NAD Refers Advertising Claims by Capillus, Inc. to FTC and FDA for Further Review After Company Fails to Comply NAD’s Recommendations to Discontinue Claims

New York, NY – Dec. 5, 2018  – The National Advertising Division has referred Capillus Inc. to the Federal Trade Commission for possible enforcement action after the company failed to comply with NAD’s recommendations to discontinue certain claims for its laser device, including “clinically proven” and “physician recommended” claims.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

As part of its routine monitoring program, NAD requested that Capillus provide substantiation for various advertising claims for the Capillus 82, a low-level laser therapy medical device.  The claims included:

• “Clinically proven to regrow hair.”
• “The physician-recommended cap that’s clinically proven to regrow hair.”
• “…the Capillus 82 … has no known adverse side-effects ….”
• “physician recommended”
• Capillus caps are the “preferred choice of doctors worldwide.”

NAD noted in its decision that the advertiser did not conduct any clinical studies on Capillus 82, but referred instead to studies conducted on different devices which demonstrated the efficacy of those devices in regrowing hair in subjects with androgenetic alopecia, or male- and female-pattern baldness. While the Food and Drug Administration found that the Capillus 82 is substantially equivalent to other devices cleared by the FDA to promote hair, NAD noted that the cited studies were not on the Capillus 82 and, thus, not a good fit to support the challenged claims that Capillus 82 is clinically proven to regrow hair or prevent the progression of hair loss. Therefore, NAD recommended that the advertiser discontinue the claims that Capillus 82 is “clinically proven to regrow hair.”

In support of its “physician recommended” claim, Capillus relied on testimonials from five hair restoration experts.  NAD noted that three out of the five testimonials addressed the Capillus 272, a predecessor laser therapy product, and two referred to the general benefits of laser therapy in treating thinning hair. As a result, NAD concluded that these physician testimonials were not sufficiently reliable to support a doctor recommended claim. In the absence of reliable survey evidence demonstrating that physicians recommend Capillus 82 as part of their practice, NAD recommended that Capillus discontinue its claim “[t]he physician-recommended cap that’s clinically proven to regrow hair” and its “preferred choice of doctors worldwide” claim.

As for the claim that the Capillus 82 has no known adverse side-effects, NAD noted that such claims typically require a study on the actual product—evidence that was lacking here. NAD further determined that the absence of any adverse events being reported to the FDA is not sufficient to support the claim and recommended the claim be discontinued. However, NAD said nothing in the decision prevents the advertiser from claiming that no adverse events have been reported to the FDA in connection with Capillus 82.

In Capillus, Inc.’s initial advertiser’s statement it agreed to comply with NAD’s recommendations and to implement the recommended changes immediately.  Thereafter, NAD observed that the advertiser made certain changes to its advertisements but recommended that further modifications be made to bring its claims into compliance with NAD’s findings and recommendations.

For example, although the advertiser changed its “Clinically proven to regrow hair” to “Clinically Proven Technology,” “clinically proven treatment” and “scientifically proven” claims, NAD determined that consumers viewing the revised claim current advertising would reasonably take away the same or similar message as they would from the original “clinically proven to regrow hair” claim which the advertiser agreed to discontinue in the underlying matter. As in the underlying case, the absence of reliable and well-controlled clinical testing on the advertised product precludes any “clinically proven” claims. Therefore, NAD again recommended that the advertiser discontinue such claims.

As for the advertiser’s “physician recommended” claim and its claim that Capillus caps are the “preferred choice of doctors worldwide,” NAD acknowledged that the advertiser revised these claims to read, “the preferred choice of doctors worldwide within the Capillus physician network**” (which leads to the following disclosure: **“Many physicians within our network of physicians around the world indicate better patient compliance with Capillus laser caps compared to other devices”). Aside from the fact that the disclosure is neither clear nor conspicuous or in close proximity to the claim it is qualifying, NAD noted that the claim still expressly claims that that physicians “prefer” Capillus laser therapy caps over similar products without a well-conducted physician survey (i.e., of the doctors in the Capillus network).  Absent such supporting evidence, NAD recommended that the claim “preferred choice of doctors worldwide within the Capillus physician network” be discontinued.

As concerns the continued claim that the advertiser’s caps have “have no known adverse side effects”  NAD had recommended that the claim “No known adverse side-effects so you can use it with confidence” be discontinued but that Capillus could claim that no adverse events have been reported to the FDA in connection with Capillus 82.  NAD reiterated this finding and recommended that the advertiser modify the “no known adverse side effects” and “no known side effects” references to more clearly state that no adverse events have been reported to the FDA in connection with the caps if that is still the case.

The advertiser disagreed that further modification was necessary and refused to make any additional changes to its advertising. Consequently, NAD referred the matter to The Federal trade Commission and The Food and Drug Administration for possible enforcement action.