InVisions, Inc., and company president Stephen C. Fox, have agreed to settle Federal Trade Commission charges that the Mount Laurel, New Jersey-based company was selling nothing but toupees when advertising its painless, non-surgical, "procedure," or "process" as a maintenance-free, permanent solution to hair loss. The FTC alleged also that the company misrepresented consumer endorsements used in infomercials advertising its services, and misrepresented its refund policy. The proposed settlement would prohibit the defendants from misrepresenting that the InVisions Process is not a hairpiece, wig, or toupee, and from misrepresenting any endorsements or testimonials, or its refund policies.
According to the FTC, the defendants marketed and sold their services through at least 15 branch offices and franchises throughout the United States and Canada, and provided these various offices with advertising, promotional and training materials, and other services. The defendants disseminated print and broadcast advertisements, including infomercials, that according to the FTC's complaint detailing the allegations in this case, falsely represented that the InVisions hairpiece was not a hairpiece, but a unique procedure or process. The ads represented that the procedure involved adding strands of human hair to the customer's head without surgery and that the procedure was gradual and maintenance free. Consumers were then instructed to call a 1-800 number to receive a brochure regarding InVisions' services, and once they did, consumers were contacted by InVisions' telemarketers in an attempt to schedule a consultation. In their sales presentations, according to the complaint, salespersons were specifically instructed by the defendants to tell consumers that the "process" is "definitely not" a hairpiece, and were instructed to avoid use of the terms "hairpiece," "wig," or "toupee," when speaking with customers.
According to the complaint, many consumers first learn that the InVisions process was actually a hairpiece after payment was made and the hairpiece was fitted to the consumer's head. Consumers who complained that they were misled by the defendants or their salespeople, were urged to try the hairpiece for an adjustment period. Consumers were told that, if still dissatisfied after that time, they could return the process to the defendants and that a refund of 50 percent of the purchase price would be made. In fact, according to the complaint, consumers who relied on these representations and returned the hairpiece within the adjustment period did not receive refunds in many cases.
Further, the complaint alleges that testimonials and endorsements appearing in the infomercial represented the typical or ordinary experience of consumers who had used the product, when, according to the complaint, such was not the case. The complaint also alleges that the defendants failed to disclose that endorsers may have had a financial interest in promoting the sale of the InVisions process.
In addition, according to the complaint, the defendants have provided services and materials to assist their affiliated sellers "with marketing the InVisions" process, including accounting and management services, customer services, order processing services, as well as the advertising and promotional materials previously mentioned. Through such assistance, the complaint charges, the defendants provided the means and instrumentalities to their affiliated sellers to further the alleged misrepresentations.
The proposed consent order to settle the charges would prohibit InVisions and Stephen Fox from misrepresenting that:
The proposed consent order also would prohibit the defendants from failing to disclose the fact that the InVisions Process is a wig, toupee, hairpiece or other substantially similar product. In addition, the defendants would be prohibited from misrepresenting, in connection with the advertising or sale of any hair replacement product or service, that the endorsements of consumers appearing in advertising or promotion materials reflects the typical or ordinary experience of consumers who have used the hair replacement product or service. Further, the defendants would be required to disclose a material connection between a product endorser and the product's manufacturer, marketer, distributor, or seller.
The proposed consent order also would prohibit the defendants from providing the means and instrumentalities, or to otherwise assist any person the defendants know or should know are making false or misleading representations in connection with the advertising or sale of any hair replacement product or service.
The FTC filed its complaint and proposed settlement in the U.S. District Court for the Western District of Washington, in Seattle, on Nov. 4. The Commission vote to file the complaint and settlement was 5-0. The FTC's Seattle Regional Office handled this matter.
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees, which are subject to approval by the court, have the force of law when signed by the judge.
Copies of the complaint and proposed consent order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
Office of Public Affairs
Charles A. Harwood or Mary T. Benfield
Seattle Regional Office
2806 Federal Building, 915 Second Avenue
Seattle, Washington 98174
(Civil Action No. C-96-1727)
(FTC File No. 942 3121)