Makers of Airborne Settle FTC Charges of Deceptive Advertising; Agreement Brings Total Settlement Funds to $30 Million

Airborne Health, Inc., the Bonita Springs, Florida maker of the popular Airborne Effervescent Health Formula, an effervescent tablet marketed as a cold prevention and treatment remedy, has agreed to pay up to $30 million to settle Federal Trade Commission charges that it did not have adequate evidence to support its advertising claims. The FTC’s lawsuit also names Victoria Knight-McDowell, the former schoolteacher who invented Airborne, and her husband Thomas John McDowell. If the settlement is approved by the court, it will prohibit the defendants from making false and unsubstantiated cold prevention, germ-fighting, and efficacy claims. The monetary judgment will be satisfied by the defendants’ adding $6.5 million to the funds they have already agreed to pay to settle a related private class-action lawsuit, bringing the total settlement fund to $30 million.

“There is no credible evidence that Airborne products, taken as directed, will reduce the severity or duration of colds, or provide any tangible benefit for people who are exposed to germs in crowded places,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection.

The FTC complaint and agreed-upon final order follow settlement last November of the class-action lawsuit, Wilson v. Airborne, Inc. et al., which is pending in federal court in the Central District of California. In that case, the defendants have agreed to pay up to $23.51 million, which will be used for consumer refunds and attorneys’ fees. If the class action suit funds are exhausted, up to $6.5 million in additional funds for consumer redress will become available as a result of the FTC order. One redress administrator will manage both pools of funds and consumers will receive a single refund check.

The Wilson class action settlement provides refunds for purchases of Airborne-branded products (including Airborne Effervescent Health Formula, Airborne On-the-Go, Airborne Power Pixies, Airborne Nighttime, Airborne Jr., Airborne Gummis, and Airborne Seasonal Relief) made between May 1, 2001 and November 29, 2007. More information on the Wilson settlement, eligibility requirements, and procedures for filing a claim online or by mail can be found at www.airbornehealthsettlement.com. Consumers have until September 15, 2008 to apply for a refund for up to six product purchases.

The defendants have marketed Airborne Original Effervescent Formula as a dietary supplement containing 17 ingredients, including vitamins A, C, E, zinc, and selenium. Airborne products have been advertised nationally in print media and on radio and television. They have been sold by grocery stores, drug stores, and mass merchandisers.

According to the FTC’s complaint, there is no competent and reliable scientific evidence to support the claims made by the defendants that Airborne tablets can prevent or reduce the risk of colds, sickness, or infection; protect against or help fight germs; reduce the severity or duration of a cold; and protect against colds, sickness, or infection in crowded places such as airplanes, offices, or schools. The FTC complaint also states that the individual defendants in the case, company founders Victoria Knight-McDowell and Thomas John McDowell, made false claims that Airborne products are clinically proven to treat colds.

If consumer refund claims are not paid on time in the Wilson lawsuit, or if the defendants have not paid at least $23.5 million to settle any other similar class-action lawsuit by December 31, 2009, the defendants must pay the entire $30 million to the FTC, which will administer its own consumer redress program.

In addition to prohibiting the defendants from making claims that are false, misleading, or unsubstantiated by competent and reliable scientific evidence, and providing additional funds for consumer redress, the order authorizes the Commission to monitor the defendants’ compliance with the order.

The Commission vote authorizing the staff to file the complaint and agreed-upon final order was 3-1, with Commissioner J. Thomas Rosch dissenting. These documents were filed in the U.S. District Court for the Central District of California on August 13, 2008. The complaint and agreed-upon final order name the following defendants: Airborne Health, Inc., also doing business as Airborne, Inc. and Knight-McDowell Labs; Airborne Holdings, Inc.; Victoria Knight-McDowell; and Thomas John McDowell, also known as Rider McDowell. The FTC’s complaint and agreed-upon final order can be found at: http://www.ftc.gov/os/caselist/0723183/080814airbornecomplaint.pdf.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.