UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

PAIN STOPS HERE! INC., a corporation, and SANDE R. CAPLIN, individually and as an officer of the corporation.

FILE NO. 982 3175

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission has conducted an investigation of certain acts and practices of proposed respondents, Pain Stops Here! Inc. and Sande R. Caplin, individually and as an officer of the corporation. Proposed respondents are 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 Pain Stops Here! Inc. by its duly authorized officer, and Sande R. Caplin, individually and as an officer of the corporation, and counsel for the Federal Trade Commission that:

1.a. Proposed respondent Pain Stops Here! Inc. ("PSH") is a New York corporation with its principal office or place of business at 100 Fox Hill Drive, Baiting Hollow, N.Y. 11933.

1.b. Proposed respondent Sande R. Caplin is the President and majority shareholder of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation. His principal office or place of business is the same as that of PSH.

2. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.

3. Proposed respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; and

c. All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

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 sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondents, 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 respondents 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 respondents, (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 respondents' address as stated in this agreement by any means specified in Section 4.4(a) of the Commission's Rules shall constitute service. Proposed respondents waive any right they 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 respondents have read the draft complaint and consent order. Proposed respondents understand that they 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. "Magnetic therapy products" shall mean any product that contains a magnet of any kind purporting to relieve the symptoms of, treat, mitigate, cure, relieve, heal or alleviate any disease or health condition, including but not limited to Magnetized Water Ceramic Magnetic Ring, Sleep Pad, Seat Pad, Pillow Insert, Thigh Band, TMJ Band, Wrist Band, Back Band, Ankle Band, Calf Band, Eyemask, Arm Band, Knee Band, Neodymium Magnets, Soft Magnetic Pad, and Neck Band.

3. Unless otherwise specified, "respondents" shall mean PSH, its successors and assigns; Sande R. Caplin, individually and as an officer of the corporation; and each of the above's agents, representatives and employees.

4. "Distributor" shall mean any purchaser or other transferee of any product covered by this order who acquires product from respondents, with or without valuable consideration, and who sells, or who has sold, such product to other sellers or to consumers, including but not limited to individuals, retail stores, or catalogs.

5. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44.

I.

IT IS ORDERED that respondents, directly or through any partnership, corporation, subsidiary, division, or other device, including franchisees, licensees or distributors, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of magnetic therapy products in or affecting commerce, shall not represent, in any manner, expressly or by implication, that such products:

A. Are effective in the treatment of cancer;

B. Cure liver disease or other diseased internal organs;

C. Are effective in the reduction of cholesterol deposits in the arteries and veins or normalizing the circulatory system;

D. Are effective in breaking up kidney or gallbladder stones or in the prevention of further formation of stones;

E. Are effective in the mitigation or treatment of infectious diseases, urinary infection, gastric ulcers, dysentery, diarrhea, skin ulcers, or bed sores;

F. Prevent or reverse heart disease, circulatory disease, arthritis, auto-immune illness, neuro-degenerative disease, or allergies;

G. Are effective in the mitigation or treatment of arthritis, bursitis, tendinitis, sprains, strains, sciatica, lameness, navicular, and foot growth problems in animals;

H. Stimulate the body's production of the hormone Melatonin;

I. Are effective in the mitigation or treatment of pain caused by conditions such as arthritis, bursitis, and sciatica; or

J. Are effective in stimulating significant growth in plants,

unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

II.

IT IS FURTHER ORDERED that respondents, directly or through any partnership, corporation, subsidiary, division, or other device, including franchisees, licensees or distributors, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research.

III.

IT IS FURTHER ORDERED that respondents, directly or through any partnership, corporation, subsidiary, division, or other device, including franchisees, licensees or distributors, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the performance, safety, efficacy, or health benefits of any such product or program, unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

IV.

IT IS FURTHER ORDERED that:

A. Respondents shall not disseminate to any distributor any material containing any representations prohibited by this order.

B. Respondents shall not, directly or indirectly, authorize any distributor to make any representations prohibited by this order.

C. Within thirty (60) days after service of this order, respondents shall send by first class mail an exact copy of the notice attached hereto as Attachment A to each distributor with whom respondents have done business since January 1, 1998, to the extent that such distributor is known to respondents through a diligent search of their records, including but not limited to computer files, sales records, and inventory lists. The mailing shall not include any other documents. Respondents shall require each distributor to execute and return the original of the letter as a condition of remaining or once again becoming a distributor of Pain Stops Here! Inc.

D. For a period of three (3) years following service of this order, respondents shall send by first class mail an exact copy of the notice attached hereto as Attachment A to each distributor with whom respondents do business after the date of service of this order who has not previously received the notice. Such notice shall be sent within one (1) week from the first shipment of respondents' product or program to said distributor. The mailing shall not include any other documents. Respondents shall require each distributor to execute and return the original of the letter as a condition of remaining or becoming a distributor of Pain Stops Here! Inc.

E. Respondents shall use reasonable efforts to monitor distributors' advertising and promotional activities. In the event that respondents receive any information that subsequent to receipt of Attachment A pursuant to subparts C and D of this Part, any distributor is using or disseminating any advertisement or promotional material or making any oral statement that contains any representation prohibited by this order, respondents shall immediately terminate said distributor's right to market respondents' product or program and immediately provide, by certified mail, all relevant information, including name, address, and telephone number of the company at issue, the nature of the violation, and any relevant materials used or disseminated, to the Associate Director, Division of Enforcement, Federal Trade Commission, Washington, D.C. 20580.

F. Respondents shall require distributors to submit to respondents all advertising and promotional materials and claims for any product or program covered by this order for review prior to their dissemination and publication. Respondents shall not authorize distributors to disseminate these materials and claims unless they are in compliance with this order.

Respondents may also comply with the obligations set forth above in this subpart by:

(1) disseminating marketing material(s) that contain representations not prohibited by this order to distributors; and

(2) requiring these distributors to submit for review all advertising and promotional materials for a particular product or program covered by this order that contain representations that are not substantially similar to the representations for the same product or program contained in the advertising and promotional material(s) most recently forwarded to the distributors by respondents.

V.

IT IS FURTHER ORDERED that respondent Pain Stops Here! Inc. and its successors and assigns, and respondent Sande R. Caplin shall, for five (5) years after the last correspondence to which they pertain, maintain and upon request make available to the Federal Trade Commission for inspection and copying all notification letters sent to distributors, communications between respondents and distributors referring or relating to the requirements of Part IV, and any other materials created pursuant to Part IV of this order.

VI.

IT IS FURTHER ORDERED that respondent Pain Stops Here! Inc. and its successors and assigns, and respondent Sande R. Caplin 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:

A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

VII.

IT IS FURTHER ORDERED that respondent Pain Stops Here! Inc. and its successors and assigns, and respondent Sande R. Caplin 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. Respondents 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.

VIII.

IT IS FURTHER ORDERED that respondent Pain Stops Here! Inc. and its successors and assigns, and respondent Sande R. Caplin shall notify the Commission at least thirty (30) days prior to any change in the corporation(s) 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 respondents learn less than thirty (30) days prior to the date such action is to take place, respondents 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, Washington, D.C. 20580.

IX.

IT IS FURTHER ORDERED that respondent Sande R. Caplin, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment involved in the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any health-related products or program. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. 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, Washington, D.C. 20580.

X.

IT IS FURTHER ORDERED that respondent Pain Stops Here! Inc. and its successors and assigns, and respondent Sande R. Caplin, 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 it has complied with this order.

XI.

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:

A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and

C. This order if such complaint is filed after the order has terminated pursuant to this Part.

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 , 19

PAIN STOPS HERE! INC.

By:

SANDE R. CAPLIN, President

SANDE R. CAPLIN, individually and as an officer of the corporation

CHRISTA V. A. VECCHI
Counsel for the Federal Trade Commission

APPROVED:

DEAN C. GRAYBILL
Associate Director
Division of Service Industry Practices

JOAN Z. BERNSTEIN
Director
Bureau of Consumer Protection

Attachment A

FIRST CLASS MAIL

[To Be Printed on Pain Stops Here! Inc. letterhead]

[date]

Dear [distributor's name]:

Pain Stops Here! Inc. settled a civil dispute with the Federal Trade Commission (FTC) on ___ involving advertising claims for our magnetic therapy products. As a part of the settlement, we must make sure that you comply with the FTC order.

Our settlement with the FTC prohibits us from making false or unsubstantiated claims for health related products or programs, including, but not limited to, claims that these products or programs are effective in the treatment, cure, or mitigation of any medical condition or disease, such as cancer, liver disease, heart disease, arthritis, bursitis, tendinitis, sciatica, gastric ulcers, pain, diarrhea, among others.

We request your assistance by asking you NOT to use, rely on or distribute any advertising or promotional materials containing unsubstantiated claims and NOT to make unsubstantiated oral representations. Please also notify any of your retail or wholesale customers to do the same. If you or your retail or wholesale customers continue to use such materials or make such representations, we are required by the FTC settlement to stop doing business with you and to inform the FTC of your activities.

In addition, the FTC requires us to ensure that advertising and promotional materials and claims for any product or program covered by this order is in compliance with the FTC settlement requirements. Please see Part IV of the enclosed Agreement Containing Consent Order for detailed information.

Although we do not admit that the FTC's allegations are true, we have agreed to send this letter as a part of our settlement with the FTC.

Please sign, date, and return this letter to Pain Stops Here! Inc. at the above address acknowledging your agreement to the terms set forth herein.

Thank you very much for your assistance,

Sande R. Caplin President
Pain Stops Here! Inc.

ACKNOWLEDGMENT AND AGREEMENT

The undersigned acknowledges receipt of this letter and hereby agrees to its terms and conditions.

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Date

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Signature