Volkswagen, Red Bull and Wal-Mart have also been in similar situations
Updated: July 3, 2017
Some customers thought it was the not the most honest company.
The Honest Co., the lifestyle consumer goods firm founded by Jessica Alba, has agreed to create a settlement fund of $7.35 million to compensate plaintiffs of a federal lawsuit alleging that the company mislabeled products as “all natural.” This comes less than a month after Alba’s firm agreed to a separate $1.6 million deal in California to end claims Honest Co. made products with sodium lauryl sulfate, a chemical agent, even though it claimed otherwise.
According to Women’s Wear Daily, members of the most recently settled New York class action lawsuit will receive $2.50 in cash or credit for each Honest Co. product they bought that was marketed with tag lines such as “no harsh chemicals, ever!” Honest Co. has also agreed to stop labeling its products—which range from baby wash to sunscreen— as “natural” if they contain chemicals like cocamidopropylamine oxide, often used in hair conditioner. Though it signed off on the settlement, Honest Co. denies that it violated the law and claims it has no liability.
The California class action was sparked by a Wall Street Journal exposé that Honest Co. used sodium coco-sulfate, which scientists say contains SLS. Honest Co., which has built a billion dollar reputation as a creator of organic and healthy products, said that SCS was a “gentler” and called the Journal’s story inaccurate (both the Journal and Moneyish are published by Dow Jones & Co.) Now, the startup will reportedly stop marketing its products as SLS free.
Also read: Jessica Alba’s Honest Co. names new CEO
Of course, Alba’s firm is hardly the first company to be dogged by claims of false advertising. Here are five others.
- German car maker Volkswagen was sued by the Federal Trade Commission last year for running a marketing campaign that touted its vehicles as “Clean Diesel.” It previously emerged that Volkswagen had installed “defeat devices” in its cars that cheated on emission tests. Its U.S. subsidiary agreed to a $10 billion settlement.
- Caffeinated beverage maker Red Bull agreed to shell out more than $13 million to end a lawsuit accusing its decades-old “Give You Wings” slogan of being false. Some customers claimed they neither attained higher cognitive abilities, nor sprouted wings. The Austrian company said it stood by its marketing claims but settled to avoid the distraction of litigation.
- About five years ago, runners sued New Balance over “toning shoes” that it touted as able to better activate lower body muscles. The shoemaker said that wearers would burn just under 10% more calories than those who used regular sneakers, a claim that some scientists dispute. The Boston-headquartered athletic label paid $2.3 million to settle.
- Wal-Mart in 2014 paid $66,000 for misrepresenting prices of Coca-Cola in New York state. It had run a promotion advertising the sale of 12-packs of Coke for $3, but customers wound up paying $3.50 at the cashier. New York Attorney General Eric Schneiderman said that tills were programmed to overcharge; when some customers asked about the discrepancy, they were told it was due to a non-existent “sugar tax.”
- Herbal supplement maker ExtenZe purported its “maximum strength, male enhancement” product would increase penis size, though there is no scientific evidence to back that claim. In 2010, it paid out $6 million to end a class action lawsuit and provided boilerplate clarifying that is products had not been tested by the Food and Drug Administration.
This story was updated on July 3, 2017 with news of Honest Co.’s New York settlement.
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