As a self-regulatory body whose work includes monitoring of dietary supplement advertisements, the National Advertising Division (NAD) wields influence with regulators in Washington.
Historically, FTC has supported self-regulatory efforts by industry, said Richard Cleland, an agency official, while commenting on NAD during The Big Natural, a recent event held in Las Vegas by the Natural Products Association (NPA).
For a decade, NAD has monitored dietary supplement ads in a partnership with the Council for Responsible Nutrition (CRN). Since the program was introduced in 2006, NAD has completed more than 250 challenges to confirm advertisements are truthful and not misleading, the CRN Foundation reported in an October 2016 news release.
Dietary supplement firms that refuse to participate in an investigation spearheaded by NAD, or comply with one of its decisions, often do so at their own peril. That’s because NAD may publicly refer a case to FTC officials, possibly leading to a formal investigation by regulators.
If a company fails to participate in an investigation, FTC generally contacts the company, Cleland explained, asking the following question. “’Would you rather participate with NAD in this non-governmental process, or would you rather participate in an investigation conducted by the FTC?’
“Frequently, when we pose the question that way, companies will go back to NAD and they’ll go through the NAD process," Cleland said, “but not always."
Added Cleland, assistant director of the Division of Advertising Practices with FTC’s Bureau of Consumer Protection: “If they don’t, or if it’s a compliance issue, we will conduct a preliminary investigation to determine whether or not the matter actually warrants further enforcement action. Once we start the investigatory phase of the process, the case is pretty much handled like any other case at the FTC."
Once the case is resolved, Cleland said, his agency generally sends a public letter to NAD, divulging how the matter has been resolved. As INSIDER previously reported, dozens of dietary supplement advertising cases have been referred by NAD to FTC, according to online summaries provided by CRN.
“FTC takes NAD referrals seriously…," Ivan Wasserman, a partner with the law firm Amin Talati Upadhye LLP, told INSIDER in a 2017 article that examined a NAD referral to FTC. The referral resulted in a court ruling against a Wyoming corporation that claimed a dietary supplement reversed or prevented gray hair.