The FTC, in the week leading up to the Fourth of July holiday, took action in multiple healthcare arenas, including supplements and Ear, Nose and Throat (“ENT”) specialty products. The agency also successfully shut down a scammer who used PPP loans to sell bogus grant funding packages to minority-owned businesses in Florida. These stories and more after the jump.
Monday, June 27, 2022
Bureau of Consumer Protection: COVID-19
- The FTC, working with the State of Florida, has filed a complaint in the U.S. District Court for the Middle District of Florida, to stop a “Grant Bae” scam targeting minority-owned businesses seeking pandemic relief funds. The complaint alleges that Traeshonna Graham, the owner of the company behind the scam, had been using Grant Bae to sell grant writing and consulting “packages” with misleading guarantees of grant funding based on the package purchased. The complaint alleges violations of multiple laws, including the COVID-19 Consumer Protection Act, the FTC Act, and the Florida Deceptive Unfair Trade Practices Act. In addition to falsely promising significant and guaranteed returns, Grant Bae also allegedly misled customers about grant status, deceived customers about its access to grant funding, lied about its prior success, and failed to provide promised refunds. The FTC also alleges that Graham used loans from the federal Paycheck Protection Program COVID-19 stimulus program to fund the start of Grant Bae. The company has now been temporarily shut down by a federal court.
Wednesday, June 29, 2022
Bureau of Consumer Protection: Deceptive Free Trial Offers
- The FTC will be sending 176,028 checks worth more than $5.4 million to consumers who were charged for “free trial” offers for cosmetics and weight loss supplements. The checks relate to a September 2019 complaint filed by the FTC against AH Media Group for misrepresentations related to the offers. The company allegedly claimed that consumers would pay minor shipping and handling fees; in reality, the terms and conditions contained in inconspicuous, small font and faded background text allowed the company to charge the full price of the trial product and enroll consumers in a “continuity plan” with recurring charges. The FTC provides a state-by-state breakdown of commission refunds which can be found on the interactive dashboards for refund data.
Thursday, June 30, 2022
Bureau of Consumer Protection: Deceptive Health Marketing
- The Commission finalized an administrative consent order against Health Research Laboratories, LLC and Whole Body Supplements, LLC banning the companies from advertising or selling dietary supplements or otherwise claiming that their products reduce the risk of disease. The consent order stems from a November 2020 administrative complaint, which alleged that the companies made misleading and unsubstantiated claims that their supplements prevent or treat conditions such as cardiovascular disease, high blood pressure, and diabetic nerve pain. The unanimous order follows a public comment period, in which the agency received only one comment.
Bureau of Competition: Health Care Mergers
- The FTC unanimously approved a final order against Medtronic to settle charges that the company’s proposed acquisition of Intersect ENT, Inc. would have anticompetitive effects in the balloon sinus dilation products and ENT navigation systems markets. Under the order, Medtronic must divest one of Intersect’s subsidiaries to Hemostasis, LLC, and Hemostasis in turn must obtain prior approval before transferring the divested assets.
For further information, please contact:
Kari Ferver, Crowell & Moring
kferver@crowell.com
