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Intermediaries and weight-loss scams

Chris Hoofnagle, professor of law in residence | March 4, 2010

The Federal Trade Commission found in 2002 that:

The use of false or misleading claims in weight-loss advertising is rampant. Nearly 40% of the ads in our sample made at least one representation that almost certainly is false and 55% of the ads made at least one representation that is very likely to be false or, at the very least, lacks adequate substantiation. The proliferation of such ads has proceeded in the face of, and in spite of, an unprecedented level of FTC enforcement activity, including the filing of more than 80 cases during the last decade.

This report contained a survey of a variety of media, and found that: “…based on our comparison of 1992 magazine ads with magazines ads for 2001, the number of products and the amount of advertising, much of it deceptive, appears to have increased dramatically over the last decade.”

If consumer education is failing to prevent the proliferation of these schemes, and if all the enforcement power in the world cannot stop them, why not think about a different approach — to what extent should advertising intermediaries, like direct mail houses, broadcasters who air infomercials, newspapers, and online advertisers be liable for weight loss scams? Joanne Ikeda describes how she wrote to the Federal Trade Commission and a newspaper about a weight loss scam; she got a response from the FTC, but what about the newspaper? If a newspaper’s job is to inform the citizenry, is it ethical for it to profit through misinforming them in ways that are potentially harmful? And does this lucrative advertising create incentives to avoid critical investigation and reporting on weight loss scams?

Free speech advocates oppose intermediary liability, on both practical and principled grounds. They argue that the volume of ads, especially online, makes it impossible to engage in editorial review. However, this assertion is false both online and off — newspapers do have advertising clearance standards. Sometimes they are completely arbitrary, and in fact, if you want to see a free speech zealot forget about the value of free expression, just try to place a print advertisement in his newspaper that criticizes another major advertiser.

And as I wrote in an article about Google’s privacy attitudes, online companies review advertisements too. For instance, Google simply won’t allow ads for some products. Their policy seems to allow some weight loss products, but “miracle cures,” which would encompass some weigh loss scams, are clearly prohibited. In fact, Google seems to be able to manage dozens of advertising exclusions, even online, where rules are impossible, according to some.

Having tried many other options, we should consider whether the intermediaries profiting from these scams deserve some critical attention.