The federal Food and Drug Administration regulates more than just food and drugs. The agency also oversees cosmetics -- not just makeup, but just about every body product.

The FDA recently put the cosmetics industry on notice, saying its cracking down after a report raised questions about the safety of thousands of products.

The agency can't preapprove cosmetics, force recalls or require companies to disclose what's in their products.

It can inspect manufacturing plants, but it can't mandate changes without going to court. It can require warning labels, but not safety testing, which is left up to each company.

RELATED LINKS Cosmetic, Toiletry, and Fragrance Association Environmental Working Group Food And Drug Administration

The Environmental Working Group (EWG) recently said it reviewed 7,500 products. They claim that 99 percent of them contain at least one ingredient that hasn't been tested, and a third contain "known or possible carcinogens."

"The FDA has never defined what 'safe' means. Does it mean it doesn't cause cancer? Or, just doesn't make your skin itch?" said Tim Kropp, the senior scientist for EWG.

"People shouldn't throw out their handbags full of cosmetics from their medicine cabinet, but they should be aware that most of these chemicals haven't been tested for safety," Kropp added.

In response, the FDA sent a letter to the cosmetic industry, saying its cracking down on warning labels. The industry's own expert panel reviews cosmetic ingredients and claimed that the EWG's report is flawed.

"They have name fragments, misspellings, all manner of things suggesting scholarship of report was less than what you'd like before something is used, basically, to scare the public," said Gerald McEwen, the vice president of science of The Cosmetic, Toiletry, and Fragrance Association.

The industry said safety isn't just the law, it's good business.

"If you start harming people, how many resales are you gonna have?" McEwen said.

The FDA, which declined a NBC News interview request, logged 144 complaints about cosmetics in 2003. The industry argues if products were unsafe, there'd be many more complaints.