The provision of a guarantee should not be an excuse for product manufacturers and marketers to make misleading claims.
"[A]llowing a seller to rely on a refund policy as a defense "would make the false advertising prohibitions of the [FTC] Act a nullity. Anything might then be advertised as long as unsatisfied customers were returned their money." FTC v. Pantron J Corp., 33 F.3d 1088, 1103 (9th Cir. 1994) (citing Montgomery Ward & Co. v. FTC, 379 F.2d 666 (7th Cir. 1967)); see also Thompson Medical Co., 104 F.T.C at 834 n.81 ("Thompson also argues that its money-back guarantee evidences its good faith reliance on the evidence that Asperereme is effective. However, a money-back guarantee is not a defense to a charge of deceptive advertising.")"
Source — Matter of Basic Research L.L.C., A.G. Waterhouse L.L.C., Klein-Becker USA L.L.C., Sovage Dermalogic Laboratories L.L.C., BAN L.L.C., Dennis Gay, Daniel B. Mowrey and Mitchell K. Friedlander (The Respondents); Compaint Counsel's Motion for Partial Summary Decision, Docket #9318 (Public Document) submitted by members of the Division of Enforcement, Bureau of Consumer Protection, US Federal Trade Commission (the Complaint Counsel) February 7, 2005 relating to a variety of products made and advertised by Strivectin's makers Basic Research L.L.C., and associated companies and individuals. Download PDF (0.5 mb).