Stay ADvised: GLP-1 Claims, Hidden Fees & "Made in USA"
In This Issue:
- A "Smarter" Claim? NAD Says Context Matters
- Heavy Metals, Heavy Scrutiny: Texas AG Launches Industry-Wide Protein Powder Investigation
- FTC Grounds Hopper's Deceptive Fee Charges For $35 Million
- FTC Warns Businesses Big and Small It's "Committed" to Enforcing Made in USA Law
- Iowa AG Alleges Temu Used Deceptive Marketing to Drive Sales—and Data Collection
A "Smarter" Claim? NAD Says Context Matters
"A Smaller Dose. A Smarter Start." Noom used this tagline to promote its Microdose GLP-1 weight-loss program. Was it non-actionable puffery, or did it convey an objective health-related message requiring substantiation? The National Advertising Division (NAD) considered that question following a challenge by competitor Eli Lilly and Company, which argued that the advertising conveyed that Noom's lower-dose approach offered meaningful treatment benefits—including effective weight loss with improved tolerability—as compared to standard FDA-approved GLP-1 dosing regimens. The social media ads featured the claim alongside an image of tweezers holding a vial prominently labeled "Microdose" and "GLP-1."
At the outset, NAD noted that the word "smarter" may constitute puffery when used in isolation, but context can transform an otherwise subjective slogan into an objective claim requiring substantiation. The question was whether "A Smarter Start" was tied to an objective and measurable product attribute—namely, the product's "smaller dose." Turning to precedent, NAD cited Royal Oak Enterprises LLC (Royal Oak Super Size Briquets), in which it held that the claim "A Bigger Briquet is a Better Briquet" was not puffery because the vague superiority term ("better") was expressly linked to a measurable attribute ("bigger").
Context Drives Interpretation
Likewise, NAD concluded that one reasonable message conveyed by "A Smaller Dose. A Smarter Start." was that the product is "smarter" because of its smaller dosage. The claim appeared immediately above a prominently displayed vial labeled "Microdose" and "GLP-1," causing the vague superiority term ("smarter") to become tied to a measurable product attribute ("smaller"). Even though the advertisement lacked express linking language like "bigger is better," NAD found that the phrases appeared in direct succession and that the imagery reinforced the connection. Noom argued that consumers would instead understand "A Smarter Start" as referring to its overall behavior-change program, but NAD concluded that references to the broader program were not sufficiently prominent to override the dosage-related message. In some versions of the advertisement, those program references were absent altogether. As NAD reiterated, advertisers must substantiate all reasonable interpretations of their claims, not merely those messages they intended to convey.
Importantly, NAD also looked beyond the face of the social media advertisements themselves. The landing pages linked from the ads repeatedly described the microdose approach as being "easy on your body" and designed to "minimize side effects," reinforcing the message that the smaller dose was what made the program the "smarter" option. Evaluating the net impression created by both the advertising and the linked content, NAD concluded that one reasonable consumer takeaway was that the lower-dose approach provides a measurable health-related benefit—namely, that it remains an effective way to begin weight-loss treatment while offering improved tolerability through fewer side effects. That message, NAD said, required competent and reliable scientific evidence, which Noom did not have. NAD therefore recommended that Noom discontinue the claim or modify it to avoid conveying that its lower-dose program itself provides a measurable health benefit that makes it a "smarter" way to begin treatment.
Key Takeaways
This decision further develops NAD's "puffery in context" jurisprudence. Royal Oak established that a vague superiority claim may require substantiation when expressly tied to a measurable product attribute. Here, NAD explained that the connection need not be grammatically explicit. Context—including the proximity of the phrases, the accompanying imagery, and even linked landing pages—can create the required connection between a puffery term and an objective product attribute
Heavy Metals, Heavy Scrutiny: Texas AG Launches Industry-Wide Protein Powder Investigation
Texas Attorney General Ken Paxton has launched an industry-wide investigation into the marketing practices of protein powder manufacturers following recent reports identifying elevated levels of heavy metals in certain popular products. According to the attorney general's announcement, the investigation will examine whether manufacturers violated the Texas Deceptive Trade Practices Act by falsely marketing or misrepresenting the safety of their products or by failing to disclose information about heavy metal contamination to consumers.
The investigation follows two widely publicized testing reports. Consumer Reports analyzed 23 protein powders and ready-to-drink shakes and reported elevated levels of lead, cadmium, and arsenic in several products. Separately, the Clean Label Project tested more than 160 protein powders and reported that nearly half exceeded California Proposition 65 thresholds for one or more heavy metals in a single serving. Citing those reports, Attorney General Paxton announced that his office will investigate whether manufacturers knowingly marketed their products as safe while failing to disclose elevated levels of heavy metals.
Attorney General Paxton's press release neither alleges that any particular manufacturer violated the law nor identifies specific products that will be the focus of the investigation. Nevertheless, as it has in other investigations initiated over the last year, the announcement signals that Texas is looking beyond product composition itself and focusing on whether advertising, labeling, and other marketing communications accurately convey product safety and omitted information that consumers would consider material.
Key Takeaways
This investigation is the latest example of state attorneys general using broad consumer protection statutes to scrutinize product safety representations in industries receiving heightened public attention. Notably, the investigation appears to be driven largely by third-party testing reports rather than findings by a federal regulator. Whether or not the investigation ultimately results in litigation, it serves as a reminder that independent testing can quickly become the catalyst for private plaintiff and government inquiries into advertising and labeling practices. Companies making product safety, purity, or quality claims should therefore be prepared not only to substantiate those claims, but also to evaluate how they would respond if outside testing produces results that differ from their own testing data.
FTC Grounds Hopper's Deceptive Fee Charges For $35 Million
Travel booking app Hopper has agreed to pay $35 million to settle Federal Trade Commission allegations that it used deceptive website design to trick consumers into paying hidden fees and misrepresented the benefits of several premium travel services. The case is also one of the FTC's first enforcement actions under its new Rule on Unfair or Deceptive Fees.
According to the FTC, Hopper marketed itself as having "no hidden fees," "zero hidden fees," and prices that "include all fees," while designing its checkout process so consumers would unknowingly pay additional "Tip" and "VIP Support" charges. The complaint alleges that these fees were preselected by default, located below the visible portion of the checkout screen, and could be avoided only if consumers scrolled down and manually turned them off. Consumers who simply followed the prominent "Swipe to Book Flight" prompt allegedly incurred the charges without realizing they had been added. Hopper showed consumers a total price that did not include the hidden, pre-selected fees.
The FTC further alleges that Hopper intentionally adopted these designs because they increased revenue. According to the complaint, internal testing showed that converting the Tip charge from a mandatory fee to an "optional" preselected fee doubled consumer conversion. The complaint also quotes internal emails in which employees described the checkout flow as "tricking users" and expressed concern that the interface was deceptive, while executives allegedly acknowledged that the fees represented a significant—or even essential—source of company profits. Even if the consumer cancelled and sought a refund, Hopper retained the Tip and VIP Support fees and refunded them only if consumers noticed and specifically requested a refund of each fee by name.
The complaint also challenges Hopper's marketing of two premium services. Hopper advertised VIP Support as providing guaranteed customer assistance "instantly" or within minutes, but the FTC alleges that many consumers experienced lengthy delays or could not reach a representative at all. Likewise, Hopper promoted its Price Freeze product as allowing consumers to "freeze" or "lock in" airfare with a deposit, even though the product did not guarantee availability and price protection was capped at $300 per traveler—a limitation allegedly disclosed only in fine print.
In addition to paying $35 million for consumer redress, Hopper agreed to stop misrepresenting fees and premium services, obtain consumers' express informed consent before imposing fees, clearly disclose material charges, and comply with the FTC's Fees Rule going forward.
Key Takeaways
This case goes well beyond traditional "junk fee" enforcement. The FTC's theory is that interface design itself can be deceptive. Even though consumers technically could opt out of Hopper's Tip and VIP Support charges, the FTC alleges that the checkout flow was intentionally engineered so that most consumers would never see the fees before completing their purchase.
The complaint also illustrates the types of evidence the FTC finds persuasive. Rather than relying solely on consumer confusion, the agency points to Hopper's A/B testing, internal discussions acknowledging the deceptive nature of the design, consumer complaints, and the substantial revenue generated by the challenged practices. For advertisers, the lesson is clear: if a user interface is designed to steer consumers toward paying optional charges, they are unlikely to notice, the FTC may view that design itself as a deceptive "dark pattern"—particularly when the company simultaneously advertises that it has "no hidden fees."
FTC Warns Businesses Big and Small It's "Committed" to Enforcing Made in USA Law
Continuing its aggressive enforcement of Made in USA advertising, the Federal Trade Commission (FTC) has issued warning letters to seven companies whose products allegedly contain significant imported components despite being marketed as "Made in USA"—or, in one case, "Made in Texas."
The letters were sent to A&F Drum Company LLC, Z-Tech Advanced Technologies Inc., Vtron Inc., Helmel Engineering Products Inc., NebTech Inc., Lucky Bar Holdings LLC, and My Vape Order Inc. According to the FTC, it has reason to believe the companies may be violating Section 5 of the FTC Act and the Made in USA Labeling Rule because the products appear to contain imported parts or materials that are inconsistent with unqualified domestic origin claims.
The letters reiterate the FTC's longstanding position that an unqualified "Made in USA" claim requires a product to be "all or virtually all" made in the United States. In addition to requiring that final assembly or processing occur domestically, the FTC expects that virtually all significant components and ingredients also be of U.S. origin.
The warning letters illustrate how demanding that standard can be. For example,
- The FTC challenged Helmel Engineering's "Made in USA" claims for its coordinate measuring machines because they allegedly incorporated imported castings, bearings, electronics, switches, wiring, and other significant components.
- Similarly, the FTC questioned A&F Drum Company's "Made in Texas" claims because its drums (snares, full kits, cymbals) allegedly contained imported steel shells, hoops, lugs, tension rods, and other components.
These examples underscore the FTC's view that substantial domestic manufacturing or assembly alone generally is not enough to support an unqualified domestic-origin claim if significant components are sourced abroad.
The FTC directed each company to review its advertising and labeling and, within five business days, either discontinue any deceptive origin claims or explain why it believes its claims comply with the law. The letters warn that failure to correct any violations could result in enforcement action, including civil penalties under the Made in USA Labeling Rule.
Key Takeaways
These warning letters are the latest step in the FTC's renewed focus on Made in USA enforcement, following three enforcement actions announced earlier this year and President Trump's March executive order directing the FTC to prioritize enforcement against deceptive domestic-origin claims. See our prior articles here, here, and here.
More importantly, the letters demonstrate how rigorously the FTC continues to apply the "all or virtually all" standard. Even companies that perform substantial manufacturing or assembly in the United States may not meet the requirements for making an unqualified Made in USA claim if key components or materials are imported. The FTC's willingness to challenge both "Made in USA" and "Made in Texas" claims also signals that advertisers should not expect state-specific origin claims to receive more lenient treatment than nationwide origin claims.
For advertisers, the lesson is clear: before making an unqualified domestic-origin claim, companies should carefully evaluate the origin of their components, ingredients, and manufacturing processes—not just where final assembly occurs—to ensure the claim can withstand FTC scrutiny.
Iowa AG Alleges Temu Used Deceptive Marketing to Drive Sales—and Data Collection
Joining a growing number of states scrutinizing Temu's business practices, Iowa Attorney General Brenna Bird has filed an expansive lawsuit alleging that the online marketplace violated the Iowa Consumer Fraud Act through a combination of deceptive marketing practices and undisclosed consumer data collection. While much of the 86-page complaint focuses on "privacy-invasive conduct," Iowa also alleges that Temu employed a wide range of deceptive advertising and marketing tactics designed to increase consumer engagement, purchases, and ultimately the amount of data collected from users.
According to the complaint, Temu's marketing practices extend well beyond allegedly misleading statements about individual products. Iowa alleges that the company routinely advertised products that differed materially from what consumers ultimately received, used false reference prices to create the illusion of deep discounts, charged consumers for merchandise they did not order or never received, published fabricated or misleading five-star reviews, and employed gamified promotions, store-credit offers, and sign-up incentives that it allegedly failed to honor. The complaint also challenges alleged intellectual property infringement and "green" marketing representations as additional deceptive practices.
Notably, Iowa ties these marketing allegations directly to its privacy claims. The complaint alleges that Temu's low prices, promotional games, referral incentives, and other engagement tactics were designed not only to drive sales, but also to encourage consumers to spend more time using the app, thereby increasing Temu's opportunity to collect detailed personal information from users' devices. In other words, Iowa characterizes the allegedly deceptive marketing practices as part of a broader strategy to facilitate data collection without users' consent.
The complaint's privacy allegations are extensive. Iowa alleges that forensic analysis of the Temu app revealed undisclosed collection of information such as users' precise location, nearby Wi-Fi networks, installed applications, stored accounts, and other device data, and further alleges that the app was engineered to conceal portions of its data collection from users and security researchers. The State also contends that Temu's ties to its Chinese parent company increase the potential risks associated with the alleged data collection. Temu denies wrongdoing, and these allegations have not been adjudicated.
Iowa seeks injunctive relief, restitution, disgorgement, and civil penalties of up to $40,000 per violation under the Iowa Consumer Fraud Act.Key Takeaways
Although the complaint devotes significant attention to privacy, its broader significance for advertisers is the State's effort to treat numerous marketing practices as components of a single deceptive consumer experience. Rather than challenging isolated advertisements, Iowa alleges that Temu's product representations, pricing claims, consumer reviews, promotional mechanics, and loyalty incentives collectively misled consumers while simultaneously encouraging greater engagement with the platform.
The case also reflects an emerging enforcement trend in which state attorneys general use privacy investigations to bolster traditional deceptive advertising claims. For companies operating online marketplaces or retail platforms, the complaint serves as a reminder that pricing practices, consumer reviews, promotional mechanics, and user-engagement features increasingly may be evaluated together—not as separate compliance issues, but as part of an integrated consumer protection analysis.