The Federal Trade Commission and state attorneys general are devoting significant resources to combat false and deceptive advertising content related to the coronavirus, including the dissemination of express or implied immunity-based claims that lack competent and reliable scientific evidence.

            From a recent press release pertaining to various coronavirus scams to joint warnings with the Food and Drug Administration, digital marketers that fail to properly examine claims and substantiation are in for a world of hurt, potentially even criminal liability. In fact, The U.S. Department of Justice has issued a number of press releases directing all U.S. Attorneys to appoint coronavirus fraud coordinators, and prioritize the investigation and prosecution of coronavirus-related schemes, including, but not limited to, individuals and businesses selling fake cures for COVID-19 online.  The DoJ has also expressed its intention to pursue individuals that purposefully expose and infect others with COVID-19 under federal terrorism-related statutes.

            Immunity supplements and express or implied COVID-19 prevention, treatment, cure or diagnosis-related representations are squarely within the crosshairs. Without limitation, a lack of competent and reliable scientific evidence with respect to the final product formulation – not just a single/handful of ingredient(s) – could prove disastrous for those hurriedly seeking to bring products to market without first ensuring that lawfully adequate substantiation is possessed prior to dissemination of claims.

             FTC attorney and Chairman Joe Simons has released a statement outlining current enforcement efforts, which include working with both federal and state law enforcement, in order to protect consumers from unfair and deceptive commercial practices. The FTC “will not tolerate businesses seeking to take advantage of consumers’ concerns and fears regarding coronavirus disease, exigent circumstances, or financial distress,” according to Simons.

           On the state side, state attorneys general are not only confronting unsubstantiated efficacy claims, but are also actively policing price gouging on disinfectant products and masks. The Michigan Attorney General recently announced that it forwarded cease and desist letters to two businesses for marketing to consumers the “Coronavirus Defender Patch,” which the companies allegedly falsely claim will help protect people from contracting the coronavirus disease. Price gouging complaints related to COVID-19 filed with the Michigan Attorney General’s office exceed 1,500.

            A bipartisan group of 32 state attorneys general have recently forwarded correspondence to large online retailers requesting their assistance with price gouging.

            The New York Attorney General has sent letters to domain registrars requesting that GoDaddy, Namecheap, HostGator and others stop and de-list domain names used for coronavirus-related scams and bogus remedies.

             “In this time of uncertainty, it’s more important than ever that we remain cautious when it comes to companies and individuals selling coronavirus-related products and services over the internet,” said New York Attorney General James. “These scam sites are not only stoking fear in the hearts and minds of Americans, but are profiting off their appalling deception. We need all consumers to remain vigilant, as my office continues to work diligently to take down these websites and ensure scammers, cons, and cheats are held responsible for their unlawful actions.”

             The NY OAG has also sent a letter to Craigslist.com, calling on the company to immediately remove posts that attempt to price gouge users, or otherwise purport to sell items that provide “immunity” to the coronavirus or allow individuals to test for the disease.

             Multiple business in New York have recently received cease and desist notifications from the NY OAG for allegedly charging excessive prices for hand sanitizers, disinfectant sprays and rubbing alcohol. New York’s price gouging statute prohibits the sale of goods and services necessary for the health, safety, and welfare of consumers at unconscionably excessive prices during any abnormal disruption of the market.

             The FTC, the U.S. DoJ and state attorneys general will continue to surveil and monitor businesses across the country for potential scams and price gouging schemes designed to exploit public concern related to the spread of the coronavirus. Advertising claims touting such benefits that are not supported by competent and reliable scientific evidence, including implied immunity-based claims related thereto, are a very dangerous proposition.

            Consult with an experienced FTC defense attorney prior to disseminating health claims. In addition to potentially violating federal and state advertising law, those making unsubstantiated health claims could be deemed to be a “public threat.”             

             The DoJ has already filed four federal criminal actions to combat fraud and other offenses related to the coronavirus pandemic. 

             The first in Los Angeles, California involving allegations that an individual solicited investments in a company he claimed would be used to market pills that would prevent coronavirus infections, as well as market an injectable cure for those who had already contracted the virus.  The individual is charged with wire fraud.

             The second in Newark, New Jersey involving allegations that an individual conspired to receive kickbacks and commit health care fraud by agreeing to refer patients for COVID-19 testing in exchange for payment as long as that testing was also bundled with more expensive Respiratory Pathogen Panel Testing.  The individual is charged with violating the federal Anti-Kickback Statute and conspiracy to commit health care fraud.

             The third also in Newark, New Jersey involving allegations of assault resulting from an individual who represented to have tested positive for COVID-19 coughed on FBI agents and lied to them about his accumulation and sale of surgical masks, medical gowns and other medical supplies.  The individual allegedly sold certain designated materials to doctors and nurses at inflated prices.

             The fourth in Los Angeles California involving allegations that an individual mislabeled drugs that were purported to be a treatment for COVID-19 into the U.S. According to DoJ, the individual claimed to have created a “miracle cure” not approved by the FDA.            

             The mandate from all levels of regulatory agencies are quite broad.  It is all too simple to inadvertently cross the line when making immunity-based product efficacy representations.  The stakes at present for missteps are higher than ever.

Richard B. Newman is an FTC defense attorney at Hinch Newman LLP. You can find him on Twitter @FTC defense attorney.

Informational purposes only. Not legal advice. May be considered advertising material.

The Coronavirus outbreak has raised a number of issues relating to contractual performance obligations. An excuse for non-performance of contractual obligations may potentially exist in the form of a “force majeure,” or “Act of G-d”) provision.

Typically, force majeure provisions excuse non-performance for events such as natural disasters and war. While some force majeure clauses specifically include epidemics and pandemics, others do not. Depending upon the breadth of the clause at issue and the jurisdiction that governs the applicable contract, Coronavirus may qualify as a force majeure event.

As a general rule, a force majeure provision excuses contractual non-performance if the non-performance is caused by unforeseen events beyond the control of each party, and performance is rendered commercially impracticable or unreasonable. Additionally, a causal relationship must exist between the force majeure event and the impacted party’s failure to perform. Reasonable efforts to mitigate the impact of the force majeure event may also be required.

If there is no force majeure provision in your contract, non-performance could still potentially be excused. For example, if the primary purpose of the contract has been frustrated or rendered unfeasible.

Timely notice of the invocation of a force majeure provision may be required. In the event that a force majeure contractual provision does apply, the impacted party may potentially be excused from its performance obligations during the continuation of the force majeure event. Termination of the contract is also a potential option depending upon a number of factors, including, but not limited to, the period of time that the force majeure event continues.

Takeaway: Given these unprecedented circumstances, discussing the invocation of contractual non-performance related considerations with marketing partners may become necessary. Marketers should assess underlying marketing contracts with experienced counsel to determine whether a force majeure provision or other excuse to non-performance exists. The scope of any such provision should be assessed, as should mitigation, notice, termination and choice of law requirements.

Richard B. Newman is a digital advertising practices lawyer and FTC attorney at Hinch Newman LLP. Follow him on Twitter @FTC lawyer.

Informational purposes only. Not legal advice. May be considered attorney advertising.

New research by Trustwave reveals that 26 per cent of spam is infected with malware. As a result spam filters are getting increasingly strict meaning that the potential for legitimate marketing emails not reaching the intended inbox is getting higher. Currently it is estimated that close to half (43.5 per cent) of email traffic is sent to spam and this is problematic for brands wanting to communicate with their customers, particular since research shows that over two thirds of people NEVER check their spam files!

Consequently, email hygiene is becoming more important as a way for marketers to improve their chances of not only making it into the coveted inbox, but of having their emails opened, read and acted upon – thus improving bounce rates, open rates click-throughs and ultimately conversion rates.

By cleaning your email data your sender reputation is enhanced and the potential of being marked as spam is decreased.

There are two ways that mail can be marked as spam. The first is that an individual recipient can manually flag your email as spam, or an email provider can classify your email as spam and send it straight to the spam folder.

If an email provider receives a spam complaint from a recipient all your future emails will automatically be sent to the spam folder. If they receive multiple complaints from recipients your email address will likely be blacklisted.

An email provider might classify your email as spam for a number of reasons, but it is ultimately tied to your reputation.

The most damaging are ‘hard bounces’. These are the number of emails that are undelivered because the domain name doesn’t exist or because the address itself is not recognized. The days of being able to blast out thousands of emails and hope for the best are long gone. Doing this will ultimately result in a high hard bounce rate, impacting your reputation and potentially meaning that future campaigns are put in jeopardy.

To avoid hard bounces marketers should validate email data in real time at the point of entry, remove all invalid or inactive email addresses and screen existing email data for errors; supressing all of those that cannot be corrected. Our award winning email solutions means that all of this can be achieved quickly and cost effectively. We don’t just check the format of the address i.e. making sure that there is an @ sign and letters either side, we check that the address is live and genuine and that an email can be delivered.

Email hygiene is no longer viewed as a nice to have, but a must have. However, one of the most frequently asked questions we receive concerns the frequency of cleansing. The DMA and best practice recommends that email data should be refreshed on a monthly basis, or at the least on a campaign by campaign basis.

However, sure-fire indicators that your email data needs cleansing are:
1. Email open rates are dropping
2. Click-throughs are low or dropping
3. Bounce rates are increasing
4. Unsubscribe requests are increasing
5. Spam complaints are rising

During a crisis, your email communication can make or break your business. Even more importantly, it can help, hurt, or confuse people. 

You can’t just ignore a crisis when it’s affecting your audience. With the outbreak of the 2020 Novel Coronavirus, email communication about the virus skyrocketed.

In fact, 12% of emails sent on March 12, 2020 from AWeber’s email marketing platform talked about Coronavirus and communication about the crisis doubled.

Here is an 8-step checklist to guide you through creating sensitive, thoughtful emails during the Coronavirus crisis.

8-step guide to write emails about the Coronavirus crisis

Step 1: Act quickly.

Your audience expects to hear from you. Don’t wait to communicate important information.

Waiting too long can negatively affect your brand reputation and also confuse or stress your audience. They may assume you don’t care or that you aren’t taking the situation seriously.

Step 2: Be compassionate and considerate.

Take time to think about how the crisis is having a direct impact on your community, customers, and followers.

Pause insensitive marketing campaigns — like contests or humorous content — and unnecessary events — like in-person workshops or conferences.

Step 3: Describe the actions you’re taking to deal with the situation.

Your customers, prospects, and community want to know what you’re doing to support the health, safety, and well-being of the community.

Ask yourself the following questions and consider addressing these questions in your email marketing communication:

• How are you cleaning your workplace or building differently?
• How are you protecting your customers and your staff?
• Have your hours of operation changed?
• Will your customers’ service be disrupted? Will product deliveries be delayed?
• How can customers contact you with questions?
• Where can customers get the latest information about how you’re handling the crisis?

Step 4: Try to help.

Businesses that take action to help those affected by the crisis will connect with their audience on a deeper level. People want to do business with brands who genuinely care.

Consider taking the following steps to help your audience during the crisis:

• Set up a relief fund for those affected by the crisis.
• Create educational content that will help your audience navigate or understand the crisis.
• Discount your product or service or give it away for free.
• Use your product or service to help people suffering from the crisis.

Step 5: Don’t joke about the situation. Take it seriously.

You could come across as insensitive and unaware of the impact the crisis has on the world and your direct customer base.

Use a serious tone in your emails — even if this isn’t your typical brand voice.

Step 6: Don’t take advantage of the situation.

If your product or service is in high demand due to the crisis, don’t raise your prices. While this is a smart practice in normal times due to the law of supply and demand, it’s insensitive and unethical during times of crisis.

Step 7: Monitor the crisis and adjust communications appropriately.

Communicate regularly with your audience throughout the crisis. Don’t be afraid to change how you’re addressing or handling the crisis and update your audience with new information.

Step 8: Show your audience you care.

Your audience may be stressed, upset, or in danger during this crisis. Make sure they know you care about they’re well-being, health, family, and friends.

If you own a physical store or run an event, explain how you will keep them safe during the crisis.

4 examples of Coronavirus crisis communication emails

Need specific examples? Here are a few emails that sensitively and effectively communicated during the Coronavirus.

Example 1: Teachable

In this email, course creation platform Teachable explains how they’re preparing for the Coronavirus and how customers will be impacted.

They also offer their platform for free to government and healthcare organizations helping fight the Coronavirus and to educational institutions affected by the Coronavirus.

Example 2: Basepaws

Basepaws, a company which provides at home DNA tests for cats, sent a sensitive and effective email addressing the Coronavirus.

Here are a few things that made this email effective:

• They use a serious tone.
• They explain that they care about those affected.
• They provide educational resources to help people understand Coronavirus and protect their pets during the crisis.
• They describe how they’re dealing with the situation.

Example 3: Traffic and Conversion Summit

In this email, the Traffic and Conversion Summit conference communicates their decision to postpone their conference due to Coronavirus. They also share a social hashtag which their audience can follow to get the latest updates.

Example 4: Tröegs

In this email, Tröegs brewery explains how they have initiated safety precautions at their brewery to protect staff and employees.

The Federal Trade Commission and Federal Drug Administration took action by sending warning letters to several companies for allegedly selling products using deceptive or unsupported scientific claims about the products’ ability to treat the SARS strand of COVID-19 known as coronavirus.

Last week, warning letters were sent to companies advertising products such as teas, essential oils, herbs and colloidal silver. Colloidal Vitality, Quinessence Aromatherapy, N-ergetics, GuruNanda, Vivify Holistic Clinic, Herbal Amy, and The Jim Bakker Show are among those companies, according to Lewis Rice law firm in St. Louis.

Perhaps the most hillarious part? Two federal agencies have issued an official warning to televangelist Jim Bakker after he was caught selling products that claim to cure coronavirus. The Jim Bakker Show was among seven companies singled out by the Food and Drug Administration (FDA) and the Federal Trade Commission for selling a phony potion, “Silver Solution,” which they claim can “eliminate” the COVID-19 virus.

In an official statement, the FDA noted that it had reviewed the Jim Bakker Show website and found it was in breach of federal rules on the sale of unapproved products. “The FDA has determined that your website offers products labeled to contain silver, such as “Silver Sol Liquid,” for sale in the United States and that these products are intended to mitigate, prevent, treat, diagnose, or cure COVID-19 in people.”

Under the FTC Act, 15 U.S.C. 41 et seq., it’s illegal to market a product as one that can prevent, treat, or cure human disease without reliable scientific evidence. The letters demand recipients to cease making claims that their products can treat or cure coronavirus.

The FTC can pursue a variety of civil and criminal remedies, Carey explains. In terms of criminal remedies, any person or company that violates Section 52(a) of the FTC Act, the dissemination of false advertisements, may be guilty of a misdemeanor, and on conviction shall be punished by a fine of not more than $5,000 or by imprisonment for not more than six months, or both.

The federal action comes a week after New York’s Attorney General Letitia James issued a cease-and-desist letter to Bakker regarding the sale of the substance.
Bakker, 80, has yet to comment on the controversy.