Markets Wired

In response to a Federal Trade Commission complaint, a California-based marketer of a supplement consisting mainly of Vitamin C and herbal extracts has agreed to a preliminary order barring him from claiming that it is effective at treating, preventing, or reducing the risk of COVID-19.

Pending the resolution of a parallel administrative case, the proposed preliminary order also bars Marc Ching, doing business as Whole Leaf Organics, from claiming that three CBD-based products he sells are effective cancer treatments.

“There’s no proof that any product will prevent or treat COVID-19 or that any CBD product will treat cancer,” said Bureau of Consumer Protection Director Andrew Smith. “Let’s be clear: companies making these claims can look forward to an FTC lawsuit like this one.”

According to the FTC’s federal district court complaint, since at least December 2018, through Whole Leaf Organics, Ching has advertised and sold Thrive online, with a 50-capsule bottle selling for $36.99.

The federal court complaint states that beginning in or around March 2020 Ching started to market Thrive as an “anti viral wellness booster” that treats, prevents, or reduces the risk of COVID-19. In addition, the FTC alleges that Ching falsely represents that these benefits of Thrive are clinically proven; however, there is no scientific evidence that Thrive or any of its ingredients can treat, prevent, or reduce the risk of COVID-19.

The complaint also alleges that, since at least December 2018, Ching has used his Whole Leaf Organics website to advertise and sell three CBD-containing products, CBD-EX, CBD-RX, and CBD-Max. The first is an ingestible capsule consisting mainly of a combination of cannabidiol and herbal extracts. CBD-RX and CBD-Max are oils composed primarily of CBD and hemp extract. Thirty capsules of CBD-EX retail for $39.99 and CBD-RX and CBD-Max sell for between $75 and $125 per bottle.

Ching advertises all three CBD products as effective cancer treatments. According to the FTC’s complaint, however, Ching does not have the scientific evidence to back up the cancer-treatment claims, and therefore the advertisements are false or deceptive.

Stipulated preliminary orders have the force of law when approved and signed by a judge.

The Commission also has approved the issuance of an administrative complaint containing the same allegations about the health claims Ching made for Thrive and the CBD-based products. In the administrative case, the FTC is seeking an order permanently halting the allegedly deceptive advertising for Thrive, CBD-EX, CBD-RX, and CBD-Max.

The Commission vote authorizing the staff to issue an administrative complaint and seek a temporary restraining order and preliminary injunction was 5-0. The complaint seeking temporary relief was filed in the U.S. District Court for the Central District of California. The administrative case is scheduled to begin on January 7, 2021.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.