FOR YOUR INFORMATION.......................OCTOBER 7, 1993
The Federal Trade Commission has given final approval to a
consent agreement with Synchronal Corporation, settling charges
that it and several other respondents made false and unsubstanti-
ated claims in infomercials for a purported baldness cure and a
cellulite treatment. The Commission's action makes the consent
order provisions binding on the respondents.
As required by the final order, the company paid $3.5
million into a consumer redress fund. The order also prohibits
Synchronal from disseminating the two infomercials, "Can You Beat
Baldness?" which advertised the Omexin System for Hair, and
"Cellulite Free: Straight Talk with Erin Gray," which advertised
the Anushka Bio-Response Body Contouring Program. In addition,
two of the company's former officers are prohibited from making
any unsubstantiated product claims, and one of them, Ira Smolev,
is required to maintain a $500,000 escrow account prior to
advertising a wide variety of consumer products.
Further, the order prohibits two expert endorsers who
appeared in the infomercials -- Ana Blau, owner of Manhattan's
Anushka Institute, and Dr. Steven Victor, a New York City derma-
tologist who appeared in the "Can You Beat Baldness?" infomercial
-- from making any false or unsubstantiated claims regarding the
performance or safety of any product or service they market. If
Blau and Victor provide any expert endorsement, they are required
to have competent and reliable scientific evidence to support it,
and to actually exercise their represented expertise by examining
or testing the product.
The settlement stems from October 1991 FTC charges against
Synchronal Corporation, Synchronal Group, Inc., Smoothline Cor-
poration, and Omexin Corporation, all of the New York metropoli-
tan area; Ira Smolev, Richard E. Kaylor, and Thomas L. Fenton,
who were officers of Synchronal; and expert endorsers Blau and
Victor. The order applies to all respondents except Fenton,
whose case remains in litigation.
The order further requires all respondents to have competent
and reliable evidence to support any representations they make
about the performance or safety of any product or service they
market. The evidence will have to be of a scientific nature for
representations about any food, drug or device.
Respondents Synchronal, Smolev, and Kaylor are prohibited
from disseminating any advertisement that represents itself to be
something other than a paid ad. Moreover, if these respondents
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Synchronal 2ndstep--10/07/93)
disseminate any commercial 15 minutes in length or longer, the
commercial is required to include visual disclosures within the
first 30 seconds, and immediately before any ordering informa-
tion, that the program is a paid ad.
Another provision in the order prohibits Synchronal, Smolev,
and Kaylor from selling products through "continuity" programs
(wherein consumers receive and are billed for periodic shipments
of products), without the express consent of the consumers, and
without disclosing all the terms and conditions. Also, each
shipment must be accompanied by a written statement of how to
cancel, and include a toll-free 800 number or a postage-paid
mailer.
In addition, Synchronal, Smolev, and Kaylor will be re-
quired to accompany any unsolicited product sent to a consumer
with a statement that it is a gift. If these respondents offer a
free trial period, they must disclose in written notices with the
shipment that consumers can return the products by calling an 800
number, and that the respondents will pay the costs of the
return.
The consent agreement was announced for a 60-day public-
comment period on June 14. The Commission vote to issue the
order in final form occurred on Oct. 1, and was 5-0.
NOTE: A consent agreement is for settlement purposes only and
does not constitute 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 up to $10,000.
A news release summarizing the complaint and consent agree-
ment was issued at the time the Commission accepted the consent
agreement for public comment. Copies of that release and of the
complaint and final 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.
# # #
MEDIA CONTACT: Howard Shapiro, Office of Public Affairs
202-326-2176
STAFF CONTACT: Richard Cleland, Bureau of Consumer
Protection, 202-326-3088
or
Michael Joel Bloom, New York Regional Office
150 William Street, Suite 1300
New York, New York 10038
212-264-1207
(FTC File Nos. 892 3200, 892 3141, 892 3115; Docket No. 9251)
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