Stay ADvised: Brand Protection & Advertising Law News
In This Issue:
- OnlyFans Users Sue Over Iffy Auto-Renewal Subscriptions
- Nothing Green About This Avocado (Mattress), Claims Lawsuit
- From Soup to Nuts, Long-Term Survival Food Kit Maker Defends a Veritable Smorgasbord of Claims
- NAD Untangles Hairy Matter of Shark Vacuum Efficacy and Odor Claims
OnlyFans Users Sue Over Iffy Auto-Renewal Subscriptions
OnlyFans is a subscription-based site that touts itself as being the place for content creators to monetize their content and connect creators with fans. But all may not be as rosy as promised for some users who claim the site signs up unwitting consumers for automatically renewing subscriptions. According to the complaint, it does so without clear recitation of the terms of the offer, without consumers' affirmative consent before charging consumers' payment accounts, and further makes it difficult to cancel—all the kinds of conduct the FTC has been particularly vigilant about of late.
This lawsuit looks to California's Automatic Renewal Law (the "ARL") for redress. According to the complaint, these deceptively obtained auto-renewing subscriptions cost users anywhere from $1.99 to $49.99 per month. Echoing FTC enforcement, rulemaking, and guidance, plaintiffs allege OnlyFans' entire subscription process employs problematic and deceptive dark patterns. According to the complaint, not only does the website fail to provide clear and conspicuous information regarding the terms of its subscription offerings, it fails to provide the terms at all during the sign-up process—not on the sign-up page, nor on the pay window, nor anywhere else in the subscription enrollment page.
The plaintiffs further claim that the OnlyFans subscription cancellation process violates the ARL because there is no one-step "prominently located" cancellation button or link available to users on their profile or account settings, nor are users given an "immediately accessible" pre-written cancellation email to easily cancel the subscription. Instead, OnlyFans allegedly makes its subscription cancellation process cumbersome and confusing by requiring users to undertake a multi-step and counterintuitive procedure to cancel subscriptions.
The website content and flow are designed—say plaintiffs—to capitalize on a lucrative subscription market which has garnered the company significant profits. It's a deliberate decision based on industrywide knowledge that even when consumers aren't interested in renewing their subscriptions, complicated cancellation policies make it too difficult for consumers to cancel, say plaintiffs. In other words: OnlyFans knows that the "real money is in the inertia."
The complaint further alleges that OnlyFans goes one step further in violation of the ARL as it not only fails to provide the complete subscription offer terms in a clear and conspicuous manner and in visual proximity to the request for consent prior to the purchase, but it also fails to provide a post-purchase acknowledgement to users that includes the subscription offer terms, describes the cancellation policy and explains how to cancel.
The allegations in the complaint seem generally consistent with the Federal Trade Commission's guidance that "when designing user interfaces, businesses should look not just at the effect their design choices have on sales, click-through rates, or other profit-based metrics, but also on how those choices affect consumers' understanding of the material terms of the transaction." California law may be one step ahead of the FTC for now, but just this past March the agency sought public comment on a notice of proposed rulemaking seeking to require companies, inter alia, to make it even easier to cancel subscriptions. Whether it be California or the Feds, regulators are looking for ways to curb the all-too-prevalent practice of manipulating consumers into agreeing to automatically renewing subscription terms or otherwise making it difficult to cancel them.
Nothing Green About This Avocado (Mattress), Claims Lawsuit
Avocado Green Mattress, a company billing itself as aligned with all things "green," sustainable, organic, and toxin-free, is now facing a class action lawsuit in the Northern District of California alleging that its marketing is bogus and the company has engaged in false advertising. According to the lawsuit, the company's products are in fact toxin-filled, and Avocado Green's "longstanding, pervasive" claims that it sells "naturally nontoxic [products with] 100% certified organic materials," made with "organic, 100% natural latex rubber" and "only the finest certified organic, natural, and non-toxic materials," are false.
Far from constituting "one of the world's most sustainable brands," the complaint alleges that plaintiffs' test results show that "[a]t virtually every stage of the latex manufacturing process—from harvesting and stabilization to vulcanization and drying—Avocado uses synthetic chemicals to create its products. These chemicals—some of which are known toxins—end up in the" mattresses and other company products.
Plaintiffs zero in on Avocado's promotion of its products as "MADE SAFE Certified," alleging that this designation is misleading to consumers. Avocado claims the designation denotes products "developed with 100 percent healthy ingredients" and without harmful substances. But the complaint alleges that this characterization is false because the MADE SAFE certification denotes only that the products have been cross-referenced against a database of known toxic chemicals. Plaintiffs further suggest that the company misled MADE SAFE, noting that "it's unclear" how the company even received this designation since—at least according to the complaint—the mattresses contain multiple toxic chemicals.
Further, plaintiffs allege, Avocado advertises its products as an alternative to mattresses that use "petroleum-based" ingredients, while itself selling mattresses that contain "significant amounts of hydrocarbon oil," which they say is likewise petroleum-based.
Nor can Avocado claim ignorance about the toxic content of its products, say plaintiffs. The company advertises that it controls the entire Avocado mattress production chain and is fully aware of which chemicals end up in its products.
The lawsuit also alleges causes of action for violations of the Consumers Legal Remedies Act, unfair and deceptive trade practices, fraud, deceit and misrepresentation, unjust enrichment, and breach of contract.
Even if the allegations in the complaint don't tread water, any company marketing products to consumers willing to pay a premium for toxin-free products will find it damaging to face even the whiff of a suggestion that its products contain multiple toxic chemicals. Given widespread consumer interest in green products, and the hot greenwashing litigation trend, companies might want to be especially mindful that claims their products are "green" and "toxin-free" be airtight.
From Soup to Nuts, Long-Term Survival Food Kit Maker Defends a Veritable Smorgasbord of Claims
Advertiser My Patriot Supply (MPS) won some and lost some following a challenge at the National Advertising Division (NAD) to dozens of claims for its shelf-stable survival food kits, variously depicting its foods as healthy, fresh, delicious, nutritious, and otherwise desirable. Deciding a challenge brought by competitor 4Patriots, NAD closely parsed context and language in order to decide which were likely deceptive and which were not, keeping in mind that the food kits were "intended to allow consumers to survive long-term emergencies, such as major natural disasters and major power grid failures, where access to fresh food may be difficult or impossible." NAD made short shrift of claims for freeze-dried fruit kits such as, "Enjoy fresh strawberries even in an emergency," which NAD deemed expressly false. NAD explained that an assessment of consumer perception is unnecessary where a claim is literally false—so whether or not consumers are actually deceived is beside the point—freeze-dried products simply aren't fresh.
Showing once again that context is everything, NAD came to a different conclusion about some—but not all—of the claims for the company's black bean burger mix. In one instance, MPS claimed that "In an emergency, one of the first things to disappear from the shelves is fresh protein. With this Black Bean Burger Mix Bucket, running out of protein will be the last of your worries!" Here, NAD disagreed with the challenger that the claim implied MPS black bean burgers have "fresh protein." Assessing the claim from the vantage point of the reasonable consumer, NAD concluded they wouldn't likely take away the message that survival food contains "fresh" ingredients, in particular because the product was labeled as a "mix."
NAD came to a different conclusion, however, regarding imagery used in other Black Bean Burger ads which depicted an "enormous burger" with all the fixings, and did not use the magic word "mix." Here, NAD opined that reasonable consumers would see the image alongside the word "burger" and conclude that they'd be getting all of the ingredients shown with the burger—that is, the bun, fresh lettuce, tomatoes, and onions. NAD recommended the advertiser make clear in this context that the product was a mix.
NAD's differing determination regarding other food images used by MPS illustrates the importance of context. 4Patriots challenged a range of images used by MPS in advertising and on product labels depicting scrumptious tortillas, burgers, sour cream, and fresh fruits and veggies. NAD noted that it can be permissible to depict images of ingredients not actually contained in the product, as long as there is no confusion created about the contents of the product. Accordingly, the MPS products that clearly and prominently identified their contents were good to go: Reasonable consumers would understand that fresh food imagery for "meat substitute," "pancake mix" and "strawberry flavored" was only employed to show examples of complementary foods.
But wait, there's more. 4Patriots also challenged MPS's claims that its survival kits last for a certain number of days at 2000 plus calories per day, arguing that the claims were misleading because not accompanied by adequate disclosure of the fact that some people need more than 2000 calories per day. NAD noted that it had already examined a challenge to these same claims in a prior matter and found that MPS's disclosures were inadequate because they appeared infrequently, weren't always visible or shown near the claim, and weren't easy to read. Here, NAD found that MPS had improved on some disclosures to meet that burden, but in other places its disclosures still fell short.
"Where an advertiser repeats a claim in multiple locations, the required disclosure must be clear and conspicuous whenever a consumer sees the claim," explained NAD. Where MPS repeated the same claim multiple times and placed a disclosure nearby noting that some people may need more calories, or that the meals provide 2000 calories a day "on average," the disclosure was adequate. Where no such disclosure was made, or where the disclosure was placed far from the claim, NAD found the disclosure inadequate.
As it had in the prior matter, 4Patriots challenged the serving sizes depicted by MPS, calling them overstated. However, NAD noted that the serving size claims had shrunk since the last time NAD had examined these claims and found them unsubstantiated (picture 15 stacks of pancakes versus the current three), making the current claims reasonable.
Next, NAD examined the challenge to MPS's Made in the USA claim. 4Patriots argued that it was impossible that all MPS's ingredients were sourced in the USA (and that 4Patriots knew this from its own experience in the industry). In the course of the NAD proceeding, MPS narrowed the claim, when referring to products containing primarily imported food, to read "Made in the USA from Domestic and/or Imported ingredients." NAD concluded that MPS should add this disclosure to all the products containing any amount of imported ingredients, not just those primarily containing imported ingredients. NAD relied on the FTC's Made in USA labeling rule, which mandates that products can only be labeled as such if "all or virtually all ingredients…are sourced in the United States."
NAD also concluded that the advertiser's claims that the products were home-cooked were unsubstantiated. It rejected the argument that "most of its products are technically home-cooked because the consumer must engage in some level of cooking at home—namely boiling water." Some consumers may reasonably take away the message that the products were cooked in a kitchen by a cook, so the advertiser should discontinue these claims, the NAD determined.
Additionally, NAD reviewed claims made by MPS about the limited duration of sales (e.g., "Flash Sale!"), and recommended that MPS ensure that its time-limited sales are, in fact, time-limited.
4Patriot also challenged the product reviews displayed on the MPS website, noting a higher percentage of five-star reviews than on third-party retailer and other websites. 4Patriot also identified instances in which reviewers stated that unfavorable reviews had been deleted. NAD recommended that when MPS appears to publish all product reviews, it must publish all reviews, subject only to neutral content filtering for offensive language and the like.
First, NAD was not exhausted by the kitchen sink nature of the challenged claims. It carefully examined content and context and made clear that claims that won't work in some iterations, will in others. Second, and more importantly, advertisers might want to take more care than the advertiser appeared to do here when making claims.
NAD Untangles Hairy Matter of Shark Vacuum Efficacy and Odor Claims
The National Advertising Division (NAD) weighed in on a challenge by Dyson to claims made by SharkNinja, a competitor in the vacuum space.
The challenge involved claims, made in a 30-minute infomercial, that SharkNinja's Stratos vacuum suffered "no hair wrap" on its brushroll after cleaning, has superior hair pick-up ability and odor-neutralizing technology, and that its superior suction power equals superior floor cleaning performance.
During the informercial, SharkNinja advertised that the "self-cleaning brushroll technology removes hair from the brush as you clean, preventing hair wrap!" Alongside this express claim, SharkNinja depicted a consumer finding not a single hair on the brushroll after cleaning.
NAD noted that it had analyzed similar "No Hair Wrap" claims made by SharkNinja in a prior matter revolving around the same claims made about different products. It had in that case found that the "no hair claim" has a "literal and absolute meaning and, in another context, could reasonably convey a message that no hair will ever be present on the brushroll." In the present matter, the NAD determined that the "No Hair Wrap" claim reasonably conveyed the message that Stratos can pick up pet and long hair. As in the prior matter, Shark submitted testing that showed that Stratos in fact picked up human and pet hair from hard surfaces, and that at the conclusion of each test no wrapped hair appeared on the brushroll. NAD determined the message was substantiated.
Next NAD analyzed the claim that Stratos offers "The best hair pickup of any vacuum," regardless of the type of floor being vacuumed. As support for these claims, Shark provided confidential results of third-party testing it said showed that Stratos outperformed 17 leading competing vacuums in picking up hair from carpet. Here, however, NAD found the evidence did not substantiate the claim.
First, to substantiate such broad categorywide superiority claims, SharkNinja had to provide comparative testing against at least 85% of the relevant marketplace, and it had not done so. Further, in support of the claim that the Stratos has the "best hair pick-up of any vacuum," SharkNinja cited testing conducted only on vacuums advertising a self-cleaning brush or other "anti-tangle" technology. However, NAD found that this testing—which involved no human hair or testing on hard floors or carpet—was too narrow to support such broad, unqualified claims.
"In order to produce meaningful results for the purpose of claim support, product testing should be conducted under consumer relevant conditions, using an accepted methodology and protocols, and should relate directly to the advertising claims," said NAD.
NAD also examined the odor-neutralizing claim—that "Shark solves [the problem of vacuum odor] with a new and unique breakthrough odor neutralizer technology"—as well as an implied claim that this technology eliminates odor by destroying odor-carrying particles.
Ultimately, NAD concluded that although testing Shark provided as evidence showed a "perceptible reduction in malodor," the evidence fell short of supporting the odor-reduction message conveyed in the infomercial.
Further, although tests provided as evidence evaluated odor reduction in some competing vacuums, NAD noted that they "make no conclusion about the comparative odor reduction capabilities of the vacuums." Finally, there was no evidence presented that the vacuum could reduce odors without the cleaner head. For these reasons, NAD recommended that the claims be discontinued or modified to convey the supported message that the Shark odor-neutralization technology reduces bad odors (but does not neutralize them).
NAD here applied its oft-cited, tried-and-true analysis when reviewing product claims and the tests used to support them—it asked, is the support a good fit for the claim. Product testing used for claim support should be "conducted under consumer relevant conditions, using an accepted methodology and protocols, and should directly relate to the advertising claims." That is often easier said in principle than it is done in practice.