Publications

This month saw continued FTC enforcement activity on subscriptions and hidden fees, alongside a notable new complaint alleging false and misleading advertising for a dietary supplement. The FTC challenged express and implied claims that the supplement improves mood, reduces anxiety, and assists in weight loss as unsubstantiated, false, and misleading. The advertising was directed to both adults and children, and the complaint also alleged that the company made misleading earnings claims to seller recruits.

In the class action space, a recent filing took aim at claims that a consumer scale can accurately measure body mass index, alleging that the body composition measurements were false and misleading. This case may signal emerging scrutiny of the accuracy of biometric information and other health-related metrics generated by personal health-care devices—a development worth watching.

On the self-regulatory front, NAD’s recent decisions included several cases administratively closed on consent of the parties. This resolution pathway is worth keeping in mind for companies that would prefer to resolve their dispute before NAD without a full decision on the merits.

FTC Focus

FTC Enforcement Activity 

1. Under a proposed order to settle FTC allegations that they violated the FTC Act and the FTC’s Unfair and Deceptive Fees Rule, the companies that operate the Hopper travel booking apps have agreed to pay $35 million and will be prohibited from misrepresenting any fees and must clearly and conspicuously disclose fees and charges, as well as the final amount for any transaction. The complaint alleges that Hopper Inc. and its subsidiary charged users without their consent for “Tip” and VIP Support fees that were optional yet hidden and pre-selected. The complaint also alleged that Hopper misrepresented the benefits of their “VIP Support” and “Price Freeze” services by claiming that consumers could reach customer service “instantly” or within a few minutes but many customers were often unable to reach a customer support agent at all or had to wait substantial amounts of time. Hopper also deceived users about the benefits of its Price Freeze service by claiming that consumers could freeze an advertised price and book the travel later for the same price. However, the complaint alleges that Hopper failed to clearly disclose key restrictions including that Price Freeze only protects the price up to a certain amount and only if the booking is still available.
   
   Travel App Hopper to Pay $35 Million to Settle FTC Allegations It Charged Fees Without Consent and Deceived Users About Fees and Benefits of Some Products | Federal Trade Commission

2. Under a proposed order, Terrance Selb and Tyler Bennett, operators of American Tax Service, will surrender over $8 million in cash to settle FTC and State of Nevada charges that they made millions by operating a tax debt relief scheme. According to the FTC, the operators falsely claimed they could settle consumers’ back taxes for “pennies on the dollar” or for only a “fraction” of what was owed, often making these claims before evaluating the taxpayer’s circumstances and upselling fictitious add-on services. The FTC alleged that the operators impersonated federal and state government tax authorities, sent consumers threats about their debts, and targeted older consumers. Under the proposed order, the operators will be banned from debt relief services, tax preparation services, telemarketing, and impersonation of individuals, governments, or businesses.
   
   FTC, Nevada Will Require Tax-Relief Scammers to Pay Cash and Turn Over Assets Worth Nearly $10 Million to Settle Charges They Misled Consumers about Tax-Relief Services | Federal Trade Commission

3. At the FTC’s request, a California district court granted a temporary restraining order halting an allegedly deceptive mortgage assistance relief operation that allegedly violates the FTC Act by falsely claiming it can provide homeowners mortgage relief assistance under the Coronavirus Aid, Relief and Economic Security (CARES) Act and misleading homeowners into paying unlawful upfront fees. The FTC alleged that National Amendment Assistance and related entities sent homeowners letters falsely claiming that they can obtain lower mortgage rates and monthly payments under a program connected to a CARES-Act Homeowner Assistance Fund or Lender Specific In-house Mortgage Adjustment Program. According to the complaint, defendants did not obtain any mortgage relief for consumers but did keep the upfront fees and consumers’ financial information.
   
   FTC Sues to Stop Deceptive Mortgage Assistance Relief Operation that Targets Homeowners | Federal Trade Commission

4. At the FTC’s request, a federal district court has temporarily halted a vast international enterprise from operating misleading internet-based subscription schemes that violate the FTC Act and ROSCA, which have deceived consumers out of nearly a quarter billion dollars. According to the FTC’s complaint, Genesis Tech, its subsidiaries and various individuals have created and distributed dozens of varying deceptive product offerings, including fitness and nutrition apps, ADHD/productivity self-help courses, PDF editing tools, fashion consulting, and horoscope readings and psychic chats. The FTC alleges that defendants: (i) advertise the products as being free or available for a low, one-time cost, often with a money-back guarantee, but obscure references to auto-renewing subscriptions or recurring charges; (ii) double-charge consumers for the same product by adding more products to transactions without consumers’ knowledge or consent or continuing to charge or attempting to charge users even after cancellation; and (iii) make cancellation difficult, for example, by omitting cancellation options or requiring consumers to explain why they want to cancel.
   
   FTC Sues to Stop Sprawling Enterprise Operating Unlawful Subscription Schemes | Federal Trade Commission

5. The FTC recently sued multilevel marketer Amare Global Holdings Inc., Shawn Talbott (Amare’s former chief science officer), Patrick Hintze (Amare’s founding brand partner) and David Chung (the current CEO and majority shareholder) alleging that they violated the FTC Act by misrepresenting that its dietary supplements for children and adults could treat or cure various health conditions such as depression, anxiety and ADHD, and for misleading its seller recruits about their potential earnings as so-called “brand partners.” Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, commented that “Amare’s claims were not only deceptive but dangerous since it was aware that some brand partners were taking advantage of parents looking for products to help their children, who suffer from serious conditions.” Amare’s product information sheets, which were made available to Amare brand partners on the Amare website, state the product “[s]upports mood and motivation.” Likewise, Amare’s product information sheet for Kids Mood+ states the product “[s]upports better mood and stress resilience.” The complaint alleged that the “net impression of such code words is that Amare’s products treat depression.” Later in June, the FTC filed a contempt motion alleging that Amare, Talbott, Hintze, and former Amare CEO Hiep Tran violated a 2005 FTC order arising from the Window Rock case that banned Talbott and those working with him from making false, deceptive or unsubstantiated health claims.
   
   FTC Sues to Stop Amare Global Holdings from Misrepresenting the Health Benefits of Its Dietary Supplements for Children and Adults | Federal Trade Commission

6. In June, the FTC, Alaska, Iowa, Nebraska, and Texas filed a lawsuit against the World Professional Association for Transgender Health (WPATH), alleging that it has provided the means for medical providers to make false and unsubstantiated claims to sell pediatric medical transition services. The complaint alleges that WPATH made false and unsubstantiated claims regarding medical interventions, including drugs and surgery, for children and adolescents who expressed dissatisfaction with or distress about their sex traits, and that these recommendations misled parents and children about the medical consensus and medical necessity, as well as the safety and effectiveness, of such services, in violation of the FTC Act.
   
   FTC, States Sue World Professional Association for Transgender Health Over Deceptive Claims Regarding the Treatment of Children | Federal Trade Commission

FTC Seeks Public Comment on AI Accuracy Policy Statements

1. The FTC is seeking public comment on a proposed policy statement addressing concerns that AI companies may be manipulating the behavior of their AI systems and distorting their systems’ outputs to achieve undisclosed ideological objectives that could be deceiving consumers in violation of Section 5 of the FTC Act. The proposed policy statement will be published in the Federal Register and the public will have until July 31, 2026, to submit comments.  
   
   FTC Seeks Public Comment on Policy Statement Addressing AI Accuracy | Federal Trade Commission

1. The FTC has issued a report to Congress on its efforts to protect consumers from unfair or deceptive business practices by third-party intermediaries that facilitate private adoptions in return for a fee. In September 2024, after reviewing consumer complaints concerning adoption intermediaries’ potentially unlawful practices, the FTC issued warning letters reminding 31 companies of their obligation to advertise fairly and honestly. The warnings also noted that the Consumer Review Fairness Act makes it unlawful for an adoption intermediary to include standardized provisions in agreements that prohibit, threaten, or punish clients for providing negative reviews. As part of its efforts, the report stated that the FTC has also issued guidance for consumers on adoption and reiterated that the FTC encourages the public to file complaints and reports via ftc.gov to assist it in continuing to monitor this area.
   
   FTC Issues Report to Congress on Adoption Practices | Federal Trade Commission

2. New FTC data reveal that consumers reported losing $3.5 billion to imposter scams in 2025, with reported losses increasing nearly three times since 2020. FTC data also show that people reported imposter scams more than any other fraud category in 2025. The scams lure consumers through text, phone, email, social media, search engine results and other means. Some of the costliest impersonation scams start with a fake security alert, often from a bank. People are convinced to move money to “protect” it, with their losses often limited only by their available funds. In 2025, people reportedly lost nearly $1 billion to business impersonators with the highest reported losses to bank impersonators (up from $866 million in 2024) and about $920 million to government impersonators (up from $789 million in 2024).
   
   FTC Data Show People Reported Losing $3.5 Billion to Imposter Scams in 2025 | Federal Trade Commission

Class Actions

Ingredient-Based Claims

Beauty and skincare company eos Products, LLC has been sued in a putative class action alleging that it falsely and misleadingly represents on its website and the packaging of its various varieties of lip balms that they are “100% Natural” and/or “100% Natural & Organic” but they in fact contain stevia leaf extract and anisyl alcohol, which are synthetic ingredients commonly used for fragrance and flavor purposes. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

Fahey v. eos Prods, LLC, No. 3:26-cv-05570 (N.D. Cal. June 9, 2026)

Sundial Brands LLC was sued in a putative class action alleging that the unqualified front-label “100% Virgin Coconut Oil” claim on its SheaMoisture hair, personal, and baby care products “misleadingly conveys that virgin coconut oil is the exclusive, predominant, or defining characterizing ingredient, when in fact coconut oil is not the only ingredient, nor the predominant one,” and the back-label ingredient list confirms that the products are not wholly or predominantly virgin coconut oil. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

Yuryeva v. Sundial Brands LLC, No. 2:26-cv-06387 (C.D. Cal. June 11, 2026)

Dude Products, LLC was sued in a putative class action alleging that the packaging and online marketing of its Dude Wipes flushable wipes represents that they are: (i) made with “99% Water & Plant Based Ingredients” and are “Plant Based;” (ii) “Hypoallergenic,” “Dermatologist Tested,” “Sensitive,” and “Safe on Sensitive Skin;” (iii) scented by the botanicals identified on their front labels; and (iv) “Fragrance Free” and “Unscented.” However, the complaint alleges that the products contain multiple synthetic, non-plant-based ingredients; contain recognized contact allergens; that the scented products’ scents derive predominantly from an undisclosed “fragrance;” and that the Fragrance Free variant contains an ingredient that functions as a fragrance, contradicting its labeling. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as various states’ consumer protection statutes.

Roman v. Dude Products, LLC, No. 5:26-cv-06023 (N.D. Cal. June 18, 2026)

Cove Drinks, Inc. was sued in a putative class action alleging that its Cove probiotic sodas are misbranded and falsely advertised because their ads and labels falsely state that they contain “No Artificial Sweeteners” but they, in fact, contain erythritol. According to the complaint, erythritol in mass-produced foods such as the products is commercially manufactured through industrial fermentation and multi-step processing. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

Williams v. Cove Drinks, Inc., No. 3:26-cv-03374 (S.D. Cal. June 3, 2026)

Chobani, LLC was sued in a putative class action alleging that the 32-ounce containers of its “20G Protein” yogurt products misrepresent the true protein amount per serving because they in fact contain only 18 grams of protein per serving, which plaintiff asserts violates “strict FDA rules governing the calculation of serving sizes.” Plaintiff asserts violations of New York General Business Law Sections 349 and 350.

Knox v. Chobani, LLC, No. 1:26-cv-05093 (S.D.N.Y. June 16, 2026)

Costco Wholesale Corp. was sued in a putative class action alleging that it misleadingly markets its Kirkland Signature Nature’s Domain grain-free dog food as healthy and safe when, in fact, there is no medical or scientific justification for feeding a dog a grain-free diet high in legume or pulse ingredients, and dogs that consistently consume the product have an increased risk of developing the fatal heart disease dilated cardiomyopathy and related cardiac damage. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law and Washington’s Consumer Protection Act.

West v. Costco Wholesale Corp., No. 2:26-cv-02182 (W.D. Wash. June 23, 2026)

Junk-Fee Claims

Sunday App, Inc., a restaurant payment platform that lets diners pay for meals through a QR code, was sued in a putative class action alleging that it profits from adding a mandatory unlawful junk fee to all orders at the very end of the transaction process and that its multistep payment flow is designed to obscure this charge. According to the complaint, Sunday forces consumers who notice the fee to either accept it or abandon the transaction, while other consumers check out without ever becoming aware of the fee. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

Hoke v. Sunday App, Inc., case number unavailable (Cal. Super. Ct. June 8, 2026)

Match.com, L.L.C. was sued in a putative class action alleging that it deceptively advertises “Highlights” (i.e., other members who are “most compatible” with a user) to entice users to subscribe to Match’s platform but that subscribers discover that they must pay an additional amount to obtain and send “Super Likes” to these Highlights. The complaint further alleges that ads with specific Highlights sent to consumers via email could be comprised of fake accounts to entice consumers into purchasing Super Likes, noting the FTC’s 2019 complaint alleging that Match’s parent company used fake love interest ads to trick consumers into purchasing paid subscriptions on Match.com. Plaintiff asserts violations of New York General Business Law Sections 349 and 350.

Caetano v. Match.com, L.L.C., No. 1:26-cv-05554 (S.D.N.Y. June 30, 2026)

Safety Claims

AbbVie Inc. was sued in a putative class action alleging that it markets its injectable cosmetic filler Juvederm as safe but conceals that the product poses a material risk of granuloma (hard, painful lumps under the skin that do not go away on their own) and facial disfigurement. Plaintiff asserts violations of California’s Consumer Legal Remedies Act and Unfair Competition Law.

Garcia v. AbbVie Inc., No. 1:26-cv-07542 (N.D. Ill. June 27, 2026)

Health and Weight-Loss Claims

Garmin Ltd. and two of its subsidiaries were sued in a putative class action alleging that they falsely, misleadingly, and deceptively market their Garmin Index S2 Smart Scale, by promising that it accurately measures various body composition metrics despite its inability to provide accurate body composition measurements. Plaintiff asserts violations of Illinois’ Consumer Fraud and Deceptive Business Practices Act, Uniform Deceptive Trade Practices Act, and various state consumer protection statutes.

Maurer v. Garmin Int’l, Inc., No. 1:26-cv-6389 (N.D. Ill. May 29, 2026)

Royo Bread Co. was sued in a putative class action alleging that it falsely and misleadingly claims that its keto-friendly bagels and other bread products are “significantly healthier” and contain fewer calories than they do because the caloric values in Royo’s products are not consistent with commonly accepted science. For example, one of Royo’s bagel products claims to contain only 80 calories per serving but it would contain about 204 calories per serving if it complied with the USDA’s standard for caloric values. Plaintiffs assert violations of various states’ consumer protection statutes and false advertising laws, including among others, California and New York.

Salley v. Royo Bread Co., No. 1:26-cv-03220 (E.D.N.Y. May 28, 2026)

Veracity Wellness Inc. was sued in a putative class action alleging that it falsely advertises that users of its “Metabolism Ignite™” dietary supplement, which it promotes as “Nature’s Ozempic,” will see “un-hunger,” appetite suppression, and weight loss benefits comparable to the results associated with prescription GLP-1 drugs by increasing the body’s naturally occurring levels of GLP-1 (the hormone that triggers the body’s release of insulin and increases feelings of satiety). Plaintiff also asserts that Veracity deceptively markets its product as “a safer, natural equivalent alternative” to prescription GLP-1 drugs that will “improve overall energy, health and well-being” but that the product cannot deliver similar results and that no clinical data supports the notion that simply boosting naturally occurring GLP-1 has sustained weight loss effects. Plaintiff asserts violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

Elazari v. Veracity Wellness Inc., No. 2:26-cv-06276 (C.D. Cal. June 9, 2026)

Failure to Disclose Paid Influencer Endorsements

Sportswear company Gymshark USA, Inc. was sued in a putative class action alleging that it unfairly and deceptively markets its products in violation of FTC guidance and state consumer protection law by entering into exclusive promotional contracts with fitness influencers and instructing them to post Gymshark content on social media without disclosing that such posts are paid advertisements, or by deliberately failing to ensure that influencers abide by disclosure obligations. Plaintiff asserts violations of New York General Business Law Section 349.

Lupea v. Gymshark USA, Inc., No. 1:26-cv-05073 (S.D.N.Y. June 16, 2026)

Motions to Dismiss Denied

The Southern District of New York largely denied dismissal of claims in a putative class action alleging that Colgate-Palmolive Co. made material misrepresentations and omissions about its toothpaste products because they contained or risked containing heavy metals, including lead and mercury. The court rejected Colgate’s argument that plaintiffs’ claims under New York General Business Law Sections 349 and 350 fail, noting that whether the labels would mislead a reasonable consumer is a question of fact for the jury and concluding that allegations that Colgate markets the products as “completely safe” and as tested “at every stage of the product life cycle” and claims that the products offer “Whole Mouth Health” and are “Responsibly Made” could plausibly lead a reasonable consumer to believe there are not heavy metals in the products. For the same reasons, the court also denied dismissal of plaintiffs’ California Consumers Legal Remedies Act and Unfair Competition Law claims. The court distinguished Colgate’s cases discussing whether the alleged misrepresentation relates to the safety of harmful substances, explaining that the dispositive inquiry is whether the challenged representation bears a reasonable connection to the alleged contaminant. The court stated that “Whole Mouth Health” and “Responsibly Made” are not unrelated marketing claims and they directly speak to product safety and overall healthfulness. The court concluded that a reasonable consumer could interpret such representations as conveying that the products are free from harmful substances like lead and mercury.

Brower v. Colgate-Palmolive Co., No. 25-CV-3348, 2026 U.S. Dist. LEXIS 141628 (S.D.N.Y. June 25, 2026)

A federal district court denied dismissal of claims in a putative class action alleging that defendants violated the Virginia Consumer Protection Act (“VCPA”) because they owed consumers a duty to disclose the “true safety” of their kratom products but failed to disclose that the products pose a risk of dependence and disseminated advertising marketing the products as “safe, reliable, and of high quality,” while actively concealing the kratom’s addictive nature. The court rejected defendants’ argument that plaintiff failed to satisfy Federal Rule of Civil Procedure 9(b)’s heightened particularity requirement, which applies to the VCPA. The court concluded that plaintiff identified the “what, when, where, and how” of the alleged fraud with sufficient particularity under the more relaxed Rule 9(b) standards governing fraud by omission. The court noted that plaintiff alleged exactly the information that defendants failed to include on the products’ packaging (i.e., warnings that kratom is similar to an opioid, can cause dependency and withdrawal). The court further noted that plaintiff identified the specific way that these omissions caused consumers to be misled because plaintiff alleged that consumers reasonably assumed “that a product that is addictive, or has a risk of being addictive, like an opioid, would bear a warning on its packaging.”

Tucker v. Palaio, No. 3:25-cv-488, 2026 U.S. Dist. LEXIS 135914 (E.D. Va. June 17, 2026)

NAD Focus

Free Internet Forever Claims

In a challenge brought by competitor AT&T Services, Inc., NAD found that the claim by Charter Communications, Inc. d/b/a Spectrum that “Spectrum customers will receive free high-speed internet forever, with the purchase and maintenance of four mobile lines” was supported because consumers pay the same price for mobile service whether or not they receive the free internet offer. However, noting “that where a ‘free’ claim omits information that materially changes the cost, nature, or availability of the advertised benefit, that information must be clearly disclosed,” NAD recommended that Spectrum clearly and conspicuously disclose, either in the main claim or through a prominent disclosure in close proximity to the offer, that eligibility for the “Free Internet Forever” offer requires four qualifying Spectrum Mobile lines, some of which must be switched, transferred, or ported from another carrier, and that a one-time installation charge and other fees may apply. Additionally, NAD recommended that, to the extent that the advertising does not otherwise disclose the offer’s remaining material terms and conditions, Spectrum clearly and prominently direct consumers to a readily accessible source where those terms are available.

Charter Communications, Inc. (Spectrum Home Internet), Report #7554, NAD/CARU Case Reports (May 2026)

Fiber-Powered Claims

In a Fast-Track SWIFT challenge brought by competitor AT&T Services, Inc. at issue was whether disclosures in Comcast Cable Communications Management, LLC’s “Fiber-Powered” advertising for its Xfinity Internet service were sufficient to communicate that it is not delivered to subscribers via a “fiber-to-the-home” infrastructure. NAD determined that the language “Xfinity Internet is powered by fiber and connected to premises by coaxial cable” sufficiently explains that the advertised service does not deliver fiber to the home, noting that the language clearly states that the last connection to the subscriber’s premises is coaxial cable, making the distinction with fiber-to-the-home infrastructure and explaining the extent of the network that is “fiber-powered” for purposes of a short disclosure. However, as “fiber-powered” appears alongside several other claims, including separate disclosures, NAD found that the coaxial cable disclosure does not stand out and recommended that Comcast modify the disclosure to make it more prominent and more proximate to the “fiber-powered” WiFi claim as necessary to ensure that the disclosure is clear and conspicuous.

Comcast Cable Communications Management, LLC (Xfinity Internet), Report #7575, NAD/CARU Case Reports (May 2026)

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