California Genetic Testing Company Settles with FTC, California Attorney General for Deceptive Marketing Practices
Settlement is a reminder to all clinical laboratories that state and federal DOJs and AGs are willing to file actions against genetic testing companies that intentionally mislead the public
California’s Attorney General, in cooperation with the Federal Trade Commission (FTC), announced a recent settlement with CRI Genetics regarding deceptive trade practices. The at-home genetics testing company will have to pay $700,000 in civil penalties and according to the Santa Monica Daily Press, “will be barred from a wide range of deceptive practices to settle charges from the Federal Trade Commission and the California Attorney General that the company deceived users about the accuracy of its DNA reports.”
Santa Monica, Calif.-based CRI Genetics (CRI), which also does business as OmniPGx, offers DNA saliva-swab test kits that are analyzed by a third party laboratory to return customers ancestry data, health information, optimal nutritional guidelines, and potential allergies. The company’s website states a guaranteed 8-week turn around for the kits.
The original complaint against CRI alleged the company used misleading marketing practices by claiming its DNA tests are more accurate and detailed than their competitors, such as Ancestry DNA and 23andMe. CRI also claimed their ancestry data was more than 90% accurate and could determine ancestry dating back 50 generations.
In addition, the company stated its algorithm for matching DNA was patented, which it was not, according to the complaint.
The complaint also alleged the CRI website contained deceitful information and was formatted to appear independent but included inflated reviews and false testimonials.
“CRI Genetics could have found legitimate ways to market its services. Unfortunately, in its pursuit of growth and profits, the company repeatedly misled consumers. The FTC and my office took notice, we investigated, and we are delivering results today,” said California Attorney General Rob Bonta (above) in a press release. (Photo copyright: State of California Department of Justice.)
Alleged Deceptive Business Practices
According to court documents, CRI manipulated customers into purchasing add-on services and forced consumers to click through a myriad of pop-up pages to lure them into purchasing more products. Customers were informed they would have a chance to review their orders before being charged but were immediately billed. Consumers then had to go through a lengthy and often confusing process to obtain refunds for returned items.
“Based on the facts and violations of law alleged in this Complaint, the FTC has reason to believe that Defendant has violated or is about to violate laws enforced by the Commission because, among other things, Defendant engaged in the unlawful conduct over a period of four years, willfully and knowingly, despite having knowledge of hundreds of consumer complaints and refund requests, as well as inquiries by the Better Business Bureau regarding their deceptive practices and only ceased its unlawful activities after the FTC notified Defendant of its pending investigation,” the court filings state.
State Settles with CRI Genetics
In November 2023, California’s DOJ and the FTC announced a settlement with CRI Genetics that “resolves allegations that CRI misled consumers about the purported superiority of its genetic testing services, presented false and misleading consumer testimonials and reviews, and engaged in deceptive billing practices,” a Calif. DOJ press release states.
“Our settlement not only holds CRI Genetics accountable for its past misconduct, it also aims to ensure that CRI Genetics doesn’t engage in similar misconduct going forward,” said California Attorney General Rob Bonta in the press release. “I want to thank our federal counterparts at the FTC for their continued partnership and commitment to ensuring that all businesses play by the same rules.”
In addition to the $700,000 fine, CRI is obligated to change its practices by:
- Ceasing to make misrepresentations about its testing and analysis services.
- Not using deceptive tactics to sell its products, represent endorsements, or in billing practices.
- Accurately disclosing its website billing practices.
- Disclosing any sharing or usage of genetic data for purposes besides the services the consumer purchases.
- Refraining from offering the sale of any DNA information testing product or service.
- Complying with California law, including the California Consumer Privacy Act (CCPA) and the Genetic Information Privacy Act of 2019 (HR 2155).
“Today’s action continues the FTC’s crackdown on deceptive reviews, dark patterns, and baseless claims around algorithmic solutions,” said Samuel Levine, Director, Bureau of Consumer Protection at the FTC, in the press release. “We are proud to partner with California on this important matter and will continue to carefully scrutinize claims around biometric information technologies.”
This settlement serves as a reminder to all genetic testing firms and clinical laboratories that state and federal Departments of Justice and state Attorney Generals are willing to file actions against genetic testing organizations that intentionally mislead the public. It is also useful for lab managers to stay aware of the lengths some genetic testing companies will go to deceive consumers and that regulatory agencies are noticing egregious practices.
—JP Schlingman
Related Information:
Genetic Testing Company Fined for False Advertising
FTC and CA AG Settle with DNA Testing Firm for Allegations of Misrepresentation
