Miami Beach-based retailer Truly Organic Inc. (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 nationally marketed bath and beauty products are neither "100% organic" nor "certified

organic" by the U.S. Department of Agriculture (USDA).

Truly Organic also advertises their products as vegan, even though certain products contain nonvegan ingredients like honey and lactose, according to the complaint. 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. The

company also sells through third-party websites, such asulta.com,urbanoutfitters.com,

nordstrom.com, andaerie.com, and provides third parties with marketing materials used to market

and 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 nonorganic 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 cocamindopropyl 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. First,

the order prohibits Truly Organic and Appelman from making deceptive claims, including false

and/or unsubstantiated claims, that any good or service: 1) is wholly or partially organic; 2)

contains or uses organic ingredients; 3) is certified organic; 4) is vegan; or 5) has been evaluated

by any third party, including one affiliated with the USDA NOP, based on its environmental or

health benefits or attributes.

Second, the order bars the defendants from making any representation about the environmental or

health benefits of any good or service, unless it is non-misleading, true at the time it is made, and

is supported by competent and reliable scientific evidence.

Third, the order prohibits the defendants, in connection with the sale of any good or service, from

providing anyone else with the means and instrumentalities that would enable them to make any

representation prohibited by the order. Finally, the order imposes a $1.76 million judgment against

the defendants. They also will be subject to standard recordkeeping, monitoring, and compliance

provisions. The Commission vote approving the filing of the complaint and proposed stipulated

final order was 5-0, with Commissioner Rohit Chopra issuing a separate statement. The FTC filed

the proposed order in the U.S. District Court for the Southern District of Florida, and it has now

been entered by the court.

question

3 benefits of each of the marketing channel used by Truly organic