A recent investigation by the Wall Street Journal revealed that over 4000 items for sale on Amazon were mislabeled, declared unsafe by US agencies, or all-out banned by federal regulators.  Horrifically, over 2000 of those Amazon listings were medications and children’s toys that lacked proper health and safety warnings.  Specifically, the investigators ordered and tested 10 children’s products, many promoted as “Amazon’s Choice.” Four failed tests based on federal safety standards.  Moreover, 46% of the 4152 unsafe products were fulfilled by Amazon. 

Sadly, a mislabeled product sold on Amazon was involved in the death of one consumer.  In 2014, Albert Stokes purchased a motorcycle helmet on Amazon that was listed as certified by the U.S. Department of Transportation (DOT). Subsequently, Mr. Stokes was involved in a fatal accident wherein his helmet came off. His mother sued Amazon claiming the helmet was defective, but ultimately settled for $5,000 with no admission of liability from Amazon. However, in July 2019 the National Highway Traffic Safety Administration stated that the helmet was not DOT compliant and that it had been recalled.  At that time, it was still listed as DOT compliant on Amazon.  The listing has since been removed (5 years after the accident). 

Whether you are selling lens wipes or motorcycle helmets, cheap counterfeits of your product can pose hidden dangers to consumers.  Not only does this erode your brand image, but it can also open you up to unwanted liability claims.  While Amazon is taking steps to make it easier to monitor and remove counterfeits from the platform, it is far from a perfect system. Product marketers should consult with an experienced attorney who can navigate Amazon’s platform and help ensure that their trademarks, copyrights and brand name do not appear on listings for potentially hazardous counterfeits.

According to their marketing materials, the elegantly packaged products sold by several retailers including Dillard’s, Overstock.com and Anthropologie, were “tested in the rice paddies of Southeast Asia as well as the finest locations in the Caribbean, Hamptons, and cottage country in the peak of summer,” and effectively repel mosquitoes for 2.5 hours. Further, the company claimed that the sprays and candles repel mosquitoes as effectively as 25% DEET. According the FTC’s complaint, the product website also stated that the sprays and candles were “rigorously tested at one of the world’s leading Universities” and “repels mosquitoes that may carry Zika, Dengue, Chikungunya, and Yellow Fever.” The FTC contends that none of these claims can be substantiated.

In addition to the lack of scientific evidence supporting the veracity of the products’ claims, the FTC was bugged by the fact that many of the purported impartial positive product reviews posted on the company’s Amazon storefront were, in fact, written by the owners of Mikey & Momo, as well as other individuals with a financial interest in the company.

Fortunately for Mikey and Momo, the proposed order settling the FTC’s charges does not include a monetary penalty. It does, however, prohibit the company and its owners from making any of the misrepresentations alleged in the complaint, and requires them to disclose clearly, conspicuously whether there is a connection between an endorser and the product or anyone associated with it.

Avoid the sting of the FTC by consulting with an attorney to make sure your product claims pass the smell test.

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According to the FTC complaint, the brothers advertised and sold Infinity and Olympus Pro trampolines through various websites. These e-commerce websites displayed logos and seals for the Bureau of Trampoline Review, Trampoline Safety of America, and Top Trampoline Review. As a result, consumers were led to believe that these review sites containing ratings based on safety and performance, were comprised of unbiased, expert reviews. In reality, these organizations were made up by the brothers.

Not only did the websites for these “independent” bodies promote the products being sold by the brothers, but they also made representations regarding product safety. The Trampoline Safety of America site stated the organization included structural engineers. The Bureau of Trampoline Review website stated that safety was one of the bureau’s primary focuses, and that trampolines were put through rigorous testing such as having cars dropped on them. Allegedly, the only product to pass the car test was one of the brands sold by the brothers.

This of course is not the first time that product owners have created fake review sites; however, the safety claims contained in the brothers’ websites take these reviews to a dangerous new height. Despite this, the FTC surprisingly did not impose a monetary penalty. Perhaps no injuries resulted from the brothers’ claims on the review sites, and therefore the FTC was lenient. Instead, the brothers must refrain from engaging in these deceptive practices and must provide compliance reports and remain subject to compliance monitoring. As such, the pair has already made changes to the review sites, including identifying their company as being the owner and author.

Fake review sites and false claims are very common in the consumer product industry, and should they become the focus of an investigation, a company exposes itself to hefty monetary penalties. Be sure to contact an attorney prior to making product claims or participating in review sites.

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According to the complaint, the defendants engaged in deceptive labeling practices by marketing the food as “natural” and containing “no artificial preservatives.” The ingredients at the center of the lawsuit are synthetic versions of vitamins B, C and K, as well as caramel color. Although not proven to be harmful, and present in animal and human foods, the ingredients are technically not “natural.”

The FDA regulates animal feed, including dog food. Although it has not defined the term “natural,” in human food labeling, the FDA considers “‘natural’ to mean that nothing artificial or synthetic (including all color additives regardless of source)” has been included or added to a food that “would not normally be expected to be in that food.” Further, according to an FTC publication, if companies market their products as “all natural” or “100% natural,” consumers have a right to believe they do not contain any artificial ingredients.

There has been much litigation in the last few years regarding use of the word “natural;” so much so that at the end of 2015, the FDA put out a call for comments on how to define the term. It received over 7000 responses! This probe by the FDA has had the effect of halting some, but not all, litigation. In fact, the judge presiding over a California class action lawsuit against Kraft Foods for using the term “natural cheese” to describe cheese containing artificial coloring, stated that FDA standards were not determinative of whether Kraft violated the relevant California laws; but rather, the issue is whether a reasonable consumer is likely to be deceived by the product’s packaging. The case is still pending.

These “natural” cases will be interesting to track, and it is not far-fetched to believe that if a definition is established by the FDA, the FTC and FDA may start barking up the trees of other companies engaged in similarly deceptive or misleading labeling practices.

Stay out of the dog house and treat yourself to a consultation with an attorney regarding product packaging.