Busting the Myths: False and Misleading Advertising Amid COVID-19

With rising concerns about the global spread of COVID-19, there is an unprecedented demand for certain health products. Governments around the world are looking for fast and alternative ways to source key products and equipment in the fight against COVID-19, including by providing emergency and interim approval pathways for the manufacture and sale of masks and personal protective equipment, diagnostic tools, hand sanitizers, ventilators and more.

Amid this “new normal”, governments are urging both businesses and consumers to be prudent and diligent in order to avoid false and misleading claims about the ability of products to prevent, treat, or cure the virus.

On March 27, Health Canada warned Canadians about the risks of buying products that make false or misleading claims to prevent, treat or cure COVID-19. Health Canada indicated that it had issued warning letters to multiple companies directing them to immediately remove certain false and misleading claims in respect of a variety of products, including masks, colloidal silver, some disinfectants, plant-based elixirs, Chaga mushrooms, and oregano oil. Canadian news outlets have also featured investigations in this area, including advertisements of N95 respiratory masks that turned out to be fake, and an acupuncturist in Winnipeg accused of selling tea he claimed prevented doctors in Wuhan from catching COVID-19.

Health Canada is coordinating with other government departments to address false and misleading product claims related to COVID-19, including the Competition Bureau, which has issued its own statement on deceptive marketing practices in relation to COVID-19. Ad Standards (the advertising industry self-regulatory body) has issued a reminder about the need to substantiate advertising claims in the midst of COVID-19.

Across the border, U.S. regulators have also issued warning letters to various retailers, alleging that they are falsely claiming that their products – such as teas, essential oils, tinctures, and colloidal silver – can treat or prevent COVID-19. Various class action lawsuits are also underway in the U.S., including a class action against a prominent retailer alleging that the retailer engaged in misleading promotion of its hand sanitizer product and a complaint against a pharmaceutical company alleging that the company made misleading claims about developing a vaccine for COVID-19.

Companies that are promoting consumer and health products are reminded that any claims they make must be legally permissible and within the terms of any relevant product authorizations. Here are some key considerations for companies who are selling or promoting products to Canadians:

• Health claims are not permitted for consumer products: Claims that a product is effective in treating, preventing or mitigating the effects or symptoms of a disease, abnormal physical state, or any of their symptoms, are not permitted for consumer products. Even claims that may seem innocuous (e.g., “this soap helps kills germs”) would be considered offside. Only therapeutic products can make such claims, and only when the product has been approved for that specific purpose.

• Obtain Health Canada authorization where necessary: Therapeutic products are those that are intended to diagnose, treat, prevent or mitigate a disease, disorder, abnormal physical state, or any of their symptoms. Many of these products are regulated as natural health products, drugs and medical devices and require product authorizations before they can be legally sold in Canada, including evidence to establish the safety, efficacy and quality of the product for its intended use. Examples include disinfectants, antiseptic skin cleansers (e.g., hand sanitizer), ventilators and test kits for COVID-19. Companies that import or sell certain products (like masks) are also required to obtain facility approvals before doing so. Health Canada has indicated that some of these requirements may be waived during the COVID-19 crisis if companies obtain special emergency or interim approval for their activities, but only where companies comply with specific application or notification requirements.

• Substantiate claims: Even if a product has been approved by Health Canada, any representation about performance, efficacy, or length of life of a product must be based on adequate and proper testing. The tests and data must be reasonably competent and reliable, reflecting accepted principles of research design and execution. Anecdotal evidence, survey data from a foreign jurisdiction, or testing that did not reflect real life experience with the product are all examples of inadequate substantiation.
  
  Not only should claims be proven, but they cannot be distorted, too broad, or over-stated. Hyperbolic terminology should not be used to exaggerate the therapeutic effect/benefit of a product or ingredient, and risk reduction or prevention claims should not exaggerate the degree of risk reduction that will result from product use or imply the risks of developing a disease will be eliminated through product use.
  
  For example, a claim that a product will “protect against COVID-19” will not be valid since there are currently no products that are authorized to treat or protect against COVID-19 in Canada. However, a claim that a mask may achieve a certain filtration efficiency when worn properly may be valid if it was appropriately substantiated.
  
  It is also important to remember that these standards and expectations apply to advertising through all forms of media, including in-store claims, broadcast, print, websites and social media.

In Canada, the legal sanctions for non-compliance with the requirements under the Competition Act and the Food and Drugs Act can be substantial and include large fines, monetary penalties and possible terms of imprisonment. Outside of the regulatory sphere, there is also the risk of product liability claims.

Given the current climate and the fact that regulators have issued advisories that they are prioritizing the enforcement of such claims, companies should act prudently to ensure that they do not inadvertently expose themselves to these risks and to regulator and public scrutiny.

For further information, please contact:

Laura Weinrib               416-863-2765
Pei Li                               416-863-4265
Hilary Zarnett               416-863-2990

or any other member of our Marketing & Advertising group.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.