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Global Evolutions

Don't be the Next Trudeau, Check Your Claims Now

<p>Kevin Trudeau's recent sentence (10 years!) related to making illegal health claims gives supplement companies a perfect reminder to double check their endorsement claims.</p>

Kevin Trudeau's recent sentence (10 years!) related to making illegal health claims gives supplement companies a perfect reminder to double check their endorsement claims.

The claims that landed Trudeau in trouble with the law this time were related to selling a weight-loss book, but Trudeau was once in trouble with the FTC for marketing supplements. Specifically, in 2004 FTC charged Trudeau with violating a 1998 order that banned him from making illegal claims when he claimed Coral Calcium Supreme could cure cancer. And we all know supplements (and to date, drugs) don't cure cancer.

Trudeau was arrested after violating the court and refusing to pay his fines, so it's unlikely one disease claim from a spokesperson could land him a decade beyond bars, but even one overzealous claim could lead to intervention from FTC, and that could lead to bad business.

For guidance on how supplement companies can correctly use endorsements and testimonials, INSIDER has turned to attorney Justin Prochnow on several occasions. Most recently, he and I discussed the issue on video at SupplySide West in November 2013.

He reminded us that FTC expects a lot from companies that use endorsements. According to FTC, a company is responsible for the claims an endorser makes. "You can’t have anyone endorsing or promoting your product with claims your company isn’t allow to say," said Prochnow, shareholder at Greenberg Traurig LLP.

While Trudeau was in trouble with FTC for years, Prochnow said FTC usually doesn't give a lot of warning before it acts, so companies shouldn’t expect a courtesy warning. Customers and the press could find out about a company's violation the same time the company learns of its infraction.

But that doesn’t mean supplement companies should forgo working with famous spokespeople or celebrity doctors for marketing. As Prochnow noted, a three-step process should keep companies in the clear with their endorsers:

  1. Talk to the spokesperson about what’s legal and illegal to say (Prochnow recommended this communication to be written down),
  2. Monitor the spokesperson to see if he is making compliant claims, and
  3. If he is making illegal claims, implement consequences, such as terminating the contract.

View the video interview with Prochnow here, and for even more, check out his April 2011  INSIDER article "Testify! Keys for the Legal Use of Testimonials and Advertisements." All of his information still stands, and is a help to companies looking to legally use endorsers.

And if, by chance, a company is sanctioned by FTC, I strongly recommend paying the fine and following the court order; it's not worth a 10-year prison term.

TAGS: Regulatory
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