Consumer Health Digest, Issue #22-13 (original) (raw)

Consumer Health Digest is a free weekly e-mail newsletter edited by William M. London, Ed.D., M.P.H., with help from Stephen Barrett, M.D., It summarizes scientific reports; legislative developments; enforcement actions; other news items; Web site evaluations; recommended and nonrecommended books; research tips; and other information relevant to consumer protection and consumer decision-making. The Digest’s primary focus is on health, but occasionally it includes non-health scams and practical tips. Items posted to this archive may be updated when relevant information becomes available. To subscribe, click here.

Please support better regulation of multilevel marketing. The Federal Trade Commission (FTC) is soliciting public comments on the need for a regulation concerning earnings claims in multilevel marketing (MLM), coaching, education, “gig” work, and other types of business or money-making opportunities. Deceptive earnings claims are common in the MLM industry, where opportunities are hyped and most distributors lose money. Currently, however, most MLM opportunities are exempt from the pre-sale disclosure requirements of the FTC’s Franchise Rule as well as its Business Opportunity Rule. Many MLMs also make misleading product claims, including claims about dietary supplements. The FTC has periodically brought enforcement actions against individual MLM companies under its general authority to protect consumers from “unfair or deceptive” practices, but it does not have the resources to investigate every MLM company that makes deceptive earnings or product claims. You do not have to be involved in MLM or any of the other targeted businesses to submit a comment. Nor do you have to be a United States citizen. Moreover, you do not have to limit your comment to the issue of deceptive earnings claims. The FTC should be encouraged to broaden its focus on unfair or deceptive practices in the MLM industry and to craft a regulation that will better protect consumers from both deceptive earnings claims and deceptive product claims. Comments must be received on or before May 10, 2022. The FTC’s advance notice of proposed rulemaking on “Deceptive or Unfair Earnings Claims” provides instructions on submitting comments.

Dissolvable oral film strip scheme banned. A federal district court in California has ordered a stop to the illegal tactics used by marketers who promoted dissolvable oral film strips as effective smoking-cessation, weight-loss, and sexual-performance aids. In court, the Federal Trade Commission (FTC) prevailed on all 16 counts in its complaint against Jason Cardiff, Eunjung Cardiff, and seven entities they control, doing business as Redwood Scientific Technologies. The court’s permanent injunction severely restricts their future conduct related to false advertising, fake testimonials, and unauthorized charges. It also bans them from:

• marketing, advertising, and selling dissolvable oral film strips directly to consumers
• making unsubstantiated claims about the health benefits of goods and services
• deceptively claiming that they have proof regarding any health claim
• failing to properly disclose auto-ship programs sold online in violation of the Restore Online Shopper’s Confidence Act
• deceptively claiming that an endorser is a real consumer
• deceptively claiming that any product is made in the U.S.
• engaging in multi-level marketing and making false earnings claims
• making any other misrepresentation regarding total costs, refund policies, or material restrictions or limitations connected with a sale of goods and services
• making robocalls
• using negative-option marketing

The court also entered a default judgment against seven corporate defendants that acted together with the Cardiffs as a common enterprise. This judgment imposes the same conduct provisions the court imposed in its order against the Cardiff defendants.

Although the FTC presented evidence that consumers lost $18.2 million to the defendants’ deceptive marketing, the court declined to order any compensation because of the Supreme Court’s recent ruling in the case of AMG v. FTC, which undercuts the agency’s authority to obtain such consumer redress. [Federal court rules in favor of FTC, halting illegal tactics used to promote smoking cessation, weight-loss, and sexual-performance aids. FTC press release, March 25, 2022]

Nearly 1 in 10 U.S. adults owe significant medical debt. Although 90% of the United States population has some form of health insurance, data from the Survey of Income and Program Participation show that:

• about 23 million people (nearly 1 in 10 U.S. adults) owe at least 250inmedicaldebt,andmostpeoplewithmedicaldebtoweatleast250 in medical debt, and most people with medical debt owe at least 250inmedicaldebt,andmostpeoplewithmedicaldebtoweatleast1,000
• total medical debt in the U.S. is at least $195 billion
• about 16 million people (6% of U.S. adults) owe more than $1,000 in medical debt
• about 6 million people (2% of U.S. adults) owe more than $5,000 in medical debt
• about 3 million people (1% of U.S. adults) owe medical debt of more than $10,000
• people with disabilities, those in worse health, middle-aged adults, Black Americans, people living in the South or in Medicaid non-expansion states, and poor or near-poor adults, are more likely to owe significant medical debt
• 11% of women and 8% of men reported having medical debt, the difference probably due to childbirth expenses and lower-than-average income among women

Difficulty in capturing data from people who owe high levels of debt makes estimates of total medical debt imprecise. [Rae M. and others. The burden of medical debt in the United States. Peterson-Kaiser Family Foundation Health System Tracker, March 10, 2022]

Many insured households lack financial resources to pay medical bills. An analysis of the 2019 Survey of Consumer Finances, a triennial, nationally representative household survey conducted in the United States by the Federal Reserve Board, has concluded:

• most households’ savings were less than the maximum out-of-pocket limit allowed for most private plans
• lower-income households had less savings than the typical deductibles seen in employer plans
• many households did not have enough assets to pay typical health-plan deductibles and most cannot afford to meet high deductibles
• few lower-income individuals had the assets to meet deductibles typical in employer plans
• nearly one-third of households did not have enough savings to pay typical deductibles in employer-based coverage
• many people would have needed to borrow to cover a $400 emergency expense
• many people with employer coverage report making sacrifices to cover health expenses

[Young G. and others. Many households do not have enough money to pay cost-sharing in typical private health plans. Peterson-Kaiser Family Foundation Health System Tracker, March 10, 2022]

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