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Friday, August 15, 2008

Airborne Coughs Up Millions to Settle Suit

The Washington Post reports that Airborne Health will add $6.5 million to funds it has already agreed to pay to settle a related class-action lawsuit. That suit, which alleged that Airborne falsely claimed its products could cure or prevent colds, was settled earlier this year for $23.5 million.  Consumers who bought Airborne products between 2001 and 2008 have until Sept. 15 to apply for a refund for as many as six purchases, the FTC said. Claims will be paid by Oct. 15, 2008, the company said in a statement.  Annys Shin writes,

AirborneOver the past decade, millions of consumers, including Oprah, have come to swear by Airborne -- fizzy orange tablets containing vitamins, herbs and minerals that its makers for years said keeps cold germs at bay.

Gena Crowe of Fairfax says she doesn't get on a plane without it. "If I feel like a sore throat is coming on," she said, "it seems to take it away."

Airborne, however, when used as directed does not prevent class-action lawsuits, charges of deceptive advertising -- or, according to the government, the common cold.

"There is no credible evidence that Airborne products . . . 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 Federal Trade Commission's Bureau of Consumer Protection, which filed a complaint against Airborne's makers.

The remedy prescribed by the FTC is for Airborne to pay consumers back for as many as six purchases, a nationwide total of as much as $30 million.

Under a settlement announced yesterday, the privately held Airborne Health, based in Bonita Springs, Fla., will add $6.5 million to funds it has already agreed to pay to settle a related class-action lawsuit. That suit, which alleged that Airborne falsely claimed its products could cure or prevent colds, was settled earlier this year for $23.5 million. Consumers who bought Airborne products between 2001 and 2008 have until Sept. 15 to apply for a refund for as many as six purchases, the FTC said. Claims will be paid by Oct. 15, 2008, the company said in a statement.

Airborne said it had already begun to change its packaging and marketing language. "It's important to note that this is a settlement over older advertising and labeling, and has nothing to do with public safety," said Airborne chief executive Elise Donahue. "We've offered a money-back guarantee for our products since 1997, and we have millions of satisfied customers. A class-action lawsuit sparked this matter. We're just one of many major consumer brands across America that are under assault by class-action lawyers."

Steven Gardner, director of litigation for the Center for Science in the Public Interest, a Washington advocacy group that was part of the class-action suit, vouched for the change but said it doesn't get Airborne off the hook.

"The fact they got away with it for years is not a reason they should not be held responsible for it," he said.

Three of the FTC's four commissioners voted to approve the deal. Commissioner Thomas Rosch dissented, saying the FTC should not have let Airborne use its existing inventory of paper cartons and display trays until Oct. 31, 2008, for fear of continuing to "perpetuate misperceptions" about the products.

The government's allegations of deceptive advertising have not hurt Airborne's standing with some local customers.

"Even if Airborne isn't doing anything for you, believing it helps," said microbiologist Stephanie Scovel-Toney, 28, of Fredericksburg.

"It may be mental, but it works for me," said Robin Roane, 46, manager of an Alexandria nonprofit. "I can't tell you the last time I had a cold."

Such responses don't surprise Gardner. "It is pretty much impossible to prove that it didn't prevent a cold if you don't get a cold," he said.

Airborne hit the market in the late 1990s with a bright yellow box and a testimonial that was hard to beat. Its creator was Victoria Knight-McDowell, a second-grade teacher near Carmel, Calif., who got tired of catching colds from her students.

She started selling in 1997, three after Congress voted to allow dietary supplement makers to claim their products have an effect on a body structure or function, such as the immune system. However, they can't claim to cure or treat illnesses without FDA approval.

The notion that a school teacher found a way to stave off germs from runny-nosed 7-year-olds proved to be advertising gold. Soon, Airborne-and-water cocktails became a favorite in-flight beverage for frequent fliers. Annual sales jumped from $21.4 million to more than $100 million in one year after Knight-McDowell appeared on "The Oprah Winfrey Show" in 2004.

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