Is HCG Legal? Yes. But Be Careful How You Market It
Is HCG legal? Yes. But overstating its efficacy could land you in trouble with the FTC.
For example, the Federal Trade Commission initiated proceedings against Sam Smith (not real name), president of a company that sells hCG weight loss products. (We’ll call the company Acme HCG. ) The FTC isn’t happy with Smith because the agency believes he crossed the marketing compliance line – even after a warning letter from the FTC.
First Things First: Is HCG Legal? What Is It?
Human chorionic gonadotropin (hCG) is a hormone produced by the placenta and other types of cancers. When used in certain ways, hCG can result in various desirable side effects, like weight loss.
On the flip side, it’s also a performance enhancing “drug” favored by baseball players.
How Much hCG Did Smith Sell?
There is no doubt about it, Smith is a good at what he does. The hCG salesman offloaded a whopping $13 million worth of product in 2010. Where did he sell his goods? Facebook, YouTube and via various online retailers and affiliate marketers. He also made it into Rite-Aid, Walgreens and GNC.
The FTC Sent A Warning Letter First, Which Smith Apparently Ignored
Why Aren’t The Retail Stores Listed As Defendants?
You may be wondering: why aren’t the retail stores that carried the product listed as defendants? In most cases, retail stores are not liable for product deficiencies. As a GNC spokesperson explained when interviewed about the Wright case, “[GNC] relies on the vendor to ensure ‘that the products are safe and compliant with all applicable laws and regulations.’”
This lawsuit should not come as a shock to Smith. According to reports, the FTC sent him a warning letter last year. In it, the commission reminded the hCG salesman that it had banned the sale of homeopathic hCG products and warned Smith that he was violating the Food, Drug and Cosmetic Act. In essence, the FTC gave him a chance to fix his marketing materials, but he chose not to pay heed.
Why Did Smith’s Weight Loss Marketing Material Get Him Into Legal Trouble?
The marketing materials, some of which featured Carmen Electra, were chock full of promises consumers love to hear, like “rapid and substantial weight loss.” For example, a testimonial on one website reads, “I don’t really like to exercise, it’s hard to get it in when I am a stay at home mom…I did GCG and lost 10 to 15 pounds in 30 days.”
According to HCG Platinum products’ instructions, all weight loss hopefuls had to do was “take a few drops before meals” to lose 1 to 2 pounds a day “for multiple weeks.” The products also included another set of crucial instructions: it works best if you stick to a 500 to 800 calorie a day diet. (Hmmmmm, wonder if the low calorie recommended has anything to do with the weight loss.)
And the last nail in Wright’s coffin? Some ads also contained a few unsubstantiated scientific claims.
Speak With An FTC Compliance Attorney
Need a business lawyer with FTC compliance experience? Get in touch. Our firm has helped numerous dietary supplement marketers untangle themselves from FTC webs.