Product Description Regulatory Frameworks & Compliance 4 — Questions and Answers
Question 1: Under the National Organic Program (NOP), a product labeled '100% Organic' in its description must:
- Contain only organically produced ingredients and processing aids, with no exceptions (Correct answer)
- Contain at least 95% organic ingredients
- Be certified by any third-party organization recognized by the USDA
- Contain at least 70% organic ingredients
Correct answer: Contain only organically produced ingredients and processing aids, with no exceptions
The '100% Organic' label requires that all ingredients, including processing aids, are certified organic under USDA's National Organic Program.
Question 2: What is 'greenwashing' in the context of product description compliance?
- Making false or misleading environmental claims to appear more eco-friendly than the product actually is (Correct answer)
- Using green-colored packaging to imply environmental benefits
- A legal method of labeling products as biodegradable
- Describing a product's carbon offset program in the description
Correct answer: Making false or misleading environmental claims to appear more eco-friendly than the product actually is
Greenwashing refers to deceptive marketing that overstates environmental benefits, which the FTC's Green Guides are designed to prevent.
Question 3: Under the FTC's Green Guides, which of the following environmental claims in a product description requires qualification?
- A general unqualified claim that a product is 'environmentally friendly' (Correct answer)
- A claim that the product packaging is made from 50% recycled content
- A statement that the product contains no CFCs
- A claim that the product is recyclable in areas where recycling facilities exist
Correct answer: A general unqualified claim that a product is 'environmentally friendly'
The Green Guides specifically warn that broad, unqualified environmental claims like 'eco-friendly' are likely to mislead consumers and must be substantiated and qualified.
Question 4: A US retailer's product description includes a price comparison stating 'Retail Value: $200, Our Price: $99.' Under FTC guidelines, this is permissible only if:
- The reference price was a genuine price at which the product was actually sold (Correct answer)
- The reference price was set by the manufacturer
- A competitor currently sells the product at the reference price
- The discount exceeds 30%
Correct answer: The reference price was a genuine price at which the product was actually sold
FTC guides on deceptive pricing require that a former price reference be a bona fide price at which the product was actually offered for a substantial period.
Question 5: Which law primarily governs the labeling requirements for food allergens in product descriptions for packaged food sold in the US?
- Food Allergen Labeling and Consumer Protection Act (FALCPA) (Correct answer)
- Nutrition Labeling and Education Act (NLEA)
- Federal Food, Drug, and Cosmetic Act (FD&C Act)
- Safe Food for Canadians Act
Correct answer: Food Allergen Labeling and Consumer Protection Act (FALCPA)
FALCPA requires that the eight major food allergens be clearly identified on packaged food labels sold in the United States.
Question 6: Under the Telephone Consumer Protection Act (TCPA), how does a product description or promotional message sent via SMS to consumers without prior consent violate the law?
- It constitutes an unauthorized commercial text message, exposing the sender to statutory damages per message (Correct answer)
- It is only a violation if the message is sent after 9 PM local time
- It violates the law only if the consumer is on the Do Not Call Registry
- SMS messages are exempt from TCPA if they contain a product description rather than a sales offer
Correct answer: It constitutes an unauthorized commercial text message, exposing the sender to statutory damages per message
TCPA requires prior express written consent before sending marketing texts; violations can result in statutory damages of $500 to $1,500 per unsolicited message.
Question 7: A product description for a financial product in the US must comply with which regulatory body's disclosure requirements?
- Consumer Financial Protection Bureau (CFPB) (Correct answer)
- Federal Trade Commission (FTC) only
- Securities and Exchange Commission (SEC) only
- No specific regulatory body governs financial product descriptions
Correct answer: Consumer Financial Protection Bureau (CFPB)
The CFPB oversees consumer financial products and services, requiring clear and accurate disclosures to prevent unfair, deceptive, or abusive acts and practices.
Product Description Regulatory Frameworks & Compliance 4
Under the National Organic Program (NOP), a product labeled '100% Organic' in its description must: