June 28, 2016

deceptive-business-practiceSmartClick Media, LLC, doing business as Doctor Trusted, and its sole owner, have settled a lawsuit brought by the Federal Trade Commission (“FTC”).  The FTC had charged Doctor Trusted with deceptive business practices in violation of the Federal Trade Commission Act.

What was the nature of the deceptive business practices alleged by the FTC?

According to the FTC’s Complaint, Doctor Trusted engaged in an operation which included the following:

  • Advertising and sales of a certification service that placed “Doctor Trusted” seals and certificates on websites that offer health-related products and services;
  • The seals often included stock photos of doctors in lab coats and, when clicked, directed users to a pop-up window which contained various representations indicating that the products had been independently reviewed by doctors;
  • The certification services were marketed as a means for companies to improve their credibility and increase online sales;
  • In reality, the certification program did not involve a strict and careful evaluation by doctors of any products offered or claims advertised, but rather involved 2 freelance doctors paid to provide superficial examinations that did not involve medical expertise in any way; and
  • Independent of the certification scheme, operation of several lifestyle blogs purporting to provide unbiased information about various third party products and health-related issues without proper disclosure that it was receiving commissions and other payments in connection with the promotions.

 

The FTC’s proposed settlement will include a prohibition against future misrepresentations concerning product evaluation, review and promotion, as well as a judgment of over $600,000, which will be partially suspended upon the payment of $35,000.

 

Best Practices to Avoid a Deceptive Business Practices Lawsuit

 

As we have previously written, federal authorities and state attorneys general alike have been increasingly aggressive in investigating and prosecuting companies for deceptive advertising and marketing practices.   Marketers continually face a wide range of legal risks.  The FTC’s actions only serve to reinforce the importance of minimizing one’s risk by engaging knowledgeable legal counsel prior to undertaking a campaign to ensure that marketing practices and procedures are fully compliant with applicable laws and regulations.

If you are interested in learning more about this topic, need to review your marketing practices and procedures or if you are facing an investigation from the FTC or a state attorney general, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

 

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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