GeneLink, Inc. and Former Subsidiary also Agree to Improved Safeguards of Consumers’ Sensitive Medical Information
Two marketers of genetically customized nutritional supplements have agreed to settle Federal Trade Commission charges of deceptive advertising for claims that their personalized nutritional supplements treat diabetes, heart disease, arthritis, insomnia, and other ailments. The proposed settlements also resolve charges that the companies engaged in lax information security practices.
Through a network of individual affiliates, GeneLink, Inc. and its former subsidiary, foruTM International Corp., marketed nutritional supplements and a skincare product that were purportedly customized to each consumer’s unique genetic profile – based on an assessment of the DNA obtained from a cheek swab provided by the consumer. The supplements and skin repair serum each cost more than $100 per month.
The administrative complaint alleges that GeneLink and foru violated the FTC Act by making false or unsupported health claims about their genetically customized products. Company-approved marketing materials included claims that the customized nutritional supplements could compensate for an individual’s genetic disadvantages, and that the customized skin repair serum’s effectiveness was scientifically proven. The companies also claimed through testimonials that the customized nutritional supplements could treat serious conditions such as diabetes, heart disease, and insomnia.
According to the FTC, the companies also deceptively and unfairly claimed that they had taken reasonable and appropriate security measures to safeguard and maintain personal information collected from nearly 30,000 consumers. According to the complaint, the companies failed to protect the security of personal information – including genetic information, Social Security numbers, bank account information, and credit card numbers; did not require service providers to have appropriate safeguards for consumers’ personal information; and failed to use readily available security measures to limit wireless access to their network.
“This case is about the consequences of making false claims,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “It doesn’t matter whether the claims deal with the benefits of direct-to-consumer genetic testing or the privacy of personal information. It’s against the law to deceive people about your product and to make promises you don’t keep.”
The proposed settlements prohibit the marketers from claiming that any drug, food, or cosmetic will treat, prevent, mitigate, or reduce the risk of any disease including diabetes, heart disease, arthritis, or insomnia – by modulating the effect of genes, or based on a consumer’s customized genetic assessment – unless the claim is true and supported by at least two adequate and well-controlled studies. The orders also require that claims that a product effectively treats or prevents a disease in persons with a particular genetic variation must be backed up with randomized clinical trials conducted on subjects who have that genetic variation.
In addition, the companies may not make any other claims about the health benefits, performance, or efficacy of any drug, food, or cosmetic by modulating the effect of genes, or the consumer’s customized genetic assessment – unless the claim is true and based on competent and reliable scientific evidence. The proposed orders also prohibit the marketers from misrepresenting scientific research regarding such drug, food, or cosmetic, or any genetic test or assessment. The orders also provide a safe harbor for advertising claims that have been approved by the FDA.
Under the proposed orders, GeneLink and foru also are prohibited from providing their affiliates, or any person or entity, with the means to make the prohibited health claims. The proposed settlements also require the companies to monitor claims their affiliates make on their behalf.
Finally, the proposed orders require the companies to establish and maintain comprehensive information security programs and submit to security audits by independent auditors every other year for 20 years. The proposed settlements also bar GeneLink and foru from misrepresenting their privacy and security practices.
These actions are part of the FTC’s ongoing efforts to stop over hyped health claims and protect the security of consumers’ sensitive health and financial information. Consumers should carefully evaluate health claims made by advertisers. The FTC has information for consumers about direct-to-consumer genetic tests and dietary supplements.
The Commission vote to accept the consent agreement package containing the proposed consent orders for public comment was 3-1, with Commissioner Ohlhausen voting no. Chairwoman Ramirez and Commissioner Brill have issued a joint statement, Commissioner Ohlhausen has issued a statement, and Commissioner Wright has issued a statement. The FTC will publish a description of the consent agreement package in the Federal Register shortly.
The agreements will be subject to public comment for 30 days, beginning today and continuing through February 6, 2014, after which the Commission will decide whether to make the proposed consent orders final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in electronic form should be submitted using the following Web links: https://ftcpublic.commentworks.com/ftc/genelinkconsent (Genelink) and https://ftcpublic.commentworks.com/ftc/forutmconsent (foruTM International Corp.), and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
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