UNITED STATES OF AMERICA In the Matter of VALUEVISION INTERNATIONAL, INC., a corporation. FILE NO. 002-3308 AGREEMENT CONTAINING CONSENT ORDER The Federal Trade Commission has conducted an investigation of certain acts and practices of ValueVision International, Inc., corporation ("proposed respondent"). Proposed respondent, having been represented by counsel, is willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore, IT IS HEREBY AGREED by and between ValueVision International, Inc., by its duly authorized officers, and counsel for the Federal Trade Commission that: 1. Proposed respondent ValueVision International, Inc. is a Minnesota corporation with its principal office or place of business at 6740 Shady Oak Road, Eden Prairie, Minnesota, 55344. 2. Proposed respondent admits all the jurisdictional facts set forth in the draft complaint. 3. Proposed respondent waives:
4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of thirty (30) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding. 5. This agreement is for settlement purposes only and does not constitute an admission by proposed respondent that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true. 6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondent, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondent's address as stated in this agreement by any means specified in Section 4.4(a) of the Commission's Rules shall constitute service. Proposed respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order. 7. Proposed respondent has read the draft complaint and consent order. It understands that it may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final. ORDER DEFINITIONS For purposes of this order, the following definitions shall apply: 1. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. 2. Unless otherwise specified, "respondent" shall mean ValueVision International, Inc., its successors and assigns, and its officers, agents, representatives, and employees. 3. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44. I. IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of WeightPerfect Fat Loss Accelerator Daytime and WeightPerfect Fat Loss Accelerator Nighttime (collectively "WeightPerfect Fat Loss Accelerators"), Fight the Fat, NutriFirm Perfect Body Solution or any other food, drug, dietary supplement or cosmetic, as "food," "drug," and "cosmetic" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product:
unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. II. IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of NutriFirm Internal Cleanser, or any other food, drug, or dietary supplement, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product:
unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. III. IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of NutriFirm Vitamin H Serum, or any other food, drug, dietary supplement or cosmetic, as "food," "drug" and "cosmetic" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product prevents or slows the rate of hair-loss, including hair-loss in women after pregnancy, unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. IV. IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any food, drug, dietary supplement, cellulite-treatment product or weight-loss program in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product can or will cure, treat, or prevent any disease, or have any effect on the structure or function of the human body unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. V. IT IS FURTHER ORDERED that respondent, or its successors and assigns, shall offer Refunds to Eligible Purchasers of WeightPerfect Fat Loss Accelerator Daytime, WeightPerfect Fat Loss Accelerator Nighttime, Fight the Fat, NutriFirm Perfect Body Solution, NutriFirm Internal Cleanser, and/or NutriFirm Vitamin H Serum (hereafter, "covered products"), who purchased such products through ValueVision, in accordance with the provisions of this Part. For purposes of this Part, "Eligible Purchaser" shall mean any person who purchased any of the covered products through respondent between February 1, 2000 and the date respondent executed this order, who is dissatisfied with such product(s), and who has not previously received a Refund. "Refund" shall mean either: (i) a cash refund for the full purchase price of the covered product(s), including applicable shipping and handling charges, or (ii) if respondent elects in its sole discretion, a rebate certificate equal in value to, or of a specified value greater than, the full purchase price of such product(s), including applicable shipping and handling charges, and redeemable toward any product or service offered through respondent. Provided, however, each Eligible Purchaser shall have the right to elect a cash refund. With regard to Eligible Purchasers who purchased multiple products as part of a single order, "applicable shipping and handling charges" shall mean the lesser of: (a) the amount of shipping and handling charges actually paid by the Eligible Purchaser attributable to the individual covered product(s) or, to the extent applicable, the multiple-product units containing the covered product(s) in the order; or (b) the amount of shipping and handling charges that would have been charged had the Eligible Purchaser obtained only the individual covered product(s) as a separate order.
VI. Nothing in this order shall prohibit respondent from making any representation for any drug that is permitted in labeling for such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration. VII. Nothing in this order shall prohibit respondent from making any representation for any product that is specifically permitted in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990. VIII. IT IS FURTHER ORDERED that respondent ValueVision International, Inc., and its successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:
IX. IT IS FURTHER ORDERED that respondent ValueVision International, Inc., and its successors and assigns, shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. X. IT IS FURTHER ORDERED that respondent ValueVision International, Inc. and its successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. XI. IT IS FURTHER ORDERED that respondent ValueVision International, Inc. and its successors and assigns shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. XII. This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:
Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. Signed this day of , 2001 VALUEVISION INTERNATIONAL, INC By: GENE MCCAFFERY RONALD J. GREENE KEITH FENTONMILLER DANIEL KAUFMAN APPROVED: C. LEE PEELER JOAN Z. BERNSTEIN APPENDIX 1 NOTICE OF REFUND (CASH OR REBATE) [To be printed on letterhead of ValueVision International, Inc.] [Date] [Name and Address of Recipient] Dear [Recipient]: You may be eligible for a refund. The Federal Trade Commission (the "FTC") has been reviewing advertising claims regarding the benefits and effectiveness of the following products offered by various manufacturers through ValueVision:
To settle its differences with the FTC, ValueVision has agreed to provide refunds to customers who
If you are one of these customers, you are eligible for a refund of the purchase price of the product(s), together with shipping and handling charges. You also have the choice of receiving your refund as a rebate certificate redeemable toward the purchase of any product offered through ValueVision. To claim your refund, simply complete the attached form and return it to ValueVision by [specify return date 160 days from service of order]. You may send us, along with the enclosed form, copies of any receipts, credit card statements or other documents showing your purchases of any of the products listed above. You do not have to send us any proof of purchase; however, if you do not, the amount of your refund will be based upon information in our computer system. Our customers are very important to us, and we take your satisfaction with products purchased through ValueVision very seriously. Please note: If you bought more than three bottles of any one product, the amount of your refund will be limited to three bottles. Sincerely, [Specify ValueVision Officer] Request for Refund (Please print or type) Name: _______________________________________________________________________ Mailing Address: ________________________________________________________________ City: _____________________________ State: __________________ Zip Code: _____________ Telephone Number: ( )
I would like my refund in the form of (check one):
To get your refund, you must sign below and return this form to ValueVision at the following address by [specify return date 160 days from service of order]: ValueVision International, Inc.
APPENDIX 2 NOTICE OF REFUND (CASH ONLY) [To be printed on letterhead of ValueVision International, Inc.] [Date] [Name and Address of Recipient] Dear [Recipient]: You may be eligible for a refund. The Federal Trade Commission (the "FTC") has been reviewing advertising claims regarding the benefits and effectiveness of the following products offered by various manufacturers through ValueVision:
To settle its differences with the FTC, ValueVision has agreed to provide refunds to customers who
If you are one of these customers, you are eligible for a refund of the purchase price of the product(s), together with shipping and handling charges. To claim your refund, simply complete the attached form and return it to ValueVision by [specify return date 160 days from service of order]. You may send us, along with the enclosed form, copies of any receipts, credit card statements or other documents showing your purchases of any of the products listed above. You do not have to send us any proof of purchase; however, if you do not, the amount of your refund will be based upon information in our computer system. Our customers are very important to us, and we take your satisfaction with products purchased through ValueVision very seriously. Please note: If you bought more than three bottles of any one product, the amount of your refund will be limited to three bottles. Sincerely, [Specify ValueVision Officer] Request for Refund (Please print or type) Name: ________________________________________________________________ Mailing Address: _________________________________________________________ City: __________________________ State: _______________ Zip Code: ___________ Telephone Number: ( )
To get your refund, you must sign below and return this form to ValueVision at the following address by [specify return date 160 days from service of order]: ValueVision International, Inc. [address]
APPENDIX 3 REFUND NOTICE LETTER ENVELOPE FORWARDING AND RETURN POSTAGE GUARANTEED ValueVision International, Inc. [address] Window Envelope [The following statement is to appear in a box, on the left hand side of the envelope in red, in extra large, bold type face] Attention: Important Refund Information Inside APPENDIX 4 REFUND CHECK ENVELOPE FORWARDING AND RETURN POSTAGE GUARANTEED ValueVision International, Inc. [address] Window Envelope (indicates a check is enclosed) |