Rite Aid agreed to settle FTC charges that the pharmacy deceptively advertised that its Germ Defense tablets and lozenges could prevent or treat colds and the flu.
Rite Aid touted its private label "Germ Defense" products as similar to the brand name products -- Airborne, which previously settled deceptive advertising charges with the FTC last year. Rite Aid agreed to pay $500,000 in refunds to consumers, and agreed not to claim that any private label food, drug, or dietary supplement can reduce the risk or severity of colds or flu unless the claims are truthful and substantiated by reliable scientific evidence. FTC Chairman Jon Leibowitz stated, "this is one 'cold remedy' that works."
Private label products have been a growing income source for retailers in the last several years. Claims made on the packaging of retailers' private label products often mirrors claims made by name brands. Retailers should be cautious, however, about situations like this one, in which the claims made by the brand name product are unsupported. This is especially a concern for health-related claims, which have come under increased scrutiny recently.