Company to Pay $175,000 Civil Penalty
Lifestyle Fascination, Inc., a New Jersey mail order company that sells a variety of products through print and online catalogs, has agreed to pay a $175,000 civil penalty to settle charges that it violated a 1994 Federal Trade Commission order. The FTC alleges that Lifestyle’s claims for four products violated order provisions prohibiting unsubstantiated claims of health benefit or effect on body structure or function, and unsubstantiated performance or efficacy claims for electronic products. This is the second civil penalty action against Lifestyle since the Commission entered the 1994 order. In 1997, Lifestyle agreed to the payment of a $60,000 civil penalty and entry of a federal court injunction to settle FTC allegations that it had violated the 1994 order by making unsubstantiated claims for a pain-relieving device, a pest- control device, and an antenna substitute.
The consent decree filed in the present action modifies the terms of the 1997 federal court injunction. Under the modified consent decree, Lifestyle’s representations that tests or studies prove the efficacy of any food, drug, dietary supplement, or medical device must be true. In addition, the tests or studies referenced in the ad must have been conducted by persons with appropriate training and experience, using procedures accepted by the relevant profession to ensure accuracy and reliability.
- Lifestyle sells a variety of products, including electronic items, gadgets, toys, household goods, cosmetics, dietary supplements, and other health-related products. The claims challenged in this action promoted the following products:
- the Beverly Hills Spa Diet, a fruit juice concentrate drink containing calcium pyruvate (a purported fat-burning ingredient). The product sells for $19.95. Fight the Fat, a liquid chitosan supplement sold in a two-ounce bottle for $39.95.
- Lifestyle instructs users to add 12-14 drops to a non-dairy cold beverage that consumers should consume before lunch and dinner. (Chitosan is a shellfish extract).
Carni Q-Gel, a dietary supplement capsule promoted to treat heart problems, which sells for $49.95 per bottle.
- Sani-Mate Plug-In Sterilizer, a small portable ozone air cleaner that sells for $39.95.
The FTC alleges that Lifestyle made numerous unsubstantiated or false claims in the marketing and advertisements for these products – all in violation of the Commission’s 1994 administrative order. Under the terms of that order, Lifestyle was prohibited from, among other things:
- misrepresenting test results for any product;
- making unsubstantiated claims that any product will have an effect on health or the structure or function of the body; and
- making unsubstantiated performance, safety, benefit, or efficacy claims for certain consumer electronic products.
According to the FTC, Lifestyle’s ads for the four products targeted in the action announced today contained claims such as:
- users of the Beverly Hills Spa Diet can lose up to 10 pounds over a weekend;
- users of Fight the Fat can lose 10 pounds a month and lower their cholesterol, without dieting or giving up high-fat foods;
- Carni Q-Gel is recommended by cardiologists to improve heart function in users with angina and other heart conditions; and
- the Sani-Mate air cleaner reduces the incidence of disease or infection in users.
The FTC alleges that these and other claims made for the products are unsubstantiated or false.
In addition, the FTC alleges that Lifestyle offered a strong and unqualified guarantee of customer satisfaction through claims such as: “Guarantee of satisfaction: If for any reason you aren’t happy with your purchase send it back for a 100% refund.” The complaint alleges that Lifestyle violated the FTC Act through its failure to honor completely its satisfaction guarantee and promise of a 100 percent refund.
The modified consent decree with Lifestyle requires the company to pay a $175,000 civil penalty. The modified decree also establishes a more stringent standard for claims that tests prove or establish the efficacy of certain products, including dietary supplements. Such claims must be true, and the tests must be conducted by persons with appropriate training and experience, using procedures accepted by the relevant profession to ensure accurate and reliable results. In addition, the modified decree requires full refunds for products returned pursuant to any satisfaction or money-back guarantee, unless the company discloses, clearly and conspicuously, that the guarantee is limited to the purchase price of the product.
The Department of Justice filed the complaint and modified consent decree at the request of the FTC in the U.S. District Court for the District of New Jersey on July 9, 2003. The modified consent decree is subject to court approval.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.
Copies of the complaint and the modified consent decree are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC Matter No. C-3513)
(Civil Action No.: not available at press time)
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