Bald claims for the success of their hair loss treatments led to a big fine for Ashley & Martin, which has branches in Auckland, Hamilton, Wellington and Christchurch. (File photo) Photo: 123RF/ Cunaplus
A company making bald claims about the effectiveness of its hair loss treatment has been fined hundreds of thousands of dollars.
The Auckland District Court heard that Ashley & Martin repeatedly claimed its treatment, costing up to $5000, had a 98 percent success rate.
But the Commerce Commission said it did not have a reasonable basis for this claim.
It said the company had provided a customer satisfaction survey of 109 customers from 2007 and clinical trial results of 10 customers from 1999.
The commission argued that combining these two results was not sufficient to scientifically prove the treatment worked.
The company was fined $367,500 for breaching the Fair Trading Act with unsubstantiated marketing claims.
Commerce Commission General Manager of Fair Trading Vanessa Horne said claims about the effectiveness of products, particularly medical treatments, were difficult for consumers to verify themselves.
She said the case against Ashley & Martin was important for reminding businesses that they must have a proper basis for the claims they make about their products.
"Consumers purchasing medical or other personal treatment products invest their trust, confidence and money to fix a specific problem.
"A claim of a 98 percent success rate could have the potential to sway consumers into making a significant health and financial decision.
"They are entitled to assume that the claims made can be backed up."
Vanessa Horne criticised the small sample sizes of both the study and the survey.
"The study may also have excluded unfavourable results, and was based, in part, on a treatment formulation that has since changed," she said.
The marketing claims were made between November 2016 and May 2021.
Ashley & Martin no longer makes the 98 percent success rate claims.