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    Federal Trade Commission warning re tenant screening — intended for landlords, but tenants should read

    Monday, November 28th, 2016

    Screening tenants? Check out the FTC’s new guidance

    Using background checks to screen tenants? Or maybe your company provides those background checks to landlords? Make sure you’re complying with the Fair Credit Reporting Act (FCRA). The FTC’s new guidance for landlords and for tenant background screening companies can help.

    What do landlords need to know?

    Landlords must take certain steps before getting a consumer report and after taking an adverse action based on the report. A consumer report can include a credit report, a rental history report or a criminal history report. Landlords can only get consumer reports if they have a “permissible purpose,” like tenant screening. Before you get a consumer report, you must certify to the company providing the report that you’ll use the report only for housing purposes.

    If you, as a landlord, take an adverse action against a tenant or rental applicant, then you must give notice – orally, in writing or electronically. An adverse action could include denying a lease, requiring a co-signor, or requiring higher rent than for another applicant. The FTC’s guidance has more examples of when an adverse action notice is required. When you send an adverse action notice, it must include the contact information for the company who supplied the report and an explanation of the right to dispute the report.

    What should tenant background screening companies keep in mind?

    Even if you don’t think of your company as a consumer reporting agency, it may be one if it provides information about people to landlords for use in housing decisions. Background screening reports provided by your company are covered by the FCRA if they’re used to help decide eligibility for housing and include information “bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”

    If your tenant background screening company is covered by the FCRA, then you have four main requirements:

    • Follow reasonable procedures to ensure accuracy.
    • Get certifications from your clients.
    • Provide your clients with information about the FCRA.
    • Honor the rights of applicants and tenants.

    The new guidance includes details about each of these requirements, as well as a handy chart of key FCRA provisions.

    Whether you’re a landlord or a screening company, when you’re done using a consumer report, you must securely dispose of it. For more information, read Disposing of Consumer Report Information? Rule Tells How.

    Share these resources – and the FTC’s Credit Reporting and Human Resources portals – with others in your company.

     

    Federal Communications Commission warning re robotexts

    Friday, November 25th, 2016

    ROBOTEXT CONSUMER PROTECTION

     

    TEXT MESSAGE SENDERS MUST COMPLY WITH

    THE TELEPHONE CONSUMER PROTECTION ACT

    The FCC’s Enforcement Bureau issues this Advisory to promote understanding of the clear limits on the use of autodialed text messages, known as “robotexts.”  The FCC is committed to protecting consumers from harassing, intrusive, illegal, and unwanted robotexts to cell phones and other mobile devices.

    The FCC has stated that the restrictions on making autodialed calls to cell phones encompass both voice calls and texts.[1]  Accordingly, text messages sent to cell phones using any automatic telephone dialing system are subject to the Telephone Consumer Protection Act of 1991 (“TCPA”).[2]  The term “automatic telephone dialing system” (or “autodialer”) covers any equipment that has the capacity to store or produce numbers to be dialed and dial them without human intervention but does not need to have the present ability to do so.[3]

    The TCPA places limits on autodialed calls and prerecorded- or artificial-voice[4] calls to wireless numbers; emergency numbers; guest or patient rooms at hospitals, health care facilities, elderly homes, or similar establishments; and to any service for which the called party is charged for the call.[5]  The FCC’s corresponding rules[6] restrict the use of prerecorded-voice calls and automatic telephone dialing systems, including those that deliver robotexts.[7]  The FCC’s Enforcement Bureau will rigorously enforce the important consumer protections in the TCPA and our corresponding rules.  We expect this Advisory will facilitate compliance with the law and rules by those who initiate robotexts to mobile devices.

    Restrictions on Robotexts.  The TCPA prohibits autodialed calls or text messages, as well as prerecorded calls, unless made with the prior express consent of the called party, to any telephone number assigned to a cell phone or other mobile device (such as a pager), unless the calls or text messages are:  (1) made for emergency purposes; (2) free to the end user and have been exempted by the Commission, subject to conditions prescribed to protect consumer privacy rights; or (3) made solely to collect debts “owed to or guaranteed by the United States.”[8]

    Consumer Consent.  Those contending that they have prior express consent to make robotexts to mobile devices have the burden of proving that they obtained such consent.[9]  This includes text messages from text messaging apps and Internet-to-phone text messaging where the technology meets the statutory definition of an autodialer.[10]  The fact that a consumer’s wireless number is in the contact list of another person’s wireless phone does not, by itself, demonstrate consent to receive robotexts.[11]  Further, recipients may revoke their consent at any time using any reasonable method.[12]  When a recipient of an autodialed text has revoked consent to receive future robotexts, the text sender may immediately send one final autodialed text to confirm the recipient’s opt-out request.[13]

    Advertising Robotexts.  Prior express written consent is required for autodialed texts that include or introduce an advertisement except in certain limited circumstances.[14]  Even if a person has provided such consent, however, his or her later opt-out request requires the sender to stop sending text advertisements.[15]

    Robotexts to Reassigned Wireless Numbers.  The Commission has determined that when a caller reasonably relies on prior express consent to robocall or robotext a wireless number and does not discover that the number has been reassigned to another party prior to making the call or text, the caller is not liable for the first call or text going to the called party who did not provide consent.[16]  They are, however, liable for any continued calls or text messages to a reassigned number after the initial call or text, regardless of whether or when they learn of the reassignment.[17]

    Enforcement.  Robotext violations are subject to enforcement by the FCC, including forfeiture penalties up to $18,936 per violation,[18] and state enforcement agencies.

    Need More Information?  Media inquiries should be directed to Will Wiquist at (202) 418-0509 or will.wiquist@fcc.gov. Information about the Telephone Consumer Protection Act is available here: https://www.fcc.gov/general/telemarketing-and-robocalls.  For general information on the FCC, you can contact the FCC at 1-888-CALL-FCC (1-888-225-5322) or visit our website at www.fcc.gov.

    Consumer complaints.  To file a complaint with the FCC about a robotext, visit consumercomplaints.fcc.gov or call (888) CALL-FCC.    

    To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Issued by: Chief, Enforcement Bureau

    [1] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd 14014, 14115, para. 165 (2003).

    [2] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, 30 FCC Rcd 7961, 7978, 8017, paras. 24, 111-15 (2015) (TCPA Omnibus Declaratory Ruling and Order), pets. for review pending sub nom. ACA Int’l v. FCC, No. 15-1211 (D.C. Cir. filed July 10, 2015).  Just as texts are a subset of “calls” under the TCPA, “robotexts” are a subset of “robocalls.”  See id. at 7964, para. 1 & n.1.

    [3] TCPA Omnibus Declaratory Ruling and Order, 30 FCC Rcd at 7973-74, 7975-76, paras. 14-15, 19.  A robotext platform may be deemed to have initiated the text for purposes of liability under the TCPA in certain circumstances.  Id. at 7980-81, para. 30 & n.110.

    [4] We refer to prerecorded- or artificial-voice calls together as “prerecorded” calls.

    [5] 47 U.S.C. § 227(b)(1)(A).  The TCPA also places limits on unsolicited prerecorded telemarketing calls to residential telephones.  See 47 U.S.C. § 227(b)(1)(B).

    [6] See 47 CFR § 64.1200.

    [7] By this Enforcement Advisory, the FCC’s Enforcement Bureau highlights certain obligations under the TCPA and corresponding Commission rules.  Failure to receive this notice does not absolve an entity of the obligation to meet the requirements of the Communications Act of 1934, as amended, or the Commission’s rules and orders.  Companies, individuals, and other entities should read the full text of the relevant portions of the TCPA and corresponding Commission rules, respectively, at 47 U.S.C. § 227 and 47 CFR § 64.1200, as well as FCC orders interpreting and/or applying those provisions.

    [8] See 47 U.S.C. § 227(b)(1)(A)(iii); see also 47 CFR § 64.1200(a)(1)(iii) (prohibiting such calls to “any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service which the called party is charged for the call”). Congress has amended Section 227 to except federal debt collection calls and the Commission recently implemented rules related to that exception.  Rules and Regulations Implementing the Telephone Consumers Protection Act of 1991, Report and Order, FCC 16-99 (Aug. 11, 2016), 2016 WL 4250379.

    [9] TCPA Omnibus Declaratory Ruling and Order, 30 FCC Rcd at 7990, para. 47; see also Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Request of ACA International for Clarification and Declaratory Ruling, Declaratory Ruling, 23 FCC Rcd 559, 565, para. 10 (2008) (concluding that creditors and debt collectors claiming prior express consent to make prerecorded-voice or autodialed calls to cell phones are responsible for demonstrating such consent was obtained).

    [10] TCPA Omnibus Declaratory Ruling and Order, 30 FCC Rcd at 8020, paras. 115-16 (consumer consent required for autodialed Internet-to-phone text messages and for text messages sent from apps “that enable entities to send text messages to all or substantially all text-capable U.S. telephone numbers, including through the use of autodialer applications downloaded or otherwise installed on mobile phones”).

    [11] Id. at 7989, para. 47.

    [12] Id. at 7996, paras. 55-70.  The prior express consent requirement is subject to limited exemptions granted by the Commission for specific types of calls; all exempted of these types must result in no charge to the called party and must satisfy specified conditions.  See id. at 8027-28, para 138 (financial alerts); id. at 7986, para. 40 (collect calling agencies setting up a billing relationship); id. at 8031-32 paras. 147-48 (certain healthcare messages); see also Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Cargo Airline Association Petition for Expedited Declaratory Ruling, Order, 29 FCC Rcd 3432, 3439, para. 21 (2014) (certain package delivery notifications).

    [13] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, SoundBite Communications, Inc. Petition for Expedited Declaratory Ruling, Declaratory Ruling, 27 FCC Rcd 15391 (2012) (setting forth certain requirements that the one-time text must meet).

    [14] See 47 CFR § 64.1200(a)(2) (requiring prior express written consent for prerecorded and autodialed telephone calls that include or introduce an advertisement or constitute telemarketing, except that consent need not be in writing for certain health care calls and calls made by or on behalf of a tax-exempt nonprofit organization).

    [15] TCPA Omnibus Declaratory Ruling and Order, 30 FCC Rcd at 7996, para. 64.

    [16] Id. at 8006-07, para. 85 (emphasizing that the caller bears the burden of demonstrating a reasonable basis for believing that he had consent to make the call and that he did not know about the number reassignment when making the one allowable call).

    [17] Id. at 8006-07, 8009, paras. 85, 89.

    [18] Before proposing a monetary forfeiture penalty against a party that does not, or should not, hold an FCC license, permit, certificate, or other authorization, the FCC must first issue a warning citation.  47 U.S.C. § 503(b)(5).  If a party continues to violate the Communications Act or the Commission’s rules after receiving a citation, the FCC may impose a monetary forfeiture penalty covering both violations that occur after the citation and those violations that were addressed in the citation.  See S. Rep. No. 95-580, 95th Cong., 1st Sess. at 9 (1977), reprinted in 1978 U.S.C.C.A.N. 109 (If a person or entity that has been issued a citation by the Commission thereafter engages in the conduct for which the citation of violation was sent, the subsequent notice of apparent liability “would attach not only for the conduct occurring subsequently but also for the conduct for which the citation was originally sent.”) (emphasis added).

    Great Lakes Credit Union

    Wednesday, November 23rd, 2016

    We are interested in locating persons who purchased cars on time from a car dealer and whose contracts were assigned to Great Lakes Credit Union, when the purchaser was not previously a member of the Credit Union.

    Northwest Collectors

    Tuesday, November 22nd, 2016

    Please contact us if Northwest Collectors, Inc. is trying to collect money from you.

    What you need to know about rent-to-own home deals — FTC statement

    Monday, November 21st, 2016

    What you need to know about rent-to-own home deals

    You dream about buying a house, but you can’t — at least not yet. Maybe you don’t have the money for a down payment, or you’ve had problems with your credit. But what if someone offered you a chance to eventually own the house you’re renting?

    You might be told it’s a chance to “stop throwing money away on rent.” But we’ve heard that many people who thought these deals were a path to owning a home watched their dreams disappear instead.

    In a rent-to-own deal, the person or company that owns a home agrees to sell it to you in the future for a specific price. Rent you pay now is counted toward your future down payment on the house. But these deals can be risky — and even flat-out scams. Sometimes people find out:

    • the “seller” doesn’t really own the property
    • the owner hasn’t paid property taxes
    • the house is in terrible shape, or has issues like lead or asbestos
    • promised fixes aren’t made after a contract is signed
    • the house is getting foreclosed on

    Even with legitimate rent-to-own deals, the devil is in the details. You might have to pay upfront fees and higher monthly payments than if you were renting. In some deals, if you miss a payment, the deal is off. If you do make it to the end, you might find you’re locked into paying more than the home is now worth, or that you can’t qualify for a mortgage to finish paying off the house.

    Consider saving up your money and working on repairing your credit to buy a house down the road. For more on buying home, take a look at our Homes and Mortgages articles.

    IRS warns of a new tax bill scam

    Thursday, November 17th, 2016

    IRS warns of a new tax bill scam

    We certainly understand if the latest IRS imposter scam makes you queasy: it involves a fake IRS tax notice that claims you owe money as a result of the Affordable Care Act.

    The IRS says the fake notices are designed to look like real IRS CP2000 notices, which the agency sends if information it receives about your income doesn’t match the information reported on your tax return. The IRS says many people have gotten the bogus notices, which usually claim you owe money for the previous tax year under the Affordable Care Act.

    It’s one of many IRS imposter scams that have popped up. As tax season nears, we’ll see more. The good news? There are red-flag warnings that can help you avoid becoming a victim. For example, the IRS will never:

    • Initiate contact with you by email or through social media.
    • Ask you to pay using a gift card, pre-paid debit card, or wire transfer.
    • Request personal or financial information by email, texts, or social media.
    • Threaten to immediately have you arrested or deported for not paying.

    In the new scam, the fake CP2000 notices often arrive as an attachment to an email — a red-flag — or by U.S. mail. Other telltale signs of this fraud:

    • There may be a “payment” link within the email. Scam emails can link you to sites that steal your personal information, take your money, or infect your computer with malware. Don’t click on the link.
    • The notices request that a check be made out to “I.R.S.” Real CP2000s ask taxpayers to make their checks out to “United States Treasury” if they agree they owe taxes.

    In the version we saw, a payment voucher refers to letter number LTR0105C, and requests that checks be sent to the “Austin Processing Center” in Texas. But scammers are crafty. They could send messages with a variety of return addresses.

    You can see an image of a real CP2000 notice on the IRS web page, Understanding Your CP2000 Notice. If you get a scam IRS notice, forward it to phishing@irs.gov and then delete it from your email account. Let the FTC know too.

    Convergent Outsourcing

    Wednesday, November 16th, 2016

    Please contact us if Convergent Outsourcing is attempting to collect a student loan from you.

    Federal Trade Commission Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs

    Wednesday, November 16th, 2016

    Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs

     

    The Federal Trade Commission (FTC) is issuing this Policy Statement to provide guidance regarding its enforcement policy with respect to marketing claims for over-the-counter (OTC) homeopathic drugs. It applies only to OTC products intended solely for self-limiting disease conditions1 amenable to self-diagnosis of symptoms and treatment. 2 The Commission believes this Policy Statement is appropriate in light of the burgeoning mainstream marketing of OTC homeopathic products alongside other OTC drugs.

    The FTC’s authority over disease and other health-related claims comes from Sections 5 and 12 of the FTC Act. Section 5, which applies to both advertising and labeling, prohibits unfair or deceptive acts or practices in or affecting commerce, such as the deceptive advertising or labeling of OTC drugs.3 Section 12 prohibits the dissemination of false advertisements in or affecting commerce of food, drugs, devices, services, or cosmetics.4 Under these provisions, companies must have a reasonable basis for making objective product claims, including claims that a product can treat specific conditions, before those claims are made.5

    Homeopathy, which dates back to the late-eighteenth century, is based on the view that disease symptoms can be treated by minute doses of substances that produce similar symptoms when provided in larger doses to healthy people. Many homeopathic products are diluted to such an extent that they no longer contain detectable levels of the initial substance. In general, homeopathic product claims are not based on modern scientific methods and are not accepted by modern medical experts, but homeopathy nevertheless has many adherents.6

    1 A self-limiting disease condition is one that resolves spontaneously with or without specific treatment.

    2 This Policy Statement does not apply to the practice of medicine.

    3 Federal Trade Commission Act, 15 U.S.C. § 45(a)(2).

    4 Federal Trade Commission Act, 15 U.S.C. § 52.

    5 See Advertising Substantiation Policy Statement, appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1984), aff’d, 791 F.2d 189 (D.C. Cir. 1986) (“Advertising Substantiation Policy Statement”).

    6 FTC Staff Report on the Homeopathic Medicine & Advertising Workshop (Nov. 2016).

    In 1988, the Food & Drug Administration (FDA) issued a Compliance Policy Guide (CPG) entitled “Conditions Under Which Homeopathic Drugs May be Marketed,” which permitted marketers to distribute OTC homeopathic products without demonstrating their efficacy. 7 Under the CPG, only homeopathic products intended solely for self-limiting disease conditions amenable to self-diagnosis of symptoms and treatment may be marketed OTC. The CPG requires that OTC homeopathic drugs be labeled as homeopathic and that their labeling display at least one major OTC indication for use.

    The FTC Act does not exempt homeopathic products from the general requirement that objective product claims be truthful and substantiated. 8 Nevertheless, in the decades since the Commission announced in 1972 that objective product claims must be substantiated,9 the FTC has rarely challenged misleading claims for products that were homeopathic or purportedly homeopathic.10

    Efficacy and safety claims for homeopathic drugs are held to the same standards as similar claims for non-homeopathic drugs. As articulated in the Advertising Substantiation Policy Statement, advertisers must have “at least the advertised level of substantiation.” Absent express or implied reference to a particular level of support, the Commission, in evaluating the types of evidence necessary to substantiate a claim, considers “the type of claim, the product, the consequences of a false claim, the benefits of a truthful claim, the cost of developing substantiation for the claim, and the amount of substantiation experts believe is reasonable.”11 For health, safety, or efficacy claims, the FTC has generally required that advertisers possess “competent and reliable scientific evidence,” defined as “tests, analyses, research, or studies

    7 See CPG Sec. 400.400 Conditions Under Which Homeopathic Drugs May be Marketed (revised Mar. 1995), http://www.fda.gov/iceci/compliancemanuals/compliancepolicyguidancemanual/ucm074360.htm

    8 “[A] product that contemporary technology does not understand must establish that this ‘magic’ actually works. Proof is what separates an effect new to science from a swindle . . . . [I]f a condition responds to treatment, then selling a placebo as if it had therapeutic effect directly injures the consumer.” FTC v. QT, Inc., 512 F.3d 858, 862-63 (7th Cir. 2008).

    9 See Pfizer, Inc., 81 F.T.C. 23, 62-64 (1972).

    10 See, e.g., Complaint, FTC v. HCG Diet Direct, LLC, No. 2:14-cv-00015-NVW (D. Ariz. Jan. 7, 2014) (stipulated judgment) (challenging weight-loss claims for purported homeopathic products); Complaint, FTC v. Iovate Health Scis. USA, Inc., No. 10-CV-587 (W.D.N.Y. July 14, 2010) (stipulated judgment) (challenging claims that purported allergy-relieving product was homeopathic and effective); Quigley Corp., No. C-3926, 2000 FTC LEXIS 24 (Feb. 10, 2000) (consent order) (challenging cold treatment and prevention claims for homeopathic products); Levey, 116 F.T.C. 885 (1993) (consent order) (challenging weight-loss and impotency treatment claims for purported homeopathic products).

    11 Advertising Substantiation Policy Statement, 104 F.T.C. at 840. These factors are known as the Pfizer factors, after the 1972 case, supra note 8, in which they were first enunciated.

    that have been conducted and evaluated in an objective manner by qualified persons and [that] are generally accepted in the profession to yield accurate and reliable results.”12 In general, for health benefit claims, particularly claims that a product can treat or prevent a disease or its symptoms, the substantiation required has been well-designed human clinical testing. 13 For the vast majority of OTC homeopathic drugs, the case for efficacy is based solely on traditional homeopathic theories and there are no valid studies using current scientific methods showing the product’s efficacy. Accordingly, marketing claims that such homeopathic products have a therapeutic effect lack a reasonable basis and are likely misleading in violation of Sections 5 and 12 of the FTC Act.14 However, the FTC has long recognized that marketing claims may include additional explanatory information in order to prevent the claims from being misleading. Accordingly, the promotion of

    12 See, e.g., POM Wonderful LLC, 155 F.T.C. 56, 193 (2013), aff’d in part, 777 F.3d 478, 504- 05 (D.C. Cir. 2015), cert. denied, No. 15-525, 2016 U.S. LEXIS 2991 (May 2, 2016); Telebrands Corp., 140 F.T.C. 278, 347 (2005), aff’d, 457 F.3d 354 (4th Cir. 2006); Novartis Corp., 127 F.T.C. 580, 725 (1999), aff’d, 223 F.3d 783 (D.C. Cir. 2000); Brake Guard Prods., Inc., 125 F.T.C. 138, 256 (1998).

    13 See, e.g., POM Wonderful LLC, 155 F.T.C. at 5-6 (requiring well-designed, well-conducted, double-blind, randomized controlled clinical testing to substantiate heart disease, prostate cancer, and erectile dysfunction prevention and treatment claims; also imposing such a requirement for all future disease claims), aff’d in part, 777 F.3d at 504-05 (affirming Commission holding that competent and reliable scientific evidence consisting of randomized, well-controlled human clinical testing is needed for disease-related claims but finding fencing-in order requirement of two such tests was not justified in this instance); see also FTC v. Nat’l Urological Group, Inc., 645 F. Supp. 2d 1167, 1202-03 (N.D. Ga. 2008) (accepting undisputed expert testimony that erectile dysfunction claims require well-designed, placebo-controlled, randomized, double-blind clinical trials for substantiation); FTC v. Direct Mktg. Concepts, Inc., 569 F. Supp. 2d 285, 303 (D. Mass. 2008), aff’d, 624 F.3d 1 (1st Cir. 2010) (“it seems well-accepted that double-blind, placebo-controlled studies are necessary to substantiate health-related efficacy claims”); Removatron Int’l Corp., 111 F.T.C. 206 (1988), aff’d, 884 F.2d 1489 (1st Cir. 1989) (requiring “adequate and well-controlled clinical testing” to substantiate claims for hair removal product); Thompson Med. Co., 104 F.T.C. at 826 (requiring well-controlled clinical studies to substantiate certain analgesic drug claims). The Commission has also accepted numerous settlements that required randomized controlled clinical testing for disease treatment and prevention claims. See, e.g., Brown, 152 F.T.C. 466, 481-82 (2011) (consent order); Nestlé HealthCare Nutrition, Inc., 151 F.T.C. 1, 13 (2011) (consent order); Viral Response Sys., Inc., 115 F.T.C. 676, 691 (1992) (consent order).

    14 Although this Policy Statement is limited to OTC homeopathic products for the treatment of self-limiting disease conditions (ones that resolve spontaneously with or without specific treatment) amenable to self-diagnosis, marketing claims about the efficacy of homeopathic products not covered by this Policy Statement also are subject to the requirements to Sections 5 and 12.

    an OTC homeopathic product for an indication that is not substantiated by competent and reliable scientific evidence may not be deceptive if that promotion effectively communicates to consumers that: (1) there is no scientific evidence that the product works and (2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts. 15 To be non-misleading, the product and the claims must also comply with requirements for homeopathic products and traditional homeopathic principles. Of course, adequately substantiated claims for homeopathic products would not require additional explanation.

    Perfunctory disclaimers are unlikely to successfully communicate the information necessary to make claims for OTC homeopathic drugs non-misleading. The Commission notes:

    • Any disclosure should stand out and be in close proximity to the efficacy message; to be effective, it may actually need to be incorporated into the efficacy message.

    • Marketers should not undercut such qualifications with additional positive statements or consumer endorsements reinforcing a product’s efficacy.

    • In light of the inherent contradiction in asserting that a product is effective and also disclosing that there is no scientific evidence for such an assertion, it is possible that depending on how they are presented many of these disclosures will be insufficient to prevent consumer deception. Marketers are advised to develop extrinsic evidence, such as consumer surveys, to determine the net impressions communicated by their marketing materials.

    • The Commission will carefully scrutinize the net impression of OTC homeopathic advertising or other marketing employing disclosures to ensure that it adequately conveys the extremely limited nature of the health claim being asserted. If, despite a marketer’s disclosures, an ad conveys more substantiation than the marketer has, the marketer will be in violation of the FTC Act.

    15 A statement that a product is based on traditional homeopathic theories might put some consumers on notice as to the basis of the product’s efficacy claims. However, because many consumers do not understand what homeopathy is, the Commission does not believe that such a statement alone would adequately put consumers on notice that a product’s efficacy claims are not backed by scientific evidence, and could, in fact, enhance the perceived credibility of the claim. Similarly, the Commission believes that a statement that a product’s efficacy “has not been evaluated by the Food and Drug Administration” does not adequately address the potential lack of substantiation for a product’s efficacy claims; dietary supplements bear a similar disclosure but FDA does require that dietary supplement label claims be supported by competent and reliable scientific evidence. Finally, the Commission believes that a simple statement that a product’s efficacy is not supported by scientific evidence does not convey the truly limited basis for the efficacy claim and that, to avoid deceiving consumers, it is likely necessary to explain that it is not accepted by modern medicine.

    In summary, there is no basis under the FTC Act to treat OTC homeopathic drugs differently than other health products. Accordingly, unqualified disease claims made for homeopathic drugs must be substantiated by competent and reliable scientific evidence. Nevertheless, truthful, nonmisleading, effective disclosure of the basis for an efficacy claim may be possible. The approach outlined in this Policy Statement is therefore consistent with the First Amendment, and neither limits consumer access to OTC homeopathic products nor conflicts with the FDA’s regulatory scheme. It would allow a marketer to include an indication for use that is not supported by scientific evidence so long as the marketer effectively communicates the limited basis for the claim in the manner discussed above

    homeopathic drugs

    Wednesday, November 16th, 2016

    Please contact us if you have purchased a homeopathic drug.

    Homeopathy: Not backed by modern science

    Tuesday, November 15th, 2016

    Homeopathy: Not backed by modern science

    On your pharmacy’s shelves, mixed in with conventional over-the-counter medicines, you might find products labeled “homeopathic.” Marketers of traditional homeopathic products claim they effectively treat symptoms, but lack reliable scientific evidence to support their claims.

    The 18th century theory of homeopathy claims that the process of dilution increases potency. So, according to this theory from the 1700s, a substance that causes symptoms of an illness in healthy people will cure similar symptoms in sick people, when the substance is diluted to a level that’s nearly undetectable.

    In response to the rapid growth in the homeopathic industry over the past few decades, the FTC held a public workshop that explored the current state of the homeopathic market, consumer understanding of homeopathy, and advertising for these products. The FTC issued a report and an enforcement policy statement with respect to marketing claims.

    The bottom line for you? The next time you are on the hunt for over-the-counter medication, keep this in mind:

    • Homeopathic medications are not evaluated for safety or effectiveness by the FDA.
    • Traditional homeopathic products lack reliable scientific evidence for their claims of effectiveness.
    • Homeopathy is based on a theory from the 1700’s that is not generally accepted within today’s scientific community.
    • The National Institutes of Health (NIH) advises that homeopathy should not be used as a replacement for proven conventional care or to postpone seeing a health care provider about a medical problem.

    For more, check out the FTC’s Homeopathic Medicine & Advertising Report and our articles on health treatments and cures.

    Efficacy and Safety Claims Are Held to Same Standard as Other OTC Drug Claims

    The Federal Trade Commission today announced a new “Enforcement Policy Statement on Marketing Claims for Over-the-Counter (OTC) Homeopathic Drugs.” The policy statement was informed by an FTC workshop held last year to examine how such drugs are marketed to consumers. The FTC also released its staff report on the workshop, which summarizes the panel presentations and related public comments in addition to describing consumer research commissioned by the FTC.

    The policy statement explains that the FTC will hold efficacy and safety claims for OTC homeopathic drugs to the same standard as other products making similar claims. That is, companies must have competent and reliable scientific evidence for health-related claims, including claims that a product can treat specific conditions. The statement describes the type of scientific evidence that the Commission requires of companies making such claims for their products.

    Homeopathy, which dates back to the 1700s, is based on the theory that disease symptoms can be treated by minute doses of substances that produce similar symptoms when provided in larger doses to healthy people. Many homeopathic products are diluted to such an extent that they no longer contain detectable levels of the initial substance. According to the policy statement, homeopathic theories are not accepted by most modern medical experts.

    For the vast majority of OTC homeopathic drugs, the policy statement notes, “the case for efficacy is based solely on traditional homeopathic theories and there are no valid studies using current scientific methods showing the product’s efficacy.” As such, the marketing claims for these products are likely misleading, in violation of the FTC Act.

    However, the policy statement also notes that “the FTC has long recognized that marketing claims may include additional explanatory information to prevent the claims from being misleading. Accordingly, it recognizes that an OTC homeopathic drug claim that is not substantiated by competent and reliable scientific evidence might not be deceptive if the advertisement or label where it appears effectively communicates that: 1) there is no scientific evidence that the product works; and 2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts.

    The policy statement notes that any such disclosures should stand out and be in close proximity to the product’s efficacy message and might need to be incorporated into that message. It also warns marketers not to undercut a disclosure with additional positive statements or consumer endorsements reinforcing a product’s efficacy. The statement warns that the FTC will carefully scrutinize the net impression of OTC homeopathic marketing claims and that if an ad conveys more substantiation than a marketer has, it will violate the FTC Act.

    The Commission vote approving the enforcement policy stat