It isn’t always that simple, however. There are lesser types of liability that can result in substantial losses for business owners who sell products, and in these cases the plaintiff may not be an injured client, but rather the U.S. Federal Trade Commission (FTC) or Food and Drug Administration (FDA). This is especially true for spa owners who have made the courageous leap into marketing their own formulations.
For the spa industry, one particular category garnering a lot of attention from the FTC and FDA is dietary supplements. Here’s the skinny on what to consider before you bring them on as a retail offering.
The Siren’s Call
According to a 2016 report by the Centers for Disease Control (CDC), 36.5 percent of U.S. adults suffer from obesity, which not only raises the long-term risk for just about every common health problem but can also do considerable psychological damage along the way. However, the journey to “thin” is notoriously difficult. Thus, the promise of a quick fix via dietary supplements has become a modern-day siren’s song: seductive but deceptive.
If your spa offers body contouring services, having a retail component in the form of various incarnations of vitamin and mineral supplements, probiotics, herbs and enzymes only makes sense. However, before you agree to place that first bottle or blister pack in the weight reduction area of your spa’s retail section, you need to administer a multifaceted “sniff test,” figuratively speaking. First, look closely and critically at the claims stated on the product’s packaging, as well as in all its advertising and marketing materials.
I know—you’re not a scientist—but you can start by asking two key questions.
1) Does the product claim to cure a wide variety of problems? When a product’s description is vague yet sweeping, chances are there isn’t a whole lot of science behind it. These types of claims are as old as deception itself. Here’s an extreme example that demonstrates the point. Back in 1891, there was a product from Dr. J. Collis Browne called Chlorodyne. According to the label, in addition to aiding in weight loss, Chlorodyne was also a remedy for influenza, colds, coughs, catarrh (excessive mucus buildup), asthma and bronchitis. But, wait, that’s not all: Chlorodyne’s makers also claimed it worked like a charm to resolve diarrhea, stomach chills and other bowel complaints. Wow. We can only conclude that the weight loss claim is related to the body’s shock response from having had so many conditions cured at once.
2) Are the product’s claims backed up by any known clinical studies? In 2004, a product called Chinese Diet Tea promised that regular ingestion would spur excess weight to simply fall off —regardless of whether the user dieted or exercised—at the rate of up to six pounds per week for months on end. How could this be possible? Well, you could choose to believe the company’s explanation, which was that the tea “neutralized the absorption of calories and fat.” Or you could search online for a single medical study showing that such a thing could be possible. Let me save you the trouble: It couldn’t. If it could, we’d all look like Ryan Gosling and Emma Stone. Despite this harsh reality, a number of credible news outlets around the country carried the product’s advertising banner exclaiming “I Lost 64 lbs. in 10 Weeks!”
The FDA has some very specific rules regarding claims made by dietary supplements. Per its website (fda.gov), product claims “must be based on significant scientific evidence that shows a strong link between a food substance and a disease or health condition.” Further, the claim “can only state that a food substance reduces the risk of certain health problems—not that it can treat or cure a disease.” They cite an example of a properly made claim for a food supplement: “Calcium may reduce the risk of the bone disease osteoporosis.”
Thus, the folks behind the Chinese Diet Tea, along with several other perpetrators of similarly flagrant false marketing claims, were the subjects of six complaints filed by the FTC as part of its Operation Big Fat Lie, an effort launched in 2004 to halt deceptive advertising of weight loss products. The FDA works hand in hand with the FTC, which regulates advertising of these products. Now here’s where spas come in. One of the complaints involved the New England Diet Center and Bronson Day Spa in Westport, Connecticut, for making unsubstantiated claims about the Diet Tea that the FTC felt amounted to deceptive marketing practices. The businesses were ultimately ordered to pay almost $2 million in damages to the FTC (which typically attempts to locate and compensate damaged consumers). Fortunately for innocent business owners, the FDA and FTC primarily target manufacturers. However, that doesn’t leave retailers who sell those manufacturers’ products in the clear. In most states, if a consumer buys a product whose use causes them injury, everyone in the chain of distribution can be held liable.
Even if a product proves harmless, if it’s ineffective the FDA and FTC can order it off the market—and the retailer stands to lose a lot of inventory. In the (likely) event that the manufacturer is no longer in business, the retailer is now stuck with unsellable product and no refund. Most importantly, that retailer has lost credibility and, potentially, valuable revenue.
Another federal initiative similar to Operation Big Fat Lie seems unlikely with the regulatory climate now in Washington. However, spa owners shouldn’t ignore the advice given in this column because similar state agencies continue to exist and have similar enforcement powers. Whether it’s levied by the state or federal government, a fine of a million bucks looks exactly the same: huge.
It took a certain amount of critical thinking for you to become a business owner, and it takes a lot of the same to stay successful. In my experience, most legal troubles can be avoided by exercising common sense. Unfortunately, things like a slow business month or a broken Vichy shower can get in the way of your clear thinking. Before you resort to taking on a new retail product in hopes of a quick cash flow, apply your business sense. Ask the manufacturer to provide clinical evidence of its claims, and be especially suspicious of the following terms and phrases:
- A Cure
- Breakthrough discovery
- A Secret ingredient
- Exclusive formula
- Ancient remedy
- Science-y sounding terms you can’t find online
- Developed by a Nobel Prize winner (doctor, scientist) whose name isn’t provided Finally, you can pretty much dismiss those overly dramatic or hyperbolic testimonials, such as, “Two months ago I could barely walk to the mailbox and last week I successfully reached the summit of Mount Everest.
–by Michael L. Antoline J.D.