NAD Refers Advertising for ‘Fungi-Nail’ Products to FTC for Further Review After Company Declines to Comply with NAD Recommendations

New York, NY – Jan. 9, 2018 – The National Advertising Division has referred advertising claims made by Kramer Laboratories, Inc. to the Federal Trade Commission and Food and Drug Administration for further review after the company said it would not comply with NAD’s recommendation to change the name The Original Fungi-Nail Toe & Foot Brand product.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus.

The claims at issue were challenged before NAD by Moberg Pharma, maker of the competing Kerasal Fungal Nail Renewal product.

The key issue before NAD was whether the “Fungi-Nail Toe & Foot” product name conveyed a misleading message to consumers. The challenger argued that the name reasonably communicates the message that the product effectively treats toenail fungus. The advertiser contended that the product name does not expressly claim to cure nail fungus and asserted that the product was developed to treat fungus on the skin around the nails.

NAD, in its decision, explained that as a general rule and absent extrinsic evidence that consumers have been confused or misled, it will not require an advertiser to change the name of a product simply because a challenger suspects that it may be misleading.  A product name change can be required, NAD noted, if the product name itself conveys a message that is false or misleading.

In this case, NAD determined that the product name conveyed to consumers a clear message about product performance.

“Specifically, the terms ‘Fungi’ and ‘Nail’ expressly communicate to consumers that the product treats nail fungus,” NAD noted in its decision.

Further, NAD said, the full product name – “The Original Fungi-Nail Toe & Foot Brand” – does little to convey that the product is for athlete’s foot on the skin. Rather, NAD said, the inclusion of the word “Toe” adjacent to the words “Fungi” and “Nail” reinforces the message that Fungi-Nail Toe & Foot alleviates fungal toenail conditions.

NAD recommended the advertiser discontinue the Fungi-Nail Toe & Foot product name and the associated fungal toenail images. NAD also recommended the Fungi-Nail Toe & Foot product packaging and television commercials be discontinued or modified to clearly and conspicuously state, in proximity to the main advertising claims, that the product treats athlete’s foot, not toenail fungus. NAD recommended the advertiser discontinue all claims that the Fungi-Nail Toe & Foot product works “fast,” kills fungus “on contact,” stops “tough” infections, and is the “#1 Pharmacist Recommended” brand, as these claims were unsupported by the evidence in the record.

However, NAD found that there is a reasonable basis for the advertiser’s “stops the spread” claim.

With respect to the advertiser’s Fungi-Nail Nailner product, NAD recommended the image of the fungal toenail, as well as the claims: “Clears nails fast,” “Visible results after seven days,” “Looking to improve nail appearance fast? These cure fungus ugly nails in 48 weeks,” and “Fungus Ugly to Prettier Nails Fast!” be discontinued.

Kramer, in its advertiser’s statement, said the company “will not discontinue use of its trade name. Kramer has provided its FUNGI-NAIL TOE & FOOT brand, without interruption, for over 40 years to a very satisfied consuming public and is committed to continuing to demonstrate high standards for quality and integrity.”

The company said that it would modify the brand and packaging for its Fungi-Nail Toe and Foot brand and noted that it had discontinued advertising for and sales of the Nailner brand in early 2017.

The procedures that govern advertising industry self-regulation require that advertisers state whether they will comply with the recommendations made by NAD. Where advertisers decline to comply, the advertising claims at issue may be referred to the appropriate government agency for further review. Here, NAD has referred the advertiser’s claims to the FTC and FDA.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.