FTC Sends Warning Letters to Hundreds of Companies

Direct sellers included in Notices of Penalty Offense for Product Claims

By:  David Bland

On April 13 the Federal Trade Commission (FTC) put 670 companies, including several direct selling companies, on notice regarding the need to substantiate product claims. In a fourth round of warning letters since the Commission resurrected the use of its Penalty Offense Authority (POA) in October of 2021, The Notice of Penalty Offenses Concerning Substantiation of Product Claims reminds the recipients that the promotion or advertising of products using deceptive or unfair practices is a violation of Section 5 of the FTC Act and subjects them to civil penalties of $50,120 per violation.

Companies receiving letters include major corporations such as Amazon, PepsiCo, Novartis and Walmart. Many direct sellers also received the notice, including Amway, Arbonne, Isagenix, Herbalife, Mannatech, Nature’s Sunshine and Nu Skin.