FOR RELEASE: MARCH 30, 1993
INFOMERCIAL MARKETER AGREES TO PAY $275,000 TO SETTLE FTC CHARGES OVER DECEPTIVE ADVERTISING OF SEVERAL PRODUCTS
National Media Corporation and its wholly-owned subsidiary, Media Arts International, Ltd., have agreed to settle Federal Trade Commission allegations that they made false and unsubstantiated claims in infomercials for several products, including one purporting to cure breast cancer and another that supposedly eliminates cellulite. The infomercials also included deceptive demonstrations and endorsements, the FTC alleged. The proposed settlement would prohibit the respondents from using similar deceptive claims or practices in marketing products in the future. In addition, the respondents have agreed to pay $275,000 for consumer redress and to disclose in future infomercials that they are paid advertising.
National Media Corporation and Media Arts currently are based in Philadelphia, Pennsylvania.
The FTC complaint against the respondents identifies four products National Media and Media Arts marketed through 30-minute advertisements, called infomercials, broadcast on television stations and cable systems nationwide:
- "Cosmetique Francais," promoted for substantially reducing or eliminating cellulite within 28 days;
- "Crystal Power," crystals that purportedly cure breast cancer;
- more - (Media Arts--03/30/93)
- "HP-9000," a household stain remover that was advertised as being completely safe for use on human skin; and
- "Magic Wand," a hand-held kitchen mixer that purportedly can, among other things, crush a whole, fresh pineapple to pulp, "in seconds."
Each of the respondents' four infomercials contained false and misleading representations, according to the complaint. For example, through the infomercial for Cosmetique Francais, the respondents allegedly represented that the product would substantially reduce or eliminate cellulite within 28 days, is more effective than diet or exercise, and that continued use of the product once or twice a week would prevent cellulite's recurrence. In fact, the FTC said, these representations are not true and the respondents did not possess adequate evidence to substantiate them.
Likewise, the "Crystal Power" infomercial contained a testimonial from a woman saying that use of the crystals caused a lump in her breast to disappear and that "the crystal saved my life." The FTC charges that the representations that Crystal Power crystals eliminate lumps or cure breast cancer are false and unsubstantiated.
The FTC also charged the respondents with making deceptive claims regarding product safety in their infomercial "Amazing Discoveries: HP-9000." The ad states that the product "will not harm, hurt your skin in any way, shape or form.... Hands stained with grease, ink and iodine clean up in seconds...and HP-9000 is completely safe." In fact, the FTC alleged HP-9000 is not completely safe for human skin, and can harm skin. In addition, the FTC alleged the respondents had no reasonable basis for these claims to the contrary.
According to the FTC complaint, the infomercial "Amazing Discoveries: Magic Wand" contained scenes that, among other things, appeared to depict the kitchen mixer crushing a whole, fresh pineapple in seconds and whipping skim milk for use as a mousse-like dessert or cake frosting. In fact, the FTC alleged, the product cannot do these things. In addition, according to the complaint, product substitutions were made to create these false impressions: instead of a whole pineapple, respondents used crushed pineapple with a slice of pineapple on top, and instead of whipped skim milk, they used a commercial dairy topping and a prepared frosting mix.
Further, the FTC charged, in the infomercial for Cosmetique Francais, the respondents represented that the consumer
endorsements it contained reflected the typical or ordinary experiences of consumers when, in fact, this is not true. In addition, the infomercials for Magic Wand and HP-9000 displayed the purported seal for the "National Association of Advertising Producers" (NAAP) and the following on-screen statement:
"The following special promotional program has been approved by the National Association of Advertising Producers for its integrity and excellence."
The FTC alleged that the respondents thus represented that the NAAP is an existing independent organization with the expertise to evaluate commercials for their integrity and excellence. The FTC charged that no such organization exists independent of the respondents and that the respondents, in fact, created and controlled NAAP.
In each of the infomercials, the FTC alleged that the respondents represented that these commercials were independent television programs and not paid advertising, when, in fact they are paid commercials.
The proposed consent agreement to settle these allegations would prohibit National Media Corporation and Media Arts International from disseminating the infomercials for Cosmetique Francais or for Crystal Power in the future. In addition, it would prohibit them from making the specific false claims alleged in the complaint for the four products or any substantially similar products. The settlement also would require the respondents to have competent evidence to support any claims about the performance, benefits, safety or efficacy of any products they sell in the future. Further, the settlement would prohibit the use of deceptive endorsements and demonstrations. It also would require the following disclosure to be placed within the first 30 seconds of any video advertisement that is 15 minutes or longer, and immediately before any ordering instructions:
THE PROGRAM YOU ARE WATCHING IS A PAID ADVERTISEMENT FOR [THE PRODUCT OR SERVICE].
Finally, the proposed consent agreement would require the respondents to pay $275,000 into a fund to be administered by the FTC. If practical, and at the discretion of the FTC, the funds will be used to provide redress to purchasers of Cosmetique Francais, Crystal Power and/or the Magic Wand. In the event that redress is not feasible, the funds shall be paid to the U.S. Treasury.
The vote of the five-member Commission to issue the complaint and proposed consent agreement was 4-0. Commissioner Mary L. Azcuenaga was recused.
The investigation was conducted by the FTC's Seattle Regional Office.
The proposed consent agreement will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.
Copies of the complaint, proposed consent agreement, and an analysis of the consent to aid the public in commenting 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.
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MEDIA CONTACT: Don Elder, Office of Public Affairs 202-326-2161
STAFF CONTACT: Patricia A. Hensley, Seattle Regional Office 2806 Federal Building, 915 Second Avenue Seattle, Washington 98174 206-220-6350
(FTC File No. 902 3177)