Truly Organic? The FTC says no. Miami Beach-based Truly Organic and its founder and CEO, Maxx Harley Appelman, will pay $1.76 million to settle a Federal Trade Commission complaint alleging that their bath and beauty products are neither “100% organic” nor “certified organic” by the U.S. Department of Agriculture (USDA).
Truly Organic is also greenwashing their vegan claims. According to the complaint, certain products contain non-vegan ingredients like honey and lactose. The court order resolving the FTC complaint bars the defendants from making similar deceptive advertising claims.
“To know if a product is truly organic, consumers have to rely on companies to be truthful and accurate,” said Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection. “That’s why we’ll hold companies accountable when they lie about their products being organic, especially when they’ve used fake certificates and ignored USDA warnings.”
According to the FTC’s complaint, since at least 2015, the defendants have advertised, labeled, offered for sale, and sold a range of personal care products to consumers, including haircare products, body washes, lotions, baby products, personal lubricants, and cleaning sprays. The products fall into two basic categories: 1) those that Truly Organic “makes” by buying wholesale bath and beauty products and adding ingredients designed to increase their visual appeal; and 2) “bath bombs” and soaps that they buy as finished products from online wholesalers and resell at a substantial markup.
Truly Organic sells products nationwide using its own website and social media accounts as well as third-party websites, such as ulta.com, urbanoutfitters.com, nordstrom.com, and aerie.com, and provides online retailers the marketing marketing materials used to sell Truly Organic products.
The complaint alleges that to induce customers to buy Truly Organic products, the defendants have used many statements that imply their products either are wholly organic or certified organic in compliance with the USDA’s National Organic Program (NOP). These statements include claims that Truly Organic products contain “100% Organic Ingredients,” are “certified organic,” are “USDA . . . organic,” are “100% organic,” or are “Truly Organic.”
The FTC contends, however, that many of the defendants’ products actually contain ingredients that are not organic, with the non-organic ingredients included only in lists that are buried among other text on product labels and websites. Further, some Truly Organic products incorporate non-organic ingredients that could be organically sourced, such as non-organic lemon juice. Other Truly Organic products contain non-organic ingredients that the USDA does not even allow in organic handling, such as the chemicals cocamidopropyl betaine and sodium cocosurfactant.
In addition, according to the complaint, some Truly Organic products, such as their bath bombs and soaps, contain no organic ingredients at all, as they come as finished products from wholesalers who do not offer organic products. The complaint alleges that none of the defendants’ products have been certified organic in compliance with the USDA NOP, and some products marketed as vegan contain non-vegan ingredients.
Finally, the FTC contends the defendants continued to supply marketers and internet influencers with product labels featuring the false certifications for months after resolving a 2016 USDA investigation, and, through 2018, continued to endorse and upload influencer videos to Truly Organic’s YouTube channel containing “certified organic,” “USDA organic,” and “vegan” claims. During this time, the complaint alleges that the defendants regularly bought hundreds of gallons of bath, beauty, and home products they knew did not contain 100 percent organic ingredients, added ingredients to increase their visual appeal, repackaged them, and deceptively sold them to consumers as organic.
The court order settling the FTC’s charges contains both conduct and monetary provisions. The order imposes a $1.76 million judgment against the defendants and they will be subject to standard recordkeeping, monitoring, and compliance provisions.
FTC Commissioner Rohit Chopra said in a separate statement, “I commend Commission staff for investigating fraudulent greenwashing by Truly Organic and its CEO, Maxx Harley Appelman. This conduct distorted competition for organic products, inflicting harm on honest producers. Truly Organic and Appelman also harmed consumers, some of whom may have purchased their products for health reasons. The Commission has reversed this fraud through a judgment ordering redress covering all of the tainted transactions. Today’s order also holds the responsible individual accountable.”
LESSONS TO LEARN:
