False PPE Claims Lead to FTC Enforcement Under Mail Order Rule

False PPE Claims Lead to FTC Enforcement Under Mail Order Rule

In the midst of the COVID-19 pandemic, a surge in demand for personal protective equipment (“PPE”) left many consumers scrambling to secure masks, hand sanitizers, and other essential items. However, some online sellers capitalized on this urgency by making false promises about product availability and delivery times. Two recent victories by the Federal Trade Commission (“FTC”) serve as a stark reminder of the importance of ethical marketing and the legal obligations businesses must uphold, particularly during times of crisis.

In August 2022, the FTC achieved significant wins against two companies, Glowyy (operated by QYK Brands) and American Screening LLC, for misleading consumers about their PPE offerings. These companies advertised products that were allegedly “in stock” and available for quick shipment, but they failed to deliver on these promises, leaving many customers waiting weeks or even months for their orders to be fulfilled. The FTC’s actions not only resulted in refunds for affected consumers but also sent a clear message that deceptive business practices would not be tolerated.

For businesses, this serves as an important reminder that transparency and compliance with consumer protection laws are critical, especially during challenging times. The FTC’s lawsuits against Glowyy and American Screening centered around violations of the Mail, Internet, and Telephone Order Rule (“Mail Order Rule”), which requires sellers to notify customers about delays in shipping and offer them the opportunity to cancel their orders and receive timely refunds. These rules exist to ensure that consumers are not misled or left in the dark about the status of their purchases. The companies’ failure to adhere to these requirements led to their downfall, with the court ruling in favor of the FTC and ordering the companies to provide substantial refunds to consumers.

The Glowyy case, for instance, illustrates the dangers of making unsubstantiated claims about product availability. The company promised that PPE products, such as hand sanitizers and face shields, would ship the same day they were ordered. However, the reality was far different. The company would create shipping labels but delay sending the items for weeks or even months. Furthermore, the company marketed a “Basic Immune IGG” supplement with claims that it could prevent or treat COVID-19, which lacked scientific backing. This false advertising not only violated consumer protection laws but also misled vulnerable consumers during a public health crisis.

Similarly, American Screening was found to have falsely promised that PPE products would be shipped within 24 to 48 hours, a claim they failed to back up with reliable processes. As a result, the company left many consumers and businesses waiting for orders that never arrived on time, and some customers received defective or incorrect products. In addition to the monetary relief awarded to consumers, American Screening was also subject to injunctive relief, requiring them to cease their deceptive practices and comply with consumer protection regulations going forward.

These cases highlight the importance of not just meeting customers’ expectations but also managing those expectations through clear communication and reliable service. Misleading promises and failure to deliver can not only harm your reputation but also lead to legal and financial consequences. The FTC’s enforcement of the Mail Order Rule and other consumer protection laws reflects the agency’s commitment to holding businesses accountable for deceptive practices, especially in times of crisis when consumers are most vulnerable.

For businesses, there are valuable lessons to take away from these actions. First, always ensure that your advertising is truthful and substantiated, especially when making claims about product availability, health benefits, or delivery timelines. False or exaggerated claims can quickly lead to legal issues and damage consumer trust. Second, it is crucial to establish processes that allow you to meet or exceed the promises you make to customers. If delays occur, notify customers promptly, offer them the option to cancel or receive a refund, and ensure that these changes are communicated clearly. Lastly, make sure that you are familiar with consumer protection regulations such as the Mail Order Rule, which provides essential guidelines for conducting business ethically and legally.

The FTC’s victories against Glowyy and American Screening show that businesses cannot afford to take shortcuts, particularly when it comes to consumer protection. With more than $17 million secured for consumers in these cases, the consequences of deceptive marketing are clear. For your business, this is a timely reminder to be transparent, comply with regulations, and prioritize customer trust above all else. In today’s competitive marketplace, ethical practices are not just good for your reputation, they’re essential for long-term success.

(Image Credit: iStock Photo)

This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.