Business Blog
What’s on boomers’ minds?
Baby boomers are running scared and marketers are in hot pursuit.
What strikes such fear? The specter of memory loss and cognitive impairment severe enough to turn you into “a prisoner” in your own home who is “unable to recall who you are, where you live, or to whom you are related.” According to an FTC lawsuit, Brain Research Labs, KeyView Labs, MedHealth Direct, and others deceptively touted the dietary supplement Procera AVH as a solution to that problem.
Ads for Procera asked consumers to imagine what their lives would be like if:
- “You are no longer allowed to handle your financial matters.”
- “You are no longer trusted to purchase anything . . . for you or anyone else.”
- “You are moving to a nursing home to live with strangers.”
- “You must sell your car, or give it to a family member.”
- “Your lifelong possessions are to be sold or given away.”
According to the FTC, the defendants claimed Procera could prevent and reverse age-related mental decline and memory loss, and improve concentration, focus, mental clarity, and mood. Consumers paid between $40 and $80 for a 3-4 week supply. The defendants sold some buyers on the supposed benefits of an automatic shipment program, charging their credit cards for regular supplies.
The pitch didn’t end there. On their site and in other promotions, the defendants brought out the heavy artillery: assurances that “a landmark clinical study” proved that their “breakthrough nutritional formula” would “help reverse up to 15 years of mental decline, effectively restoring a 50-year-old’s brainpower to that of a 35-year-old.” A print ad, for example, touted “randomized, double-blind, placebo-controlled research” where “clinicians witnessed a startling transformation in study participants’ brains.” Many of those claims were conveyed through Josh Reynolds, the stated “creator” of Procera and “Science Director” of defendant Brain Research Labs.
But the FTC says the defendants didn’t have proof to back up their claims that the product would significantly improve memory, concentration, focus, clarity, and mood or stop or reverse age-related mental decline and memory loss – especially cognitive impairment severe enough to interfere with independent living. The complaint also challenges those “clinically proven” claims as false and alleges that Josh Reynolds didn’t appropriately exercise his purported expertise in endorsing the product.
The proposed settlement includes broad injunctive provisions to protect consumers in the future. In addition, the defendants will pay $1.4 million with $400,000 of that reserved to satisfy a judgment in a case brought by local California law enforcement officials. The order also imposes a $61 million judgment against defendant KeyView Labs and a $91 million judgment imposed jointly against the remaining defendants. Under the terms of the settlement, KeyView will shut down the Procera automatic shipment program.
What can other companies take from this case?
Advertisers shouldn’t need a heads-up that misleading cognition claims are an important enforcement priority. Recent FTC actions have challenged deceptive representations about teaching toddlers to read, boosting students’ grades and SAT scores, and improving memory in older adults, to name just a few. Many consumers are concerned about cognition at every stage of life, but companies shouldn’t rush into the market unless they have – at minimum – competent and reliable scientific evidence to support their claims.
There may not be an I in T-E-A-M, but there are three of ‘em in L-I-A-B-I-L-I-T-Y. The promotion of Procera involved multiple parties. You’ll want to check the pleadings for the specifics, but the complaint names the businesses that have sold Procera; MedHealth Direct, a company involved in creating the ads; John Arnold, MedHealth Direct’s President; Josh Reynolds, the expert endorser and manager of the company that commissioned and reviewed the study; and a company that owned that company. When faced with compliance choices, prudent businesses are mindful of the breadth of liability under the FTC Act.
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