Original Marketing, Inc., two of its corporate officers and an affiliated advertising agency, have agreed to pay consumer refunds to settle Federal Trade Commission charges that they made false and unsubstantiated advertising claims that an acupressure device -- called "Acu-Stop 2000" -- designed to be inserted into the ear like a hearing aid, causes weight loss and controls the appetite. In addition to the $50,000 in refunds, the proposed settlement would prohibit the respondents from making performance or benefits claims for any weight-loss or weight-control product or program or acupressure device unless the claims are true and supported by adequate scientific substantiation. Each individual respondent also would be required to post a $300,000 performance bond before marketing any weight-loss or weight-control product or program or acupressure device.
The FTC's complaint detailing the allegations names as respondents: Original Marketing, Inc., doing business as Acu- Stop 2000; Franklin & Joseph, Inc.; Barry A. Weiss; and Roger Franklin. Original Marketing is based in Pompano Beach, Florida, and Franklin & Joseph is based in White Plains, New York.
According to the complaint, the respondents marketed and sold the Acu-Stop 2000 device through advertisements and pro- motional materials. Acu-Stop 2000 sold for about $45, including shipping and handling. The challenged ads and promotional
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materials stated that users of the Acu-Stop 2000 will lose significant weight with "no diets," "no exercise," and "no pills."
The complaint alleges that, through these materials, the respondents represented that use of Acu-Stop 2000 causes sign- ificant weight loss, that it does so without diet or exercise, and that use of the device controls the appetite or eliminates a person's craving for food. These claims are all false and unsub- stantiated, the FTC alleged. The FTC complaint also alleges that the respondents made the false representation that the Acu-Stop 2000 is scientifically proven to cause significant weight loss and control appetite.
Further, according to the complaint, the respondents used testimonials from consumers who made statements such as, "I lost 33 pounds in 30 days." The respondents allegedly represented that the testimonials reflect the typical experience of those who use the device, which, according to the FTC complaint, is not true.
The proposed consent agreement to settle the charges, announced today for public comment, would prohibit the respondents from making any of the allegedly false represen- tations specified in the complaint for the Acu-Stop 2000 or any other acupressure device.
The proposed settlement also would prohibit the respondents from falsely representing that endorsements or testimonials for any weight-loss or weight-control product or program or any acu- pressure device represent the typical or ordinary experience of users. In addition, the consent agreement would prohibit the respondents from misrepresenting the existence or results of any tests or studies in connection with marketing any weight-loss or weight-control product or program, or any acupressure device.
Further, under the proposed consent agreement, the respon- dents would be required to pay refunds to purchasers of the Acu- Stop 2000 who have previously returned it to the respondents, or who return it within 90 days after the order is final. The settlement would require the respondents to deposit $50,000 into an escrow account to be used for certain of the refunds. Under the settlement, the respondents would have to pay all refunds requested within the specified time period, even if they exceed $50,000. Any funds remaining in the escrow account after all refunds are paid would be paid to the United States Treasury.
The order also would require each individual respondent, Weiss and Franklin, to post a $300,000 performance bond, or to pay the same amount into an escrow account, before marketing any weight-loss or weight-control product or program, or any acupressure device.
Finally, the proposed settlement includes various reporting requirements that would assist the FTC in monitoring the respondents' compliance.
The Commission vote to approve the proposed consent agree- ment for public comment was 5-0.
The proposed consent agreement will be published in the Federal Register shortly. It will be subject to public comment for 60 days, after which the Commission will decide whether or not to make it final. Comments should be addressed to the Office of the Secretary, Federal Trade Commission, 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 up to $10,000.
The FTC has developed two free brochures for consumers, titled "Diet Programs" and "The Facts About Weight Loss Products and Programs," which list some sensible weight-loss and maintenance tips.
Copies of those brochures, the complaint and proposed consent agreement, and an analysis of the agreement to assist the public in commenting, are available from the FTC's Public Reference Branch, Room 130, at the above address.
FTC File No. 932 3234)