Consumer Protection Mission
Part 2 Consent Orders Issued
Type of Matter
|1554 Corporation||C3733||4/14/97||Unsubstantiated Earnings Claims||Work-at-Home Course|
|2943174 Canada, Inc.||C3748||6/16/97||Unsubstantiated Health and Weight-Loss Benefit Claims||Weight-Loss Patch|
|Unsubstantiated Health Benefits and Performance Claims||Home Furnace Filters|
|Abbott Laboratories, Inc.||C3745||5/30/97||Unsubstantiated Health Benefit Claims||Dietary Supplement|
|Abflex, U.S.A., Inc.||C3771
|Unsubstantiated Weight-Loss Claims||Abdominal Exerciser|
|Administrative Company, The||C3731
|Unsubstantiated Statements and Benefits of Legal Services||Living Trusts|
|Aldi Inc.||C3764||9/05/97||Fair Credit Reporting Act||Employment Applications|
|Amerifit, Inc.||C3747||6/16/97||Unsubstantiated Health and Weight-Loss Benefit Claims||Dietary Supplements|
|Apple Computer, Inc.||C3763||8/18/97||Misrepresented Performance||Personal Computers|
|BodyWell, Inc.||C3754||6/16/97||Unsubstantiated Weight-Loss Claims; Mail or Telephone Order Merchandise Rule||Shoe Insoles|
|Bruno's, Inc.||C3760||7/29/97||Fair Credit Reporting Act||Employment Applications|
|Budget Marketing, Inc.||C3698||12/13/96||Electronic Funds Transfer Act||Magazine Subscription Telemarketing|
|California SunCare, Inc.||C3715||2/11/97||Unsubstantiated Health Benefit Claims||Tanning Products|
|Computer Business Services, Inc.||C3705
|Misrepresented Earnings Claims||Work-at-Home Business Opportunity|
|Comtrad Industries, Inc.||C3719||2/25/97||Unsubstantiated Safety and Effectiveness Claims||Thermo-Electric Food Cooler/Warmer|
|Conopco, Inc.||C3706||1/23/97||Unsubstantiated Health Benefit Claims||Margarine|
|Dean Distributors, Inc.||C3755||6/16/97||Multi-Level Marketing Distribution||Weight-Loss Diet Programs|
|Efficient Labs, Inc.||C3768||9/12/97||Unsubstantiated Health Benefit Claims||Dietary Supplement|
|General Motors Corporation||C3710
|Inadequate Disclosure of Terms and Fees;
Consumer Leasing Act;
|Automobile Credit Sales and Leasing|
|Georgetown Publishing House Limited Partnership, Inc.||C3692||11/19/96||Misrepresented Advertisement as Independent Book Review||Book Publishing|
|Gerber Products Company||C3744||5/27/97||Unsubstantiated Endorsement Claims||Baby Food|
|Grey Advertising, Inc.||C3690||10/30/96||Misrepresented Performance||Advertising for Hasbro|
|C3691||10/30/96||Misrepresented Nutrition Claims||Advertising for Dannon|
|Guildwood Direct Limited||C3753||6/16/97||Unsubstantiated Weight-Loss Claims||Shoe Insoles|
|Herb Gordon Auto World, Inc.||C3734||4/15/97||Truth-in-Lending Act; Consumer Leasing Act||Automobile Sales and Leasing|
|Huling Bros. Chevrolet, Inc.||C3732||4/14/97||Truth-in-Lending Act||Automobile Sales|
|Hyde Athletic Industries, Inc.||C3695||12/04/96||Country-of-Origin Labeling||Athletic Footwear|
|Icon Health and Fitness, Inc.||C3765||9/09/97||Unsubstantiated Weight-Loss Benefit Claims||Treadmill|
|Interactive Medical Technologies, Ltd.||C3749
|Unsubstantiated Weight-Loss Benefit Claims||Weight-Loss Product|
|KCD Holdings, Inc.||C3752||6/16/97||Unsubstantiated Weight-Loss Benefit and Safety Claims||Weight-Loss Product|
|Leeka Products (Eliana Crema and Rogerio Monteiro, d/b/a)||C3767||9/12/97||Unsubstantiated Benefit, Performance, and Efficacy Claims||Weight-Loss Products, Hair-Loss Treatment|
|Life Fitness||C3766||9/09/97||Unsubstantiated Weight-Loss Benefit Claims||Exercise Equipment|
|M.E.K. International (Kave Elahie, d/b/a)||C3770||9/19/97||Unsubstantiated Weight-Loss Benefit and Efficacy Claims||Weight-Loss Products|
|Money Tree, Inc., The||C3735||4/28/97||Truth-In-Lending Act;
Fair Credit Reporting Act
|Nationwide Syndications, Inc.||C3736||4/28/97||Unsubstantiated Product Claims||Night Driving Glasses|
|Natural Innovations, Inc.||C3718
|Unsubstantiated Health and Medical Benefit Claims||Pain Relief Device|
|Nutrition 21||C3758||7/11/97||Unsubstantiated Health and Weight-Loss Claims||Chromium Picolinate|
|Phaseout of America, Inc.||C3716||2/12/97||Unsubstantiated Performance and Benefit Claims||Stop-Smoking Device|
|Premier Products, Inc.||C3720||2/26/97||Unsubstantiated Safety and Effectiveness Claims||Food-Thawing Tray|
|Progressive Mortgage Corporation||C3724||3/10/97||Truth-in-Lending Act||Mortgage Lending|
|RBR Productions, Inc.||C3696||12/10/96||Unsubstantiated Human Safety and Environmental Benefit Claims||Beauty Salon Products|
|Schering-Plough Healthcare Products, Inc.||C3741||5/16/97||Unsubstantiated Effectiveness Claims||Sunblock|
|SplitFire, Inc.||C3737||4/28/97||Unsubstantiated Performance Claims||Spark Plugs|
|Syncronys Softcorp||C3688||10/07/96||Misrepresented Performance||Computer Software|
|Telebrands Corporation||C3699||12/13/96||Unsubstantiated Performance Claims||Hearing Aid,
|Universal Merchants, Inc.||C3707||1/23/97||Unsubstantiated Health and Weight-Loss Benefit Claims||Chromium Picolinate Dietary Supplement|
|Uno Restaurant Corporation||C3730||4/04/97||Misrepresented Health and Nutritional Claims||Pizza|
|Victoria Bie||C3708||1/22/97||Unsubstantiated Health and Weight-Loss Benefit Claims||Chromium Picolinate Dietary Supplement|
|Zale Corporation||C3738||4/28/97||Deceptive Advertising;
Misrepresented Composition or Origin Labeling
|Imitation Pearl Jewelry|
1554 Corporation (d/b/a The Mellinger Company); Brainerd L. Mellinger III
A consent order with 1554 Corporation and its president settled allegations that an infomercial and other advertising for the Mellinger World Trade Mail Order Plan, a course in starting and operating a work-at-home import/mail order business, included unsubstantiated earnings claims. The order bars the respondents from making unsubstantiated claims about the performance, benefits, efficacy, or success rate of any such product or service; it also bars them from using testimonials or endorsements, unless they either substantiate that the experience is typical or qualify the representation. In a separate order, the advertising agency involved is required to pay a civil penalty (see Hawthorne Communications, Inc., page 105).
2943174 Canada, Inc. (d/b/a United Research Center, Inc.); Patrice Runner
The Commission approved a consent order with a Canadian company and its president settling allegations in connection with their marketing of Svelt-PATCH, a skin patch that purportedly melts away body fat. The order requires the respondents to have scientific substantiation for claims that any product or program controls appetite, increases metabolism, reduces body fat, causes weight loss, reduces cholesterol, or provides any weight-related benefit. It also requires them to pay $375,000 in consumer redress.
AAF-McQuay, Inc. (d/b/a AAF International); Filtration Manufacturing, Inc.; Horace R.
Allen; Brandon R. Clausen; Gary L. Savell
Two companies that manufacture and market replacement filters for home forced-air furnaces agreed to settle allegations that they made misleading claims regarding allergy relief, airborne particle removal, and cost savings when their filters are used in place of standard forced-air system filters. The two consent orders, one with AAF-McQuay and the other with Filtration Manufacturing and three company officers, require the respondents to have substantiation for all claims they make about the performance, health benefits, and efficacy of any air-cleaning product in the future.
Abbott Laboratories, Inc.
Abbott agreed to settle allegations that it made false and unsubstantiated claims in an extensive national advertising campaign promoting a nutritional beverage, Ensure, for healthy, active adults. The Commission alleged that Abbott represented without adequate substantiation that many doctors recommend Ensure as a meal supplement and meal replacement for healthy adults, including those in their thirties and forties. The consent order prohibits Abbott from making any claim about the extent to which doctors or other professionals recommend any food or dietary or nutritional supplement, or about any other recommendation, approval, or endorsement of such products, unless Abbott possesses competent and reliable scientific evidence to substantiate the claim.
Abflex, U.S.A., Inc.; Kent & Spiegel Direct, Inc.; Marsha Kent; Peter Spiegel; Martin Van Der Hoeven
The Commission approved two consent orders in connection with the marketing of an abdominal exerciser, one order with Abflex and company officer Martin Van Der Hoeven, and the other with Kent & Spiegel and its principals. The orders settled allegations that respondents' infomercials and other advertising for the exerciser contained unsubstantiated claims for weight loss and spot reduction. The orders require the respondents to have competent and reliable evidence for a variety of claims regarding the benefits, efficacy, or performance of any exercise equipment in the future. Any testimonials used in their ads must represent the typical experience of consumers or be accompanied by a disclaimer. The
Administrative Company; Pre-Paid Legal Services, Inc.; Michael P. McIntyre
Two consent orders, one with Administrative and its corporate officer Michael McIntyre, and one with Pre-Paid, settled allegations that the respondents made numerous false statements, in general, about the benefits and appropriateness of living trusts and, in particular, about the more than 3,000 living trusts they sold in conjunction with memberships in the American Association for Senior Citizens (AASC). Both orders bar the respondents from making false claims about the features and benefits of living trusts and require them to clearly disclose facts about the appropriateness of living trusts and the availability of other options for transferring assets. Administrative and McIntyre are also barred from making false, misleading, or unsubstantiated statements about any legal service they offer. Pre-Paid is required to monitor clients who sell living trusts and for whom it provides legal services to ensure they are in compliance with the settlement. In addition, Pre-Paid must offer up to $130,000 in refunds to certain past purchasers of AASC trusts.
The Commission approved a consent order with Aldi, settling allegations that this regional grocery chain violated the Fair Credit Reporting Act (FCRA) by failing to tell job applicants who were denied employment (1) when information in the applicant's credit records played a role in the denial and (2) the name and address of the firm that provided the credit history information. The order prohibits Aldi from violating the FCRA in the future and requires the chain to give the information required by the FCRA to consumers denied employment after January 1, 1994, as appropriate.
A consent order with Amerifit settled allegations in connection with the marketing of diet supplements sold under the trade names "Fat Burners" and "Fast Burners." The order requires the company to pay $100,000 for disgorgement and to have scientific substantiation for any claim that a food, drug, or dietary supplement will cause weight loss or reduce body fat. The order also requires that material bearing the name "Fat Burners Diet, Exercise and Supplement System" clearly disclose that "the dietary supplement in this system is for nutritional use only and does not contribute to weight loss or loss of body fat."
Apple Computer, Inc.
Apple agreed to offer PowerPC Upgrade Kits at less than half the original price to certain consumers who had purchased certain Performa or Macintosh computers and to give rebates to others who had already purchased the upgrade kits, as part of a settlement of allegations that the company misrepresented that the upgrade kit was available at the time of computer purchase or would be available within a reasonable time thereafter, when it actually was not available for more than a year and cost almost as much as a new PowerPC computer. The consent order also prohibits Apple from misrepresenting the availability of any microprocessor upgrade product and from representing that computer hardware is currently able to be upgraded unless the upgrade is then available in reasonable quantities.
BodyWell, Inc. (d/b/a BodyWell U.S.A.); Gerard Du Passage
A consent order with BodyWell and company officer Gerard Du Passage resolved allegations in connection with the marketing of Slimming Soles, shoe insoles that purportedly cause weight loss by stimulating certain areas of the feet. The order prohibits use of the name "Slimming Soles" without scientific substantiation that the product actually causes weight loss, requires the respondents to have scientific substantiation for weight-loss claims for any other products, and requires that testimonials represent the typical experience of consumers or disclose the fact that results are not typical. The respondents are also prohibited from violating the Mail or Telephone Order Merchandise Rule and are required to pay $100,000 in redress.
The Commission approved a consent order with Bruno's, settling allegations that this regional grocery chain violated the Fair Credit Reporting Act (FCRA) by failing to tell job applicants who were denied employment (1) when information in the applicant's credit records played a role in the denial and (2) the name and address of the firm that provided the credit history information. The order requires Bruno's to comply with the provisions of the FCRA in the future.
Budget Marketing, Inc.; Dale Branson (d/b/a Leisure Day Marketing); Charles P. Donly
(d/b/a Budget Renewal Service); Charles A. Eagle; Roy Golden (d/b/a American
Marketing Service); Dennis H. Gougion; John Harrison; Steven Johnson; Dave Keown
(d/b/a Publishers Marketing); Dale T. Lenard (d/b/a Mega-Magazine Service, Colorado
Dawn, and Key Concept); Richard Prochnow (d/b/a Direct Sales International); William J.
Stemple, Sr. (d/b/a Budget Marketing of Virginia)
Budget Marketing (BMI), a national telemarketer of magazine subscriptions, and 11 of its dealers agreed to settle allegations that their sales and collection practices were deceptive and violated federal laws. The Commission alleged that the respondents misrepresented the costs and conditions of subscription agreements and illegally deducted charges electronically from consumers' bank accounts without authorization. The consent order bars the respondents from violating the Electronic Funds Transfer Act and from carrying out other illegal practices in the future. (Also see Budget Marketing, Inc., page 104.)
CaliforniaSunCare, Inc.; Donald J. Christal
The Commission accepted a consent order with California SunCare and its president, settling allegations that they made false and unsubstantiated claims that moderate exposure to ultraviolet radiation of the sun or in indoor tanning salons provides health benefits and that users of the company's tanning products can obtain these benefits while avoiding the dangers of overexposure and burning. The order bars the respondents from misrepresenting the effects of exposure to ultraviolet radiation and requires them to have scientific substantiation for any claims about the health benefits of ultraviolet exposure and about the performance, safety, benefits, or efficacy of any tanning product or service. The order also requires the company to place a prominent cautionary statement in future advertising and labeling for their tanning products.
Computer Business Services, Inc.; Andrew L. Douglass; Jeannette L. Douglass;
Matthew R. Douglass; Peter B. Douglass
Two agreements with Computer Business Services and its principals settled allegations that the firm made false and misleading advertising claims overstating the potential earnings and profits of its home-based computer business opportunity. The consent order with the company and three principals, Andrew Douglass, Matthew Douglass, and Peter Douglass, requires them to pay $5 million in consumer redress. It also bars them from misrepresenting the earnings or success rate of investors and prohibits them from using misleading testimonials or endorsements. A separate consent order with officer Jeannette Douglass contains similar provisions, but no consumer redress requirement.
Comtrad Industries, Inc.
The Commission approved a consent order with Comtrad, settling allegations that the firm made false and unsubstantiated safety and effectiveness claims for a portable electronic food cooler that doubles as a food warmer. The order prohibits Comtrad from misrepresenting the ability of any food storage product to cool or warm foods or maintain proper cold storage temperatures and requires the company to have substantiation for claims about the safety or efficacy of such products and to disclose their potential food safety risks.
Conopco, Inc. (d/b/a Van Den Bergh Foods Company)
A consent order with Conopco, a subsidiary of Unilever United States, Inc., settled allegations that a national advertising campaign for Promise margarine included unsubstantiated claims. The consent order requires the company to have adequate scientific substantiation for claims that any margarine or spread reduces the risk of heart disease or contributes to any health-related condition. The order also bars Conopco from misrepresenting the amount of fat, saturated fat, cholesterol, or calories in any spread or margarine and requires it to follow U.S. Food and Drug Administration labeling regulations for such claims.
Dean Distributors, Inc. (d/b/a Advanced Health Care System, Cambridge Direct Sales, and Medibase)
The Commission approved a consent order with three companies in connection with the marketing of low-calorie and very-low-calorie diet programs, including the Food for Life Weight Management System and the Cambridge Diet, through a multilevel distribution system. The order requires the respondents to have substantiation for weight-loss and weight-maintenance claims. It also requires that advertisements state that weight loss may be temporary and clearly disclose the need for physician monitoring to minimize potential health risks.
Efficient Labs, Inc.; Blas Reyes-Reyes
A consent order with Efficient Labs and a company officer settled allegations that their Spanish-language advertisements for Venoflash, a dietary supplement composed of vitamins and plant derivatives, included unsubstantiated claims. The order requires the respondents to have scientific substantiation to back up future representations regarding the health benefits, performance, safety, or efficacy of any food, drug, cosmetic, or dietary supplement promoted or used to treat conditions or illnesses related to the circulatory system.
General Motors Corporation; American Honda Motor Co., Inc.; American Isuzu Motors, Inc.; Mazda Motor of America,
Inc.; Mitsubishi Motor Sales of America, Inc.
Five major automobile manufacturers agreed to provide consumers with clear, readable, and understandable cost information in their car leasing and financing advertisements, settling allegations that the companies' advertising inadequately disclosed significant lease terms and fees. Television commercials cited by the Commission allegedly contained critical cost disclosures in small, often scrolling print that appeared on the screen for only a few seconds. The five final consent orders bar the companies from misrepresenting the total amount due at the inception of a car lease and require their advertisements to disclose clearly and conspicuously that the deal is a lease, the total amount due at lease inception, and other payments required and charges imposed. The orders with General Motors and Mitsubishi also bar these companies from misrepresenting terms for car loans and require them to disclose clearly and conspicuously the amount of any balloon payment, the correct annual percentage rate, and other important credit terms.
Georgetown Publishing House Limited Partnership, Inc.; Georgetown Publishing House,
Inc.; Daniel Levinas
The Commission approved a consent order with Georgetown Publishing House Limited, its general partner, and its president, settling allegations that they used deceptive advertising tactics to promote the sale of a book. The respondents allegedly misled consumers by sending them what appeared to be an independent book review torn from a magazine, with an attached handwritten personalized message, but which was actually an advertisement prepared and sent by the respondents. The order prohibits the respondents from misrepresenting that a paid advertisement is an independent review or article and from misrepresenting that a product has been independently reviewed or evaluated.
Gerber Products Company
A consent order with Gerber settled allegations that the company made false and unsubstantiated "doctor recommended" claims for Gerber baby food. The order bars the company from making any claims about the extent to which doctors or other health, nutrition, child care, or medical professionals recommend, approve of, or endorse baby or toddler food, without competent and reliable scientific substantiation, and from misinterpreting the results or existence of any survey, test, or research.
Grey Advertising, Inc.
The Commission approved two consent orders with Grey, settling allegations over the role the agency played in advertising a paint-sprayer toy marketed by Hasbro, Inc., and a line of frozen yogurt marketed by The Dannon Company. The order in connection with the Hasbro toy resolves allegations that a TV commercial employed a hidden motorized air compressor to misrepresent how easily children could operate the sprayer. The order prohibits Grey from using deceptive demonstrations or otherwise misrepresenting the performance of any toy. The second order resolves allegations that a commercial falsely implied that some of the flavors in the Pure Indulgence line of yogurt were low in fat and calories. This order prohibits Grey from misrepresenting the fat, saturated fat, cholesterol, or calories in frozen yogurt, frozen sorbet, and ice cream.
Guildwood Direct Limited (d/b/a Intermed Laboratories)
A consent order with Guildwood resolved allegations in connection with the marketing of Slimming Insoles, shoe insoles that purportedly cause weight loss by stimulating certain areas of the feet. The order prohibits use of the name "Slimming Insoles" without scientific substantiation that the product actually causes weight loss, requires the respondents to have scientific substantiation for weight-loss claims for any other products, and requires that testimonials represent the typical experience of consumers or disclose the fact that the results are not typical. In addition, Guildwood is required to pay $7,500 in consumer redress.
Herb Gordon Auto World, Inc. (d/b/a Herb Gordon Auto World, Herb Gordon Dodge,
Herb Gordon Mercedes-Benz, Herb Gordon Nissan, Herb Gordon Oldsmobile, Herb
Gordon Volvo, and Herb Gordon Used Cars)
A consent order with Herb Gordon settled allegations that the company and seven of its dealerships violated federal laws by misrepresenting, hiding, or failing to disclose terms in advertising automobile financing plans. According to the Commission, car sales advertisements touted low monthly payments and misrepresented or failed to disclose later higher payments, and lease advertising failed to disclose all required costs and terms. The consent order prohibits the respondents from misrepresenting or obscuring important cost information and from advertising financing or leasing terms that are not actually available to consumers. The order requires the respondents to comply with federal laws mandating accurate, clear, and conspicuous disclosure of rates, payments, and other terms in financed automobile purchases and leases.
Huling Bros. Chevrolet, Inc.; Huling Bros. Chrysler/Plymouth, Inc.; Huling Buick, Inc.
The Huling Bros. car dealerships agreed to settle allegations that they misrepresented, hid, or failed to disclose the terms of their advertised automobile deals, in violation of federal laws. The Commission alleged that their advertising for financed car purchases understated the true annual percentage rate (APR) or failed to state the APR at all and included conflicting payment amounts and terms or rebates that were not actually available to consumers. The consent order bars the respondents from misrepresenting any payments, rebates, or other terms of financed car deals. It also requires Huling Bros. to calculate the APR in accordance with regulations and to clearly include in their advertising all disclosures required by law.
Hyde Athletic Industries, Inc.
Hyde agreed to a consent order settling allegations that the shoe company misrepresented that all of its athletic footwear is made in the United States, when a substantial amount is made wholly abroad. The order prohibits the company from making such misrepresentations, but provides that Hyde would not be in violation of the order if it makes truthful statements about domestic production of footwear, accompanied by certain disclosures.
Icon Health and Fitness, Inc.; IHF Capital, Inc.; IHF Holdings, Inc.
A consent order with Icon, which bills itself as the world's largest manufacturer of home fitness equipment, and two related companies settled allegations that they made unsubstantiated claims about the weight-loss benefits of the Proform Cross Walk Treadmill. The order requires the respondents to have substantiation for future claims about the weight-loss, calorie-burning, or fat-burning benefits of any exercise equipment. The order also requires that testimonials in advertising either represent the typical experience of users or disclose that the results are not typical.
Interactive Medical Technologies, Ltd.; Effective Health, Inc.; William Pelzer, Jr.;
William E. Shell, M.D.
The Commission approved three separate consent orders with Interactive Medical and Effective Health, William Pelzer, and William Shell, M.D., settling allegations in connection with both the marketing of Lipitrol, a purported weight-loss product, and the assistance provided to KCD Holdings, Inc., in marketing SeQuester, a similar product (see below). Both Lipitrol and SeQuester are over-the-counter cellulose-bile products that purportedly aid in weight loss and fat and cholesterol reduction. The order with Interactive Medical and Effective Health requires scientific substantiation for claims and prohibits misrepresentations regarding the benefits or safety of any product or program. All three orders bar the respondents from assisting entities that make false, misleading, or unsubstantiated claims for any weight-loss, fat-reduction, or cholesterol-reduction product or program, and require them to monitor the business practices of certain parties to whom they provide assistance. The two companies must pay $35,000 in redress, and Shell must pay $20,000 in redress and post a performance bond before he is involved in marketing any weight-loss, fat-reduction, or cholesterol-reduction product or program in the future.
KCD Holdings, Inc.; Deerfield Corporation; KCD Incorporated; Gerald E. Hatto; Clark
M. Holcomb; Bonnie L. Richards
The Commission approved a consent order with three related companies and three company officers, settling allegations in connection with the marketing of SeQuester, an over-the-counter cellulose-bile product that purportedly aids weight loss and fat and cholesterol reduction. The order requires the respondents to have scientific substantiation for claims regarding the benefits or safety of any product or program, including claims that it provides any weight-loss benefit or reduces the risk of certain health problems. The order also requires KCD Holdings, KCD Incorporated, and Bonnie Richards to pay $150,000 in consumer redress.
Leeka Products (Eliana Crema and Rogerio Monteiro, d/b/a)
Two individuals doing business as Leeka settled allegations that their Spanish-language advertisements for three products (a weight-loss nutritional supplement, a product to improve the results of exercise, and a product to prevent or retard hair loss) contained unsubstantiated claims. The consent order requires the respondents to have scientific evidence to support any claims they make about the benefits, efficacy, or performance of any food, drug, cosmetic, or dietary supplement. The order also prohibits them from using product names that represent that a product prevents or retards hair loss unless they can substantiate that it does. Finally, the order prohibits the respondents from misrepresenting the existence or conclusions of any test, study, or research.
Life Fitness; The Life Fitness Companies L.P.
A consent order with Life Fitness, which markets a variety of exercise equipment, settled allegations that the company made unsubstantiated claims about the weight-loss benefits of its Lifecycle stationary exercise cycle. The order requires Life Fitness and its general partner, The Life Fitness Companies, to have substantiation for future claims about the weight-loss, calorie-burning, or fat-burning benefits of any exercise equipment. It also prohibits them from misrepresenting the result of any test or study relating to these types of benefits.
M.E.K. International (Kave Elahie, d/b/a)
A consent order with Kave Elahie, doing business as M.E.K., settled allegations that the company's Spanish-language advertisements included unsubstantiated claims that NutraTrim cream reduces or eliminates cellulite and fat and that NutraTrim chromium picolinate tablets cause weight loss, reduce cholesterol, reduce body fat and cellulite, reduce appetite, and increase metabolism. The order requires the respondents to have competent and reliable scientific evidence for similar claims, as well as any other claims about the performance, benefits, efficacy, or safety of any food, drug, or dietary supplement. The order also prohibits the company from misrepresenting the existence or results of any test or study and requires that testimonials represent the typical experience of consumers or be accompanied by a disclaimer.
The Money Tree, Inc.; Vance R. Martin
A consent order with Money Tree and its president settled allegations in connection with their business of making short-term installment loans, most of them to low-income consumers. According to the Commission, the respondents required consumers applying for loans to purchase insurance and/or an auto club membership. The costs of these extras were included in the amount financed instead of in the finance charge and annual percentage rate, causing consumers to pay interest on the premiums and fees for these extras, in violation of the Truth-in-Lending Act. In addition, the respondents allegedly violated the Fair Credit Reporting Act (FCRA) by failing to disclose the names of the credit bureaus that supplied credit reports when consumers' credit applications were denied. The consent order requires Money Tree to offer its customers the chance to cancel the insurance they purchased and to obtain refunds or credits. The order bars the respondents from misrepresenting the purchase of insurance and other extras and requires them to disclose in the future that such insurance is optional. The order also bars the respondents from violating the FCRA regarding disclosures to consumers when credit reports play a role in the denial of credit. In a separate agreement, the respondents are required to pay a civil penalty (see The Money Tree, Inc., page 107).
Nationwide Syndications, Inc.; Thomas W. Karon
Nationwide and its company president agreed to settle allegations that claims that their NightSafe Glasses improve night vision and make night driving safer were false and not supported by reliable evidence. The consent order prohibits the company from making such claims and bars them from using the name "NightSafe" or any other name that would imply that such a product makes night driving safer. The order requires the respondents to have competent and reliable scientific evidence to substantiate claims about the efficacy, performance, benefits, or safety of such products. In addition, the respondents are required to pay $125,000 in consumer redress and to provide the Commission with names and addresses of consumers who purchased the glasses so that they can be notified that wearing the glasses at night may in fact be unsafe.
Natural Innovations, Inc.; World Media T.V., Inc.; William S. Gandee
The Commission approved two consent orders, one with Natural Innovations and its president and one with World Media, settling allegations stemming from the advertising and sale of a purported pain relief device, the Stimulator, which emits a weak electric spark when activated. The orders require the respondents to have scientific substantiation to support any pain relief or other health or medical benefit claims for any device and either to substantiate the claim that testimonials represent the typical experience of users or to accompany such endorsements with a prominent disclaimer.
Nutrition 21; Selene Systems, Inc.; Herbert H. Boynton
A consent order with Nutrition 21, Selene Systems, and Herbert Boynton settled allegations that advertising claims for their weight-loss and health care products containing chromium picolinate were unsubstantiated. Nutrition 21 is the sole U.S. supplier for chromium picolinate and sells it to the public through distributors. The order requires competent and reliable scientific evidence to support the challenged claims and any representation about the benefits, performance, efficacy, or safety of any food, dietary supplement, or drug the respondents advertise or sell, and prohibits misrepresentation of the results of any test, study, or research. The order also requires the company to send its past, current, and future distributors a notice of the Commission's allegations and a request not to use sales materials that make the challenged claims.
Phaseout of America, Inc.; Products & Patents, Ltd.
An agreement with Phaseout and Products & Patents settled allegations that they made false or unsubstantiated claims for PhaseOut, a purported stop-smoking device that also was said to make cigarettes less harmful by puncturing holes in the filters. The consent order requires the companies to contact past purchasers of the device, notify them of the Commission's action, and advise them that the device has not been proven to reduce the risks of smoking or make cigarettes safer. The order bars the companies from misrepresenting any test or study and requires them to have scientific substantiation for any claim that an endorsement reflects the typical experience of users.
Premier Products, Inc.; T.V. Products, Inc.; T.V.P. Corporation; Issie Kroll; Michael
A consent order with three companies and two company officers settled allegations that they made false and unsubstantiated claims about the safety and effectiveness of Miracle Thaw, a tray that purportedly thaws frozen food quickly and safely. The order prohibits the respondents from misrepresenting how long it takes any product to thaw food, the process by which it does so, and the existence or results of any study. The order also bars the respondents from misrepresenting the risk of bacteria buildup on foods with such a product and requires them to have substantiation for claims about product safety or efficacy.
Progressive Mortgage Corporation; Sanford Cramer
Progressive Mortgage and its president settled allegations stemming from their mortgage lending services. According to the Commission, the respondents provided false and misleading information about payment schedules and the cost of credit to mortgage applicants. The consent order bars the respondents from misrepresentations in the future and requires them to provide full and accurate disclosure of finance charges, annual percentage rates, and other terms and conditions of financing, in compliance with the Truth-in-Lending Act.
RBR Productions, Inc.; Richard Rosenberg
The Commission reached an agreement with RBR Productions, a supplier of beauty salon products, and corporate officer Richard Rosenberg, settling allegations that they overstated the human safety and environmental benefits of two disinfectants and one aerosol fingernail-glue drying spray. The consent order prohibits the respondents from making the allegedly false claims and requires them to have competent and reliable evidence to back up similar claims.
Schering-Plough Healthcare Products, Inc.
Schering-Plough agreed to settle allegations that advertisements for its Coppertone Kids 6-Hour Waterproof Sunblock were deceptive in claiming that one application would provide six hours of protection from the sun for children engaged in sustained vigorous activity in and out of the water. According to the Commission, that claim was unsubstantiated because the company did not test the product under those conditions. The consent order prohibits Schering-Plough from making certain claims about the effectiveness of its sunscreen protection for children without scientific substantiation and requires it to produce and distribute consumer education brochures about the importance of sunscreens and their proper application.
A consent order with SplitFire settled allegations that the company made false and unsubstantiated claims for the fuel economy, efficiency, and improved performance of its spark plugs. The order prohibits SplitFire from making such claims without competent and reliable scientific evidence. It also bars misrepresentations about any test or study and requires the company to have substantiation for claims made in endorsements or testimonials and to disclose what typical consumers experience or indicate the limited applicability of the endorser's experience.
Syncronys Softcorp; Wendell Brown; Rainer Poertner; Daniel G. Taylor
The Commission approved a consent order with Syncronys Softcorp and three of its officers, settling allegations that they made misrepresentations and/or unsubstantiated claims regarding the ability of two computer software programs they manufactured, SoftRAM and SoftRAM95, to improve the performance of personal computers using Windows programs. The order prohibits the respondents from making a variety of misrepresentations about the capabilities of these or similar software products and requires them to have appropriate substantiation for any claims they make about any product intended to improve computer performance.
Telebrands Corporation; Ajit Khubani
The consent order with Telebrands, a mail and telephone order company, and its owner settled allegations that they made false and unsubstantiated performance claims in advertising two products, a hearing aid and a television antenna. The order prohibits the respondents from making false claims about the ability of the hearing aid to amplify sound and the ability of the antenna to improve television reception and requires them to have substantiation for any claims about the performance and effectiveness of these or similar products.
Universal Merchants, Inc.; Steven Oscherowitz
The Commission approved a consent order with Universal Merchants and its president Steven Oscherowitz, settling allegations that the respondents made unsubstantiated claims about the weight loss and health benefits of chromium picolinate, a popular dietary supplement. The order requires them to have competent and reliable scientific substantiation for any claims they make about the performance, benefits, or safety of chromium picolinate or any food, dietary supplement, or drug, and bars them from misrepresenting any test or study.
Uno Restaurant Corporation; Pizzeria Uno Corporation; Uno Restaurants, Inc.
Uno Restaurant Corporation and two subsidiaries agreed to settle allegations that they falsely advertised their Thinzettas line of thin-crust pizzas as low fat. The consent order bars the respondents from misrepresenting the existence or amount of fat or any other nutrient or substance in any pizza or other "baked crust" food product.
Victoria Bie, d/b/a Body Gold
The Commission approved a consent order with Victoria Bie, doing business as Body Gold, settling allegations that the respondent made unsubstantiated claims about the weight loss and health benefits of chromium picolinate, a popular dietary supplement. The order requires her to have competent and reliable scientific substantiation for any claims she makes about the performance, benefits, or safety of chromium picolinate or any food, dietary supplement, or drug, and bars her from misrepresenting any test or study.
Zale, the nation's largest jewelry retailer, agreed to settle allegations that it deceptively advertised its Ocean Treasures line of imitation pearl jewelry, creating the impression that the jewelry was composed of cultured pearls. The consent order prohibits Zale from misrepresenting the composition or origin of any imitation, cultured, or natural pearl product. The order requires Zale to disclose clearly and prominently the nature of the pearl jewelry it sells and to make available consumer information in its stores about the definition and origin of natural, cultured, and imitation pearls.