PPAI’s Virtual Product Responsibility Summit Begins With A Focus On Federal Agencies And Their Oversight

PPAI’s Virtual Product Responsibility Summit kicked off on Monday, beginning a week of insightful virtual sessions examining product safety and regulatory compliance in the promotional products industry from numerous angles. Summit has drawn more than 140 registered attendees, and Monday’s programming, which began at 11 am and ran through 2:30 pm CT, focused primarily on the federal agencies that have some level of oversight on the industry and its products.

Following opening remarks from PPAI Director of Advocacy and Member Engagement Anne Stone, CAE, the Summit’s first day began in earnest with a panel discussion on the “alphabet soup” of federal agencies that oversee the areas promotional products companies work in and how they interact with the industry. Cheryl A. Falvey, co-chair of Crowell & Moring's Advertising & Product Risk Management Group and the former general counsel of the Consumer Product Safety Commission (CPSC), moderated a conversation that featured Lesley Fair, a senior attorney with the Federal Trade Commission’s Bureau of Consumer Protection; Dan Solis, acting assistant commissioner for the Food and Drug Administration’s Office of Enforcement and Import Operations, and Diane Isbell, ombudsman/senior advisor at the Environmental Protection Agency’s Office of Pesticide Programs, Antimicrobials Division.

With so many members of the promotional products industry moving into new markets, such as personal protective equipment (PPE), it’s important to know who the relevant regulators are. And the jurisdiction of a product can be affected by how it’s positioned in the market, what it’s for and how it’s advertised. This is particularly important in the time of COVID-19.

“The FTC and FDA have pretty aggressive surveillance programs,” said Fair, “such as a cooperative program to identify and take enforcement action against false COVID-19 product-related claims. They’re going to look at these claims very carefully because, quite literally, they can be life or death. Companies need sound science to back up claims.”

The conversation examined several product areas that many promotional products companies have moved into this year to meet personal protective equipment needs. Hand sanitizer, for example, is regulated by the FDA, and manufacturers and private label distributors must register with the agency. Panelists advised makers of the products to be very careful about making any health claims. Masks, face shields and gloves intended for medical uses, such as by health-care personnel, or making medical claims are also regulated by the FDA. Non-medical masks have no specific performance standards to meet, but there are limits on their labelling and the performance promises manufacturers can make.

Safety-related claims, the panel noted, should be supported by competent and reliable evidence, typically in the form of controlled testing yielding results that directly relate to the performance claimed in the advertising.

The FTC’s Fair returned for Monday’s second session on marketing claims. While they shape a company’s identity and can set it apart from the competition, if a claim is not truthful, a business could be in trouble. The FTC will take action against companies making untruthful claims, she said—particularly those related to COVID-19 and greenwashing statements. In this session, participants received a seven-point checklist to help companies ensure their marketing claims stand up to the principles enforced by the FTC.

Fair explained that the FTC has three basic functions: “Educate consumers on how to protect themselves, provide guidance to businesses to streamline compliance and challenge illegal practices in court.” Her discussion during the Summit focused on unfair deceptive acts or practices. She explained that an act or practice is deceptive if it’s likely to mislead consumers acting reasonably under the circumstances, and if it would be a factor in their decision to buy or use the product. A practice is unfair if it’s likely to cause substantial injury—physical, financial or otherwise—not reasonably avoided by consumers themselves and not outweighed by benefits to consumers or competition.

The session looked at several areas—health claims, environmental claims, made in USA and social media marketing—where improper advertising can put a business in jeopardy, and included numerous examples of enforcement actions the FTC has taken in response to transgressions.

Fair further explained how to stay on the right side of the law. For example, regarding health claims, before disseminating an ad, a company must have a reasonable basis for all objective claims the ad conveys to consumers. And marketers making unqualified made in USA-related claims should, at the time of representation, have a reasonable basis for asserting that all or virtually all of the product is made in the U.S. She also cautioned the audience in regard to using social media influencers, and explained that businesses employing them have an obligation to educate and monitor them, and if they do not comply with proper guidelines, such as disclosing their business relationship with the brands they are promoting, to cut them loose.

The session also outlined several threats that have become more prevalent during the pandemic. Fair gave her audience some examples, including mail order rule violations—suppliers that take orders and money for PPE or essential materials and then don’t deliver; imposter scams—fraudsters using calls or phishing emails to steal network credentials or personal data; Paycheck Protection Program (PPP) scams—companies making false claims about PPP access or affiliation with the Small Business Administration; and financing fraud—financing providers exploiting businesses’ economic struggles.

Monday’s schedule also included a brief update on the CPSC from Acting Chairman Robert Adler, who spoke on the priorities and initiatives of this independent federal agency. The day concluded with a roundtable conversation for attendees.

To learn more about Summit and to register for the event, click here. Everything, except the roundtables, is being recorded and all sessions, PowerPoints and supporting documents will be accessible on the event platform for registered attendees for at least the next six months. Additionally, all registered attendees will have access to the 2020 Summit Compliance Manual.

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