Federal Trade Commission scores two victories in separate lawsuits against companies that failed to provide COVID personal protective equipment during early days of pandemic

The Federal Trade Commission has won victories in two lawsuits against companies that failed to deliver orders for personal protective equipment at the start of the COVID-19 pandemic. In separate actions against QYK Brands (doing business as Glowyy and through related companies) and American Screening, LLC, the Commission alleged that the two companies misled consumers about the availability of personal protective equipment at the start of the COVID-19 pandemic. Commission staff won both actions on summary judgment, holding those companies accountable for their misconduct at the start of the pandemic and putting more than $17.6 million back in the pockets of consumers.

California-based Glowyy and Louisiana-based American Screening marketed and sold personal protective equipment early in the COVID-19 pandemic, including masks, face shields, hand sanitizer and gowns. American Screening marketed its products in bulk and, in addition to advertising to individual consumers, targeted local governments, hospitals and nursing homes for sales, while the Glowyy defendants marketed their products to individual consumers. . Both companies made false promises about PPE availability, which left consumers waiting weeks or even months for their orders to be fulfilled, if at all. Additionally, the Glowyy defendants misled consumers by marketing a supposed protein powder that they claimed could prevent COVID-19.

In its order granting summary judgment in favor of the Commission in Glowyy, the court found that the Glowyy defendants began advertising hand sanitizers and other personal protective equipment products online. (EPI) in March 2020, saying they were in stock and would ship the same day. were ordered, but the defendants repeatedly failed to keep those promises. The court also found that the defendants not only failed to ship the product for weeks or months, but failed to offer refunds to consumers or allow them to consent to the delay as required by the mail order rule.

In the American Screening case, the court’s summary judgment order found that at the start of the COVID-19 pandemic, American Screening’s website claimed items would be shipped “within 24 to 48 hours” and that the products were “in stock” and available for shipment. However, American Screening lacked a reasonable basis for its shipping claims, failed to ship many orders within the promised time frame, and failed to follow the mail-order rule requirements for delayed shipments.

Since the early days of the pandemic, the FTC has acted to protect consumers from unscrupulous actors who have sought to use the pandemic as a tool to rip off consumers, governments, and businesses. The FTC filed suit against defendants Glowyy and American Screening in federal court in August 2020 using its authority under the FTC Act and the Mail, Internet, and Telephone Orders Rule. In recent cases, the Commission has used its authority under the COVID-19 Consumer Protection Act, passed in 2021, to target scammers preying on fears of a pandemic.

Enforcement measures

In Glowyy, the court has already issued a permanent injunction following the Commission’s summary judgment victory. The injunction compels Glowyy to:

  • Stop selling products that claim to treat COVID-19. The order prohibits the Glowyy defendants from selling or marketing any goods or services that claim to prevent, treat, or protect against COVID-19 or any other infection or disease.
  • Stop misleading consumers about the timing of product deliveries. The order requires the company to ship the products in a timely manner, offer a refund if they are unable to do so, among other things. The company must create and maintain records demonstrating its compliance with these requirements
  • Stop making unsubstantiated health claims. The order prohibits Glowyy from making unsubstantiated health claims about any dietary supplement, food or drug.
  • Offer refunds to consumers. Glowyy is to hand over $3.08 million to the FTC to use to provide refunds to consumers.

In American Screening, the court agreed with the Commission that a monetary award of more than $14 million and an injunction were appropriate in this case. Commission staff will submit a proposed order finalizing this relief in the coming weeks.

The FTC case against QYK Brands, doing business as Glowyy; Dr. J’s Natural, LLC; EASII, Inc., Theo Pharmaceuticals, Inc., Rakesh Tammabattula; and Jacqueline Thao Nguyen was filed in U.S. District Court for the Central District of California, and her case against American Screening, LLC, Ron Kilgarlin Jr. and Shawn Kilgarlin was filed in U.S. District Court for the Eastern District of Missouri.

Aurora J. William