Businesses claiming their products can prevent or treat COVID-19 are one of the most common scams spotted by the Federal Trade Commission in the wake of the pandemic, agency chair Joseph Simons said Monday.
The FTC has sent more than 135 warning letters to marketers making unsubstantiated claims that their products can treat or prevent COVID-19, Simons said during a forum convened by the House Committee on Energy & Commerce's subcommittee on consumer protection and commerce.
"Almost all of those folks have removed their problematic claims," Simons said, noting businesses are required to stop making claims that aren't supported by scientific evidence within 48 hours of receiving a warning.
The FTC last month announced a preliminary injunction with Whole Leaf Organics, a California business claiming its Vitamin C and herbal extracts supplement could treat, prevent or reduce the risk of COVID-19. Under the preliminary order, Whole Leaf Organics is barred from making such claims in the future.
That was the FTC's first case seeking a federal court injunction against a business that failed to remove unsubstantiated claims that its products can treat COVID-19.
In addition to advertising fake cures, the other two most common coronavirus-related scams Simons said the FTC has seen involve robocalls and text messages providing false information about financial support from the government and multilevel marketing organizations targeting those laid off during the pandemic with "get rich quick schemes."
A concern raised by multiple representatives related to Apple and Google's contact tracing project, which the tech giants have promoted as a way to alert people that they may have come into contact with someone diagnosed with COVID-19.
Simons said the FTC is "monitoring developments in this area very, very closely," in part because one of the project's collaborators—Google—last year entered into an order with the agency and paid a record $170 million fine to settle allegations that its subsidiary, YouTube, had illegally collected data from children without their parents' consent.
"We want to make sure that we stay closely involved," Simons said. "We want to make sure that they're doing the right things and paying close attention to privacy concerns."
Lawmakers at the forum didn't specifically ask about privacy and security of health data.
The FTC on Friday announced plans to review its health breach notification rule, including whether the rule should be modified to address COVID-19. The rule, issued in 2009, requires companies that handle health data—but aren't covered by HIPAA—to notify consumers after a data breach.
