On the “Evaluate your options carefully before trying this at home” list, how about adding the do-it-yourself removal of moles, skin tags, and warts, including genital warts. That's one message to take from a just-announced FTC settlement, but the case also offers insights for companies that feature consumer endorsements in their ads or use affiliate marketing programs.
Nevada-based Solace International, Bioscience Research Institute, and Aaron Lilly sell DermaTend, a cream containing bloodroot and varying strengths of zinc chloride. (The bloodroot in question is a botanical, but it's too great a name not to be a heavy metal band, too.) The .17 ounce tube went for $39.95 and some consumers ponied up $69.95 for DermaTend Ultra. Buyers also got a toothpick and emery board to file down the area before application. (Is it possible to say ouch and eww at the same time?) Next, apply the product, wash it off after 45 minutes, and repeat every 24 hours until a scab forms.
Ads for DermaTend claimed that the product is “100% guaranteed to remove ALL your unwanted moles and skin tags quickly and painlessly at home.” Unlike “cutting, burning, and expensive laser surgery” – which “usually promises a hideous scar” – DermaTend users “won’t be left with large surgical scars.” Still on the fence about the DIY treatment? Touting a “97% success rate,” the company claimed the “clinic tested doctor recommended” product was “safe, affordable and works fast,” even on kids.
Ads prominently featured before-and-after photos and glowing testimonials. One endorser said, “I had a big mole on my face which I lived with for over 40 years. Just as you promised it is now gone. People don't stare at me anymore . . . .” Another consumer claimed, “My mole above my eye fell off after the 3rd application.”
Solace advertised the product on its own site and on Amazon, ebay, and SkyMall (the website and the magazine). The company also used Google AdWords, including “Mole Removal at Home?” and “Genital Wart Removal."
In addition, the defendants sold the product through an affiliate marketing program, giving affiliates a 30% cut of sales made via links from their sites to Solace’s. Affiliate sites often featured what were described as “DermaTend reviews.” For example, one touted the product as “a natural genital wart remover” that works by “killing” the virus “with natural agents.”
The defendants didn’t stop there. They also advertised Lipidryl, a weight loss supplement they said was backed up by “a rigorous clinical study of over 100 overweight subjects” who reportedly “lost 28 pounds in 10 weeks,” “dropped 6.7 inches from their waistline,” and “reduced body fat an astounding 18.4%.”
The FTC charged that a host of the defendants’ representations were false or deceptive, including claims that DermaTend was safe and effective for the fast, permanent removal of moles, skin tags, and warts with little or no scarring. The complaint also challenged the purported clinical evidence of Lipidryl’s effectiveness for weight loss.
The settlement applies just to those defendants, of course, but there’s a lot other marketers can take from the case.
“Natural” doesn’t necessarily mean safe and effective. Calling a product a “natural herbal remedy” doesn’t relieve advertisers of their long-standing obligation to support their claims with sound science. If you make objective product claims, you need to back them up with appropriate proof. Naturally.
Disclose material connections between the advertiser and people touting the product. Those supposedly satisfied customers who offered testimonials for DermaTend? It turns out the defendants solicited some of them with free products or even cold hard cash. The FTC Endorsement Guides make it clear that material connections like that need to be clearly and conspicuously disclosed. Watch this video or read The FTC Endorsement Guides: What People are Asking for a refresher on what’s required.
The rules apply to affiliate marketing. According to the complaint, affiliates acting on the defendants’ behalf posted what appeared to be independent product reviews from people who had tried DermaTend. What were they really? Misleading links designed to lure unsuspecting consumers into a sale – with the affiliate pocketing 30%. The FTC charged that the defendants failed to disclose their connection to those affiliates and falsely represented that the sites featured independent reviews by ordinary folks who had used the product. A lot has been said about affiliate marketing, but it boils down to this: It’s advertising, pure and simple. And as such, basic truth-in-advertising principles apply. Savvy marketers are careful to explain the rules to affiliates and watch what affiliates are up to on their behalf.
Health claims – including weight loss representations – need appropriate scientific support. When companies say they have clinical testing that proves their product works, consumersare likely to find those “Don’t just take our word for it” claims persuasive. That’s why the FTC takes it seriously when the “proof” doesn’t live up to the promise. Under the terms of the order, the defendants in this case will need high-quality human clinical testing to support future claims about removing skin lesions. If they plan to market weight loss products, they’ll need two human clinical studies to support efficacy claims.
Deception doesn’t pay. The settlement requires the defendants to turn over $402,338 immediately, but the FTC is taking additional steps to see that they don’t gain from violating the law. The order also requires them to turn over the proceeds from the sale of four houses in Texas.