A Federal Trade Commission investigator says FTC will continue to prioritize investigating supplement advertising claims, particularly for weight loss products, as the industry continues to experience "growing pains."

Some deceptive or misleading claims are expected when industries grow as fast as the dietary supplement market has, Rich Cleland, assistant director of FTC's Division of Advertising Practices, said.

"Whenever you have a rapidly expanding industry, you're always going to have to expect some growing pains," Cleland told "The Tan Sheet."

Cleland acknowledges recent efforts at industry self-policing, particularly the Council for Responsible Nutrition's partnership with the Council of Better Business Bureau's National Advertising Division, mark a level of "maturity."

However, the industry at large still must grow in terms of responsibility, he said.

"This child is no longer a toddler. We've been going at this - and under [the Dietary Supplement Health and Education Act] we're into our second decade - and some of these growing pains should have been worked out by now," he added.

Other FTC officials may not share Cleland's opinion of the industry, Natural Products Association's vice president of scientific and regulatory affairs, Daniel Fabricant, Ph.D., says.

"We've had many positive and constructive experiences working with the FTC. Just as one dietary supplement company doesn't speak for the entire industry, we shouldn't generalize one staffer's opinion to the entire agency," said Fabricant.

Cleland said some dietary supplement firms simply do not understand the regulations affecting the limits of their product claims before they launch ads.

"Initially what we saw was essentially a new marketing area for people and a lot of people got into this business that had no experience in marketing health products. They quite frankly didn't know what the rules were, what the laws were that applied to them."

However, other firms must know they are making unsubstantiated or misleading claims, Cleland said.

"For some of them on the face, you can hardly believe that they actually thought they had any reasonable basis to make that claim."

Weight-loss products have always been the most problematic area of supplements for FTC, and the agency does not expect that to change, according to Cleland and other FTC officials.

"I did weight-loss cases before DSHEA, before there was something called dietary supplements. Back then they were just OTC weight-loss products," Cleland said.

Weight-loss claims are "high-risk ads" for firms marketing the products, Lesley Fair, the senior attorney in FTC's Division of Consumer Education, said at a May 1 advertising law conference conducted in Washington by the American Conference Institute,

Weight-loss ads are "more likely to attract" investigators' attention, Fair said.

FTC officials "tend to give pretty clear guidance about the direction they're coming from. You don't need to be a weatherman to know which way the wind is blowing at the Federal Trade Commission," she said, adding there is "emphasis on health claims, weight-loss claims."

Ad Volume Exceeds FTC's Capacity

The number of dietary supplement claims FTC has investigated has increased steadily in the past decade. From 1996 through 2001, it investigated 47 cases, and during 2001-2005, the number grew to 76.

However, FTC estimates 40,000 supplement products are on the market and 1,000 are launched annually.

"I think what has changed are two things, and one has driven the other. What happened is that there is more mainstream marketing of dietary supplements now than there's ever been," Cleland said.

"Part of the consequence of that is because it has become such big business and has such potential to cause consumer injury where claims are misleading and deceptive, we're going to look at it very closely, subject obviously to our resource constraints."

"But it is a priority, particularly where we have products that are making either obviously false claims or claims that can't be substantiated for serious diseases. Those have been a priority for several years and they will continue to be a priority," Cleland added.

CRN's nearly $500,000 in support of NAD to increase its monitoring of dietary supplement advertising claims "is a step in the right direction" for the industry, Cleland said (¹ Also see "CRN Grants $500K To NAD For Increased Dietary Supplement Monitoring" - Pink Sheet, 25 September, 2006., p. 7).

"The FTC does not have the resources to monitor all of the dietary supplement advertising that's out there. This is an area where there is always room for more enforcement, even when it's self-regulation."

"It's pretty clear that the industry itself understands that it has a credibility problem and this is one way to address that problem," he added.

CRN also sees increasing self-regulation as key for the industry.

"We have been very supportive of FTC taking action and although we don't always agree with individual decisions we agree that being part of a regulated industry means there are regulations you have to adhere to," CRN President and CEO Steve Mister said.

"As our industry continues to mature, expecting regulation and engaging in self-regulation programs, such as what we are doing with NAD, is part of the maturing process," Mister added.

NPA is interested in scheduling ongoing talks with FTC about the industry's advertising.

"We understand that we as an industry need to work closer with the regulatory agencies that define our landscape. As the representative trade group of the largest number of natural product retailers and suppliers, we would really appreciate some type of regularly scheduled interaction or forum with the FTC to address issues they may have with the industry as well as to clarify any potential areas of confusion from our perspective," Fabricant said.

While FTC, sometimes in conjunction with FDA, has conducted educational outreach over the past 10 years to help dietary supplement firms understand advertising regulations, the industry's self-regulation is more important to its future, Cleland said.

"The CRN effort with NAD is part of that maturity, that growing maturity; sort of recognition there's a problem and taking proactive steps to deal with it."

Consumer Complaints Rare At FTC

Fair pointed out the commission actually receives few complaints from consumers related to national advertising conducted by supplement firms as well as companies in other industries. She said one reason for this is often there is no way for consumers to know whether they have received the benefits or results a product claims to provide.

"How can a consumer know whether a dietary supplement he or she is taking really is reducing the risk of cancer?" Fair said.

However, FTC launches investigations based on its own observations independent of complaints.

FTC "can certainly go ahead without consumer complaint simply because these aren't the type of things that consumers are likely to pick up the phone and dial" to inform the commission of a complaint, Fair said.

Complaints firms make about competitors' advertising also can prompt investigations. "We are careful because we understand that there may be possible mixed motivations involved," she said.

According to an FTC Division of Enforcement official, James Kohm, supplement firms often turn up in the commission's review of "multi-layer up-sells," when vendors offer multiple products to consumers responding to a sales pitch for a single product.

"We see a lot of up-selling in the dietary supplement industry," Kohm, Bureau of Consumer Protection assistant director, said at the May 1 conference.

FTC is concerned firms are misleading consumers about whether they can purchase a single product without buying additional merchandise, and about what vendor is selling which product.

"There's nothing wrong with these layers. It may very well be that you saved me some time," Kohm said.

"It's not something we want to cut off. It's something that we want to make sure that consumers understand what they're getting into," he added.

Endorsements, Testimonials Get Attention

Cleland said misleading testimonials and endorsements by firms in numerous industries "plague advertising. They're particularly problematic in dietary supplement advertising."

"We have many, many cases involving both deceptive expert endorsement and deceptive consumer endorsement. It's been an historic problem and it's been a particular problem in the marketing of weight loss products," he said.

In January, FTC requested public comments on its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," which are designed to assist businesses in conforming endorsement and testimonial advertising practices to FTC requirements. The deadline for comments is June 18 (² Also see "Disclosure Statements In Testimonial Ads Largely Ineffective – FTC Studies" - Pink Sheet, 22 January, 2007., p. 10).

The ³ announcement cited two studies showing disclosure statements for dietary supplements are largely ineffective in helping consumers understand product efficacy claims after they view testimonial advertisements.

The studies conducted in ⁴ 2003 and ⁵ 2004 measured the effects of consumer testimonials and disclosure statements on ad communication for supplements, and the second one included ads for weight-loss products and business opportunities.

Cleland said a 2002 FTC report on weight loss ads showed 195 of the 300 ads studied used testimonials.

"One in five had a testimonial of somebody losing more than 100 pounds and the rest of the numbers were equally depressing," he said.

- Malcolm Spicer (m.spicer@elsevier.com)

FTC Prioritizes Weight-Loss Claims As Industry Endures “Growing Pains”

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