Subscribe To Our Newsletter
Subscribe To Our Newsletter
Lake Consumer Products Inc. has agreed to a $1.2 million class action settlement to resolve allegations that certain MG217 coal tar shampoo products contained elevated levels of benzene and failed to meet current Good Manufacturing Practices (cGMPs).
If you purchased MG217 coal tar shampoo products in recent years, you may be eligible to receive a cash payout or product voucher as part of a $1.2 million class action settlement. Lake Consumer Products Inc., the manufacturer of MG217, agreed to the deal to resolve allegations that its medicated shampoos contained unapproved levels of benzene, a known human carcinogen.
The lawsuit centers on claims that Lake Consumer Products Inc. failed to follow current Good Manufacturing Practices (cGMPs) and health care industry standards. According to the court documents, plaintiffs allege that certain coal tar-based shampoos sold under the MG217 brand contained elevated levels of benzene.
Benzene is a chemical compound commonly used in industrial manufacturing, but exposure to high concentrations is linked to severe health risks, including leukemia and other blood-related disorders. Consumers involved in the lawsuit state that the company failed to disclose the potential presence of benzene in its dandruff and psoriasis products, leading everyday people to unknowingly purchase products that did not meet regulatory standards.
Lake Consumer Products denies all allegations of fault or liability and maintains that its line of medicated shampoos is safe and compliant with all relevant laws. The manufacturer agreed to the $1.2 million settlement solely to avoid the costs, risks, and extended disruption of ongoing courtroom litigation.
The settlement covers all formulations of MG217 coal tar shampoo purchased in the United States or its territories for personal, family, or household use.
Specific products listed in the settlement agreement include, but are not limited to:
MG217 Psoriasis Extra Strength
MG217 Psoriasis Medicated Conditioning 3% Coal Tar Shampoo
MG217 Dandruff Therapeutic Shampoo
If you purchased any variant of these coal tar shampoos between January 1, 2021, and June 25, 2026, you fall within the defined settlement class and can take action to claim your share.
The $1.2 million settlement fund offers flexible compensation options depending on whether you retained your sales receipts or purchase records.
| Claim Option | Requirements | Estimated Payout / Benefit |
| Cash with Proof of Purchase | Receipts, order confirmations, or account order histories | Pro rata cash refund estimated to cover the full purchase price of each qualifying product |
| Cash without Proof of Purchase | No documentation required (attestation on claim form) | Pro rata cash payout of up to $7 per qualifying product |
| Product Voucher | Available to all class members | $25 voucher applicable toward future MG217 product purchases |
Class members who can provide proof of purchase have the unique option to request both a cash refund and a $25 voucher. Claimants without proof of purchase must choose between the cash option (up to $7 per product) or the $25 voucher.
Product vouchers do not expire, are fully transferable, and can be combined with other store promotions or discounts. Final payment and voucher values may adjust upward or downward depending on the total number of valid claims submitted.
Beyond providing monetary benefits to consumers, the settlement includes binding injunctive relief designed to enforce product safety. Lake Consumer Products has agreed not to manufacture, market, distribute, or sell any of the affected shampoo formulations unless the finished product contains no more than 0.5% coal tar by weight, adhering strictly to current Good Manufacturing Practices.
This structural change ensures that future runs of MG217 products undergo stricter quality oversight, providing peace of mind for consumers who rely on these therapeutic treatments for scalp conditions.
To receive a cash payout or product voucher, you must submit a valid claim form before the court-ordered deadline. You can submit your claim online via the official settlement portal or mail a physical form directly to the settlement administrator.
Key Settlement Dates to Remember:
Claim Filing Deadline: September 24, 2026
Opt-Out / Objection Deadline: September 24, 2026
Final Approval Hearing: October 15, 2026
If you wish to submit a physical claim form by mail, send your documentation to:
Lake Consumer Products Settlement
1060 Broadway, Suite 308
Albany, NY 12204
If approved, cash payments will be distributed electronically via PayPal, Venmo, Zelle, or virtual prepaid cards. You may also request a physical check sent directly to your mailing address. Payments will begin shortly after the court grants final approval and resolves any potential appeals.
When everyday people buy over-the-counter health products, they expect manufacturers to deliver safe, compliant formulas. Individual consumers rarely have the time or financial resources to sue a large corporation on their own over a $15 bottle of shampoo.
Class action litigation bridges this gap by allowing consumers to unite their claims under one collective suit. By joining together, consumers can hold corporations accountable for product safety standard violations, secure compensation for affected households, and push industries toward safer manufacturing standards.
New cases and investigations, settlement deadlines, and news straight to your inbox.
