer lives and working years. Among the Baby Boomer generation, the writer Michael Kinsley says the new competition is not longevity per se, but who can keep their “marbles” the longest. Responding to this new reality (or anxiety), the marketplace naturally has generated a plethora of educational and “cognitive” products aimed at parents seeking a mental leg up for their children, millennials vying for any edge in a brutal job market, and aging adults trying to stay sharp and relevant in an era of dizzying economic and technological change.

The Federal Trade Commission (FTC) began to recognize this trend a while ago, and responded with warning letters and the occasional enforcement action to rein in overhyped “brain” claims. Lately, as the prevalence of “brain health” offerings has continued to rise, so has the FTC’s interest in the truth of the claims made for them. FTC Chair Edith Ramirez recently announced that “cognitive” claims are now an enforcement focus of the agency, and – in just the past four months – the FTC has issued two settlements directed at them.

The first, in June, with i-Health and Martek Biosciences, resolved claims that their BrainStrong Adult dietary supplement would improve adult memory and prevent cognitive decline. The FTC alleged that the representations included an “establishment” claim that these benefits were clinically proven, a claim that was not borne out by the study cited in their ads. The settlement requires that memory and cognitive-decline prevention claims be supported by controlled clinical human testing and that all other health claims meet the FTC’s more general substantiation standard of “competent and reliable scientific evidence.” The settlement is with the companies only and not their principals. The firms are not required to pay money and are not subject to an ongoing compliance-reporting requirement.

The second settlement, issued last month, is with the educational services company WordSmart and resolves allegations that it deceptively advertised to parents of students, including an infomercial featuring Jeopardy host Alex Trebek. The allegedly false claims included promises that by using WordSmart for a certain number of hours, students would improve their GPAs by at least one point, would improve their SAT, ACT, GRE and GMAT scores by specific and substantial amounts, and would improve IQ scores. The company claimed that these results were shown in clinical trials. The FTC complaint also alleges Do-Not-Call violations under its Telemarketing Sales Rule (TSR) and broken refund promises.

While WordSmart made claims based on studies, its settlement, unlike that for BrainStrong Adult, does not require clinical human testing for educational claims but only compliance with the more flexible general standard of competent and reliable scientific evidence. On the other hand – and probably because the company was accused not only of false advertising but also telemarketing and refund violations – the settlement also includes the president, requires an “ability to pay” payment of $147,400 on a suspended judgment of $18.7 million, and imposes a 15-year compliance reporting requirement.

The lower substantiation standard for WordSmart may reflect the fact that its products are educational programs and not dietary supplements, for which the FTC typically requires clinical human testing. That said, the “competent and reliable” standard can mandate clinical testing for cognitive program claims if deemed the prevailing standard of proof by experts. Accordingly, marketers of educational and cognitive programs, as well as supplements, need to educate themselves on the meaning of this standard and be careful that their claims are backed by the requisite type and level of substantiation.

They, along with brain health supplement marketers, also should appreciate the implications of the money judgment against WordSmart. While it isn’t the first time a “brain” product marketer has been ordered to pay the FTC for its advertising missteps, it almost certainly will not be the last given the higher position brain claims now occupy on the FTC priority list.

Talking about Direct Response, FTC, Online Marketing



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