CBD Sellers Beware: FTC Issues Warnings on CBD Marketing Practices

By Ryan Coufal

On September 10th, 2019 the Federal Trade Commission (“FTC”) sent warning letters to three companies that sell oils, tinctures, capsules, “gummies,” and creams which contain cannabidiol (“CBD”), a chemical compound derived from the cannabis plant.  While the FTC did not identify the companies publicly, the letters warn that it is illegal to advertise a product that can prevent, treat, or cure human disease without reliable scientific evidence to support such claims. 

The companies’ websites claim that CBD products “’work like magic’ to relieve ‘even the most agonizing pain,’” are a “miracle pain remedy,” and are highly effective at treating “the root cause of most major degenerative diseases.”  The websites then promote that CBD treats a whole host of diseases including: cancer, Alzheimer’s disease, multiple sclerosis (MS), fibromyalgia, cigarette addiction, colitis, autism, anorexia, bipolar disorder, post-traumatic stress disorder, schizophrenia, anxiety, depression, Lou Gehrig’s Disease (ALS), stroke, Parkinson’s disease, epilepsy, brain injuries, diabetes, Crohn’s disease, psoriasis, AIDS, arthritis, and heart disease, with one of the websites even stating the treatment is “clinically proven.” 

In its letters the FTC instructs the companies to review all claims made about their products, including consumer testimonials, to ensure such claims are supported by competent and reliable scientific evidence.  Making such unsubstantiated claims can be in direct violation of sections of the FTC Act, 15 U.S.C. §§ 45(a) and 52, which regulate advertising.  Additionally, such claims can violate the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 321(g)(1)(B) which is regulate by the U.S. Food and Drug Administration (FDA).  On March 28, 2019 the FTC and FDA jointly sent similar warnings to three different CBD companies about their marketing practices, with the FDA taking the stance that such marketing practices are evidence that CBD products are intended to be used as drugs, which require extensive testing and FDA approval before marketing the products in such a manner.  Making a claim that CBD is a drug that can cure disease when it has not been approved by the FDA could create the potential for violation of the FDCA.

The FTC gave the latest three companies fifteen (15) days to notify the agency of the specific actions they have taken to correct the agency’s concerns.  Companies that sell CBD products should take note of the marketing practices the FTC and FDA are regulating and review all claims made about their CBD products and ensure they are backed by reliable and competent scientific evidence, and ensure they are not marketing CBD products as drugs under the FDCA.

© 2019 Vandenack Weaver LLC
For more information, Contact Us

 

 

 

Tax Related Identity Theft Awareness

The holiday season is underway and while this is a time for family events and holiday parties, this is also the time that many identity theft scams occur. The Internal Revenue Service (IRS) started the process of alerting taxpayers about potential tax-related identity theft and to provide advice on how to prevent threats to your identity.

For prevention, the initial steps include ensuring use of security software on devices, use of secure wireless networks, and never providing sensitive data when replying to emails, texts, or pop-up ads. For individuals that are hit with tax-related identity theft, it may not become apparent until attempting to file taxes or receiving a notice from the IRS and finding out that a tax return has been filed on your behalf. When this occurs, file a complaint with the Federal Trade Commission (FTC) at https://www.identitytheft.gov/, file a report with the credit agencies, and contact the IRS. Importantly, regardless of the situation, ensure that your taxes are filed and paid, even if it requires filing in paper form.

Taking steps now to add layers of security for your social security number and other sensitive data can help prevent tax-identity theft in the future. If you have questions, please contact the attorneys at Vandenack Weaver LLC.

© 2016 Vandenack Weaver LLC
For more information, Contact Us

 

 

Initial Steps for Victims of Tax Related Identity Theft

As the 2016 tax season comes to a close, many taxpayers may have discovered they were victims of identity theft. Taxpayers often discover that they have been a victim of identity theft after they receive information that a tax return has already been filed using their social security number. If you are e-filing and a return has already been filed, your filing will likely be rejected. If the IRS suspects identity theft, you will receive Letter 5071C, which will request you verify your identity. Such verification can be completed online at https://idverify.irs.gov/IE/e-authenticate/welcome.do.

 After discovering that you have been a victim of identity theft, you should take multiple actions to protect your identity and correct any fraudulent returns with the IRS. It is recommended that you contact the FTC at identitytheft.gov and contact one of the major credit bureaus to place a fraud alert on your credit. If you have received a notice from the IRS or your attempt to e-file a return was denied, you should immediately contact the IRS. If your e-filing has been denied and you believe it is related to identity theft, you must complete Form 14039, Identity Theft Affidavit. Form 14039, a paper copy of your return, and any required payment of tax should be mailed to the IRS.

 If issues persist related to any fraudulently filed tax returns, additional information can be obtained from the IRS’s website, https://www.irs.gov/, or by contacting Vandenack Williams LLC.

© 2016 Vandenack Williams LLC
For more information, Contact Us