Equivalency Claims May Not Be Compliant

The NAD+ battles continue. In this National Advertising Division (NAD) competitor challenge case, several claims were challenged, and because the defending company did not properly respond to NAD with a compliance statement, NAD referred the case to the “proper” authorities, such as the FTC or state AGs. This is NAD’s “stick” as agencies like the FTC have deep authority and resources for scathing investigations. This is why participating in the NAD process is always a good idea.

Equivalency and front-of-pack claims can be misleading and noncompliant. This case centers on an “8,547MG” front-of-package claim that appears to have been derived by adding up equivalency numbers for the product’s extracts. For instance, the company treated 100 mg of a 20:1 extract as equivalent to 2,000 mg. In my view, that approach may mislead consumers and may also raise GMP compliance concerns, because the equivalency claims are embedded in both the Supplement Facts Panel and the “8,547MG” total.

I have also heard that Amazon is increasing scrutiny of equivalency claims, making this a good time for brands to review their Amazon ASINs before they risk delisting. As a side note, Apex Compliance® is being trained to identify these types of issues in just a few clicks, which is a great feature!

In this case, the advertiser argued that consumers could look to the Supplement Facts Panel to understand that the product does not actually contain more than 8+ grams per serving, but NAD disagreed.

From NAD case. “(the company) argued that consumers would look to the Supplement Facts Panel (SFP) for the product’s actual ingredient amounts, NAD found that the information contained in the SFP cannot effectively qualify an express claim when it contradicts that claim.”

To go a little deeper into equivalency claims, I think they should generally be avoided, especially when contained within the SFP. Perhaps, as long as the net impression wasn’t misleading, there may be a chance of being “allowed” elsewhere on the label. In this case, the total amount of the equivalency on the PDP obviously went too far.

What do you think about equivalency claims?
Yes, no, or “it depends.”

This product has several common demand letter and lawsuit targets, such as “Made in the USA” claims. In addition, the front-of-package statement lists the ingredient amount per serving (two capsules). When a serving includes more than one unit (capsules, tablets, or gummies), clearly disclosing that on the front label, such as “25 mg CoQ10 per two capsules,” can help mitigate litigation risk.

Read the NAD case here.