A federal district court has permanently barred a group of marketers of bogus weight-loss products from making false claims about the effectiveness of their products. In January 2003, the Federal Trade Commission charged Slim Down Solution, LLC, Maderia Management, Inc., and several related companies and individuals with misrepresenting that their product, "Slim Down Solution" and its main ingredient, D-glucosamine, could block dietary fat absorption and cause consumers to lose weight without changing their diet, in violation of federal law. In May 2004, the U.S. District Court for the Southern District of Florida granted summary judgment against the two sets of defendants and entered an Order and Judgment for Permanent Injunction and Other Equitable Relief against each of them. On October 6, 2004, the court entered a stipulated modification settling one remaining complaint count and the monetary judgment against Slim Down Solution, LLC, and its related entities and owners.
The Commission's complaint named Slim Down Solution, LLC, Slim Down Solution, Inc., S.S.T. Management, Inc., The KARA Group, LLC, and their principals, Ronald and Kathleen Alarcon (collectively, the SDS defendants); and Maderia Management, Inc., Polyglucosamine, Ltd., and their principal, Steven Pierce (collectively, the Maderia defendants).
The SDS defendants, based in West Palm Beach, Florida, advertised and sold Slim Down Solution through nationally disseminated infomercials that aired on cable television channels such as Bravo, Comedy Central, and PAX Cable, and on the Internet at www.slimdownsolution.com. In addition, the SDS defendants sold their product through a continuity program, automatically shipping consumers Slim Down Solution and charging consumers' credit cards or debiting their bank accounts monthly. The Maderia defendants, based in Conroe, Texas, have manufactured and sold D-glucosamine products directly to consumers and other resellers through their Internet sites, including www.polyglucosamine.com. Resellers, in turn, promoted the products to consumers under private labels such as "Fight the Fat," "Everslim," "Mini Max," and "Slim Down Solution."
The court found that the defendants deceptively advertised Slim Down Solution and D-glucosamine (both chitosan derivatives) as "fat trapper" weight-loss products that could prevent consumers from absorbing up to 20 grams of dietary fat per dose. The court also found that the SDS defendants falsely claimed that Slim Down Solution causes weight loss even if consumers eat substantial amounts of foods high in fat, such as cheeseburgers, french fries, and cheesecake.
The Permanent Injunction Orders entered by the court bar the defendants from making these and other false claims, such as that Slim Down Solution or D-glucosamine cause substantial weight loss without calorie reduction or exercise. The orders also prohibit the defendants from claiming, without competent and reliable scientific proof, that Slim Down Solution or D-glucosamine cause any weight loss at all. The defendants further are barred, in connection with the sale of any product, from making false or unsubstantiated efficacy or safety claims, or misrepresenting the results of any scientific test or study.
The court orders hold the defendants jointly and severally liable for more than $30 million in consumer redress. To satisfy the $30 million judgment partially, the court ordered the defendants and third parties holding the defendants' assets to turn over to the FTC all assets traceable to Slim Down Solution or D-glucosamine sales. Further, the orders bar the defendants from selling their customer lists. The orders also impose on the defendants compliance reporting and record-keeping requirements.
On December 16, 2003, individual defendants Ronald Alarcon and Kathleen Alarcon filed for bankruptcy under Chapter 13 of the Bankruptcy Code. On May 14, 2004, the court in the FTC action found that the Commission's action against the Alarcons was not stayed because of the bankruptcy proceeding and granted the Commission's motion for summary judgment against them.
As part of the stipulated modification to the final order entered by the Court on October 6, 2004, the SDS defendants will dismiss their bankruptcy case and pay $725,000 in consumer redress. The Alarcons have put up their Florida home as collateral for payment of this judgment. If the SDS defendants have lied about their financial situation, or if they do not pay the required amount by December 28, 2004, they will be liable for the entire original judgment of $30,135,784. The modified order has an added provision prohibiting the SDS defendants from enrolling consumers in a continuity program or billing consumers without their express consent. The Maderia defendants remain liable for the original judgment.
The Commission vote to approve the modified order was 5-0. The modified order was entered by the U.S. District Court for the Southern District of Florida on October 6, 2004.
The FTC has the following tips for consumers who are interested in weight-loss products or programs:
For more information on weight loss and diets, visit the FTC's Web site at: www.ftc.gov/dietfit.
Copies of the modified order 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 in English or Spanish (bilingual counselors are available to take complaints), 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 File No. X030017)
(Civ. No. 03-80051-CIV-PAINE/JOHNSON)