Reducing The Risk Of Consumer Class Actions

There has been an uptick in consumer fraud class actions, many of them targeting claims made by way of ingredient or content labeling, or other performance claims. A post from Sidley Austin details various forms these claims can take, and ways that companies can reduce the risk of becoming a target. It’s important to note that not all product claims are explicit or obvious, even to the company that’s making them, so step one in a prevention program is to identify all claims, implicit as well as explicit, that are made about all company products. Social media complicates the task. Social media and testimonials “may be monitored by regulatory agencies,” the authors write, “and should be monitored by you.” Also an important area of self-scrutiny: supply chains. They can be the source of problems that result in consumer fraud litigation, and indemnification provisions in supply chain contracts are recommended.