FTC Alleges “Your Baby Can Read!” Ads Deceptive And Files Suit

The Federal Trade Commission (FTC) has filed false advertising charges against the marketers of Your Baby Can Read! – a program that was widely touted in infomercials and on the Internet.  I remember the ads about the program, and also remembering wondering if I should be doing it for my kids just in case in actually worked . . . If you remember, the program uses videos, flash cards, and pop-up books that supposedly teach children as young as nine months old how to read.

The FTC’s press release indicates that the complaint charges Your Baby Can, LLC, its former CEO Hugh Penton Jr., and the product’s creator with false and deceptive advertising – namely that the program could teach your infant or toddler to read and that the program was supported with scientific studies .  Your Baby Can, LLC, and the former CEO have agreed to settle with the FTC.  The principal and product’s creator, Robert Titzer, Ph.D, has not settled, and he is also charged with  making deceptive expert endorsements.

The settlement is interesting – it prohibits the defendants from further use of the term “Your Baby Can Read.”  The settlement also imposes a $185 million judgment, which equals the company’s gross sales since January 2008.  However, since the company is in a dire financial situation, once Your Baby Can makes a payment of $500,000, the remainder of the judgment will be suspended. If it is later determined that the financial information the company gave the FTC was false, the full amount of the judgment will become due.  Also, the settlement order against Penton and Your Baby Can LLC prohibits them from misrepresenting the benefits, performance, or efficacy of any product or service for teaching reading or speech, or enhancing language ability, cognitive ability, school performance, or brain development.  They also are barred under the settlement from misrepresenting that scientific support exists for such assertions.

According to the complaint, the defendants sold the Your Baby Can Read! program to parents and grandparents of children aged three months to five years since at least January 2008, charging about $200 for each kit and taking in more than $185 million.

FTC Green Guides – The End of Eco Friendly? Plant Friendly? Earth Friendly?

Most of us will say that we are green.

We all have different definitions of what green is, but ask most people, and they will say they are for protecting the earth. For limiting trash. For saving water and energy. For stopping pollution.

And becauase we are for those things, we will spend money on products that claim to be eco friendly or planet friendly or earth friendly. We might not actually spend more money than we otherwise would, but given the choice between a product with a green claim and one without, for the same price, most of us will choose the green product (assuming, of course, that we believe the product works the same as the conventional product).

But still. We have a niggling suspicion that those vague claims of planet friendly, eco friendly and earth friendly might not mean exactly what we think. But we still buy products with those claims, believing that we are doing some good.

The Federal Trade Commission’s (FTC) proposed revised Green Guides may well end those vague, unqualified green claims.

The FTC released its latest revised Green Guides on October 6, 2010. If you aren’t familiar with the FTC’s Green Guides, they are the FTC’s guidance to industry that helps marketers avoid misleading environmental claims in advertising.

The Federal Trade Commission Act (FTC Act) requires that advertising:

  • Be truthful and not deceptive;
  • Be supported by evidence to support the claims; and
  • Not be unfair.

Under the FTC’ Policy Statement on Deception, an advertisement is deceptive if it contains a statement or omits information that is likely to mislead consumers acting reasonably under the circumstances and is material (or important to a consumer’s decision to buy a product).

What is important that the FTC looks at an advertisment from the perspective of the reasonable consumer, and considers the advertisment in context. It isn’t just the words, but also the pictures and everything else. And, and this is critical, the FTC evaluates both express  and implied claims made in the advertising.

So, back to the proposed revised Green Guides. To update the Guides, the FTC conducted its own survey of consumers and green advertising. And the findings are of critical importance to the proposed revisions to the Green Guides with respect to unqualified green claims.

So, the FTC’s Consumer Perception Study found that consumers, reading an unqualified green green, believed that the product had a number of specific attributes implied by that unqualified green claim. Specifically, 61% believed that the product was made from recycled materials, 59% believed that the product was recyclable, 54% believed that the product was made with renewable materials, 53% believed that the product was biodegradable, 48% believed that the product was made with renewable energy, 45% believed that the product was non-toxic and 40% believed that the product was compostable. And, 27% of respondents interpreted the unqualified green and eco friendly claims as suggesting that the product had NO negative environmental impact.

Remember, a marketer must have evidence to support both express and implied claims. Therefore, because the FTC found that a reasonable consumer implied all of this attributes from an unqualified green claim, the FTC notes that making an unqualified green claim “remain[s] very difficult, if not impossible, to substantiate.”

As a result, Section 260.4(a) of the revised Green Guides, if adopted as proposed, state that “[i]t is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit.”

Further, Section 260.4(b) states:

Unqualified general environmental benefit claims are difficult to interpret and likely to convey a wide range of meanings. In many cases, such claims likely convey that the product, package, or service has specific and far-reaching environmental benefits and may convey that the item or service has no negative environmental impact. Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmetnal benefit claims.

From this, it appears that any general claims of eco friendly, planet friendly or earth friendly, or similar unqualified general environmental benefit claims, will be a thing of the past if the Green Guides are adopted as proposed. The examples given make this even more clear.

Example 2 is as follows:

A product wrapper bears the claim “Environmentally Friendly.” Text on the wrapper explains that it is environmentally friendly because it was “not chlorine bleached, a process that has beens hown to create harmful substances.” Although the wrapper was not bleached with chlorine, its production releases into the environment other  harmful sustances. Since reasonable consumers likely would interpret the “Environmentally Friendly” claim, in combination with the explanation, to mean that no significant harmful substances are released into the environment, the “Environmentally Friendly” claim is deceptive.

So, it will be interesting to see what will develop. Other claims addressed by the proposed revised Green Guides include certifications and seals of approval, degradable, compostable, ozone-safe/ozone-friendly, recyclable, free-of/non toxic, made with renewable materials, made with renewable energy and carbon offsets.