FTC Charges Five ‘Natural’ Products Firms Over Claims

Posted 18 April 2016

This article by Serena Ng, reports in The Wall Street Journal on the USA Federal Trade Commission charging five ‘natural’ products firms over false claims:

Agency says companies falsely promoted shampoos, lotions, sunscreens containing synthetic ingredients

The Federal Trade Commission sounded a warning to consumer products companies that claim their goods are completely natural, after bringing charges Tuesday against five sellers of skin-care and hair-care products.

The agency, which enforces federal truth-in-advertising laws, said the five companies falsely promoted their shampoos, skin lotions or sunscreens as being “all natural” or “100% natural,” when the products contained some synthetic ingredients.

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“Companies should take a lesson from these cases,” Jessica Rich, director of the FTC’s bureau of consumer protection said in a statement. She said products that claim to be all natural should have “no artificial ingredients or chemicals.”

The actions mark the first time the FTC has targeted the natural claims made by personal-care products, an industry that has proliferated in recent years. There are no guidelines or legal definitions of what constitutes “natural,” and many companies have taken to calling their products natural if some of their ingredients are derived from plant-based materials.

U.S. sales of so-called natural personal care products were roughly $5 billion in 2015 and are forecast to increase at a 6% annual rate through 2019, according to estimates from consulting firm Kline & Co. Many products that make natural claims charge a premium relative to their mainstream peers.

Four of the companies in the FTC’s complaints agreed to settle the charges and change their labels and advertising, or drop their all-natural claims on products including Rocky Mountain sunscreen, ShiKai shower gel, Eden BodyWorks shampoo and Beyond Coastal sunscreen. Some of the products contain ingredients such as dimethicone, a lubricating agent, and phenoxyethanol, a preservative that is also commonly found in cleaning products.

The commission is moving forward with a lawsuit against a fifth firm, California Naturel Inc. The Sausalito, Calif., company sells sunscreen labeled as “all natural” that the FTC said contains dimethicone. A 2.3 ounce tube of the sunscreen retails for $35 on the brand’s website, which says the product was formulated with “Glacial Oceanic Materials” and contains antioxidants from botanical sources.

A note on the company’s website says the FTC required the company to add information noting that “Dimethicone, a synthetic ingredient, is 8% of the sunscreen formula, the remaining 92% are natural products.” The company didn’t immediately respond to a request for comment.

The FTC said companies must be able to back up their product claims with scientific evidence and can’t violate the law by making deceptive claims. The companies that settled the charges are Trans-India Products Inc. of Santa Rosa, Calif.; Erickson Marketing Group Inc. in Arvada, Colo.; ABS Consumer Products LLC in Memphis, Tenn.; and Beyond Coastal in Salt Lake City.

Sean Zimmerman, general manager of Erickson Marketing Group, the company that sells Rocky Mountain sunscreen, said the brand changed labels on its “face stick” sunscreens shortly after being contacted by the FTC about its all-natural claims six months ago.

“It was our misunderstanding,” he said, adding the company had mistakenly believed it could make the claim if only the active ingredients in its product were natural.

Mr. Zimmerman said the FTC informed his company that the claim also covered a product’s inactive ingredients, which included dimethicone in its case. “We weren’t trying to mislead anybody, so we immediately made the change,” Mr. Zimmerman said.

Trans-India, ABS and Beyond Coastal didn’t respond to requests for comment.

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