Cosmetic Companies Agree to FTC Settlement After Promoting Products as ‘All Natural’

The Federal Trade Commission announced on April 12 that it reached settlement agreements with four companies that market skin care products, shampoos, and sunscreens online over charges that they falsely claimed that their products are “ALL NATURAL” or “100% NATURAL,” despite the fact that they contain synthetic ingredients.

The Commission voted unanimously to issue each administrative complaint and to accept the four proposed settlement agreements. The Commission has also issued a complaint against a fifth company, California Naturel, for making similar claims. A copy of the FTC’s press release announcing the settlement agreements can be found here.

Under the proposed settlements, each of the four companies is barred from making similar misrepresentations in the future and must have competent and reliable evidence to substantiate any ingredient-related, environmental, or health claims it makes.

The FTC’s Director of its Bureau of Consumer Protection Jessica Rich stated that ‘All NATURAL’ or ‘100% NATURAL’ means just that — no artificial ingredients or chemicals” and that other companies should “take a lesson from these cases.”

According to the FTC complaint, the following companies made the noted all-natural claims in online advertisements:

  • Trans-India Products, Inc., markets “ALL NATURAL HAND AND BODY LOTION” and “ALL NATURAL MOISTURIZING GEL” directly and through third-party websites. The lotion contains Dimethicone, Ethyhexyl Glycerin, and Phenoxyethanol. The gel contains Phenoxyethanol.
  • Erickson Marketing Group uses its website to promote “ALL NATURAL” products such as the “NATURAL FACE STICK,” which contains Dimethicone, Polyethylene, and other synthetic ingredients.
  • ABS Consumer Products, LLC markets haircare products on its websites. It makes “ALL NATURAL” claims for products including “COCONUT SHEA ALL NATURAL STYLING ELIXER” and “JOJOBA MONOI ALL NATURAL SHAMPOO.” However, the products contain a range of synthetic ingredients such as Polyquaternium-37, Phenoxyethanol, Caprylyl Glycol, and Polyquaternium-7.
  • Beyond Coastal uses its website to sell its “NATURAL SUNSCREEN SPF 30,” describing it as “100% NATURAL.” However, it also contains Dimethicone.
  • California Naturel, Inc. supposedly sells “ALL NATURAL SUNSCREEN” but product contains Dimethicone. The Commission’s complaint against California Naturel seeks relief similar to that proposed in the above noted settlement agreements. 

The proposed consent orders bar the four settling respondents from misrepresenting the following when advertising, promoting, or selling a product:

  • a) whether the product is all natural or 100 percent natural;
  • b) the extent to which the product contains any natural or synthetic components;
  • c) the ingredients or composition of a product; and
  • d) the environmental or health benefits of a product. 

The orders also require the respondents to have and rely on competent and reliable evidence to support any product claims they make. Some claims require scientific evidence, which is defined as tests, analyses, research, or studies that have been conducted and evaluated objectively by qualified individuals using procedures generally accepted in the profession to yield accurate and reliable results.

Over the past 15 years, claims that a product is “natural” or “all-natural” have become more common for use in promoting personal care products, in part, because the FDA, which regulates cosmetics, has never published a regulatory definition for “natural” in the context of FDA-regulated products – leaving a “gray area” as to what types of products can be promoted as “natural.” 

Moreover, the rise in number of cosmetics being promoted as “natural,” has given rise to greater scrutiny from regulators resulting, as we now see, in an increase in FTC enforcement based on a lack of adequate substantiation for making such claims. Thus, the cosmetics industry has been put on notice that they too may be subject to FTC enforcement for promoting products as “natural” unless they possess substantiation that adequately supports such claims.   

The FTC is expected to publish a description of the consent agreement packages in the Federal Register shortly and will then be subject to public comment  through May 12, 2016, after which the Commission will decide whether to make the proposed Consent Orders final.

We continue to follow both FDA and FTC enforcement and regulatory activity related to FDA regulated products. 

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