The structure of some essential oil companies makes it harder for federal agencies to contain false claims.
Despite the availability of highly potent COVID-19 vaccines, many people are looking for unproven treatments for a cure – and some essential oil distributors have claimed the coronavirus drug is in a pipette.
For years, the Federal Trade Commission (FTC) and the US Food and Drug Administration (FDA) have denied misrepresentations about the medicinal effectiveness of essential oils. However, the advent of the novel coronavirus has created increased need for protection against companies that claim their products could protect against disease.
However, meeting this need is made difficult by the contractual structures of some essential oil companies. In particular, state regulators find it difficult to monitor false health claims from distributors involved in multi-level marketing companies, an arrangement where a parent company recruits individuals to earn commissions by selling products directly to their connections.
When COVID-19 brought daily life to a standstill in the United States, many people became concerned about contracting a virus for which there were no known therapies. Some essential oil companies suggested that their products could cure COVID-19, despite not providing evidence that such oils could cure any disease.
At the start of the COVID-19 pandemic, the FDA and FTC sent warning letters to seven companies making misleading claims about teas, tinctures and essential oils. In April, the FTC sent warning letters to ten multilevel marketing companies, including essential oil companies, making unsubstantiated health claims about the effectiveness of their products in treating COVID-19. Since March, the FDA has issued at least ten warning letters to essential oil companies and the FTC has issued dozens of warning letters against companies making fraudulent health claims.
Essential oils are concentrated plant extracts that are usually packaged in small glass bottles. Their use is not inherently misleading. Medical experts have identified some productive uses for essential oils in aromatherapy. Johns Hopkins Medicine explains that the use of essential oils can help treat conditions such as anxiety, depression, and insomnia. The Mayo Clinic suggests that aromatherapy can help stimulate parts of the brain that control emotions. But it also warns that essential oils are not regulated by the FDA and that not all of them are safe.
The pandemic inspired a multitude of companies to make fraudulent health claims claiming to sell vitamins, herbs, and other therapies that allegedly fight COVID-19. In particular, many multilevel marketing companies have picked up the virus in order to make a profit. Although 99 percent of the people who join a multi-tier labeling company will lose money at some point, some companies target financial fears to attract new members.
Members are often classified as “independent dealers” selling products from larger companies. A key problem faced by multilevel marketing companies from the regulatory perspective is that the independent consultants who sell their products can make their own health claims on social media, even if the parent company’s website is devoid of such claims. So many distributors across many forms of platforms are beyond government agency oversight.
COVID-19 is the recent health crisis causing the FDA and FTC to take action against tiered marketing companies that allow independent retailers to make misleading health claims. In 2014, the FDA warned two multilevel marketing companies, Young Living and doTERRA, of false claims they and their distributors were making about the Ebola virus. Recently, some traders from the same companies have claimed that their products have been shown to be effective against coronavirus.
Not every company that makes misleading claims about essential oils and COVID-19 is a tiered marketing business. However, independent consultants selling products present a challenge to government regulators trying to bring essential oil companies into compliance with advertising and health regulations. Multi-level marketing companies allow independent distributors to make fraudulent claims about products without their parent companies having substantial oversight over them.
When the FTC or FDA warned companies about allegations appearing on their own websites, those allegations were withdrawn. For multi-level marketing companies, thousands of distributors can make claims across platforms and through private messages. These methods differ from corporate websites in that claims are decentralized, numerous, and not subject to monitoring by the FTC.
In a speech, FTC Commissioner Noah Joshua Phillips emphasized that the representations of independent dealers, not just the companies themselves, must be truthful. Phillips added that companies must both instruct their distributors not to misrepresent and monitor those distributors for misrepresentation.
As the pandemic continues and infection rates rise, opportunities for predatory and misleading health claims remain. Some companies, such as Young Living, have reportedly directed their distributors to change the language of advertising in order to comply with FDA regulations. However, with independent distributors turning to Facebook and other social media to promote products during the pandemic, it has become difficult for both these companies and government regulators to ensure that consumers are not misled by claims about antiviral snake oil.
