Markets Wired

As part of its ongoing efforts to stop over-hyped advertising claims, the Federal Trade Commission has filed false advertising charges against the marketers of Your Baby Can Read! – a program that was widely touted in infomercials and on the Internet.  The program uses videos, flash cards, and pop-up books that supposedly teach children as young as nine months old how to read.  Two of the three defendants in the case have agreed to settle with the FTC.

The FTC complaint charges Your Baby Can, LLC, its former CEO, and the product’s creator with false and deceptive advertising, for claims in ads and product packaging that the program could teach infants and toddlers to read and that scientific studies proved the claims.  The complaint also charges company principal and product creator Robert Titzer, Ph.D, with making deceptive expert endorsements.  Your Baby Can and Titzer represented that the program taught children as young as nine months old to read; gave children an early start on academic learning, making them more successful in life than those who didn’t use it; and that scientific studies proved these claims, according to the complaint.

In addition to Titzer and Your Baby Can, the complaint names as a defendant Hugh Penton, Jr., who served as president and chief executive officer of the company until March 2010.

Penton and Your Baby Can have agreed to settle the FTC’s charges.  The agency is initiating litigation against Titzer in federal court.

The settlement with Penton and Your Baby Can, LLC prohibits the Carlsbad, California-based defendants from further use of the term “Your Baby Can Read.”  The settlement also imposes a $185 million judgment, which equals the company’s gross sales since January 2008.  Upon Your Baby Can’s payment of $500,000, the remainder of the judgment will be suspended due to the company’s failing financial condition.  Your Baby Can has represented that it is going out of business.  If it is later determined that the financial information the company gave the FTC was false, the full amount of the judgment will become due.

According to the complaint, the defendants sold the Your Baby Can Read! program to parents and grandparents of children aged three months to five years since at least January 2008, charging about $200 for each kit and taking in more than $185 million, directly via a toll-free number and their own websites.  The defendants   marketed the program on YouTube, Twitter, and Facebook, and television infomercials and ads on network and cable stations such as Lifetime, Discovery Kids, Disney DX, Cartoon Network, and Nickelodeon.  It also was available for purchase online at Amazon.com and BabiesRUs.com, as well as, at retail stores nationwide, including Wal-Mart, Kmart, Walgreens, Buy Buy Baby, Toys “R” Us, and BJ’s Wholesale Club. 

One 30-minute television infomercial featured a home video of a two-year-old girl who used the program and is purportedly reading a page from the children’s book Charlotte’s Web.  The girl’smother then appears, saying that when her daughter was three years old, “she read her first Harry Potter book and she fell in love with it.”

According to the complaint, the defendants failed to provide competent and reliable scientific evidence that babies can learn to read using the Your Baby Can Read! program, or that children at age three or four can learn to read books such as Charlotte’s Web or Harry Potter.

The settlement order against Penton and Your Baby Can LLC prohibits them from misrepresenting the benefits, performance, or efficacy of any product or service for teaching reading or speech, or enhancing language ability, cognitive ability, school performance, or brain development.  They also are barred under the settlement from misrepresenting that scientific support exists for such assertions.

The Commission vote authorizing the staff to file the complaint against Titzer, Penton, and Your Baby Can, LLC, and approving the proposed consent judgment with Penton and Your Baby Can, LLC was 5-0.  The documents are being filed in the U.S. District Court for the Southern District of California.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendant has actually violated the law.  The settlement order is for settlement purposes only and does not constitute an admission by the defendant that the law has been violated.  Settlement orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

(FTC File No. 1123045)