FTC Awarded Summary Judgment Against Marketers of AbTronic Exercise Belt
United Fitness of America, LLC; eBrands Commerce Group, LLC; Tristar Products, Inc.; and their principals have agreed to pay more than $5 million to settle Federal Trade Commission charges that their Fast Abs belt did not produce “six pack” abs without exercise as they advertised. Under the settlements, the defendants are permanently banned from representing that Fast Abs or any substantially similar device causes users to lose inches or fat; gives users well-defined abdominal muscles; is equivalent to or superior to ordinary abdominal exercise; or helps produce any of those results.
In May 2002, as part of “Project ABSurd,” the FTC filed complaints against three popular electronic abdominal exercise belts – Fast Abs, AbTronic, and AB Energizer. These devices had been heavily advertised in some of the most frequently aired infomercials on national cable channels in late 2001 and early 2002. The FTC complaints alleged that the marketers falsely advertised that their electronic muscle stimulation (EMS) devices would cause fat loss and inch loss, and give users well-defined, “washboard” or “six pack” abdominal muscles without exercising.
The Fast Abs defendants recently agreed to settle the FTC charges. In the AbTronic case, on July 1, 2003, the U.S. District Court for the District of Nevada ordered summary judgment in favor of the FTC and against five of the seven defendants. The AB Energizer case is still in litigation.
Fast Abs Case
The FTC’s May 2002 complaint against Fast Abs named United Fitness of America, LLC and its manager, George Sylva, and Tristar Products, Inc. and its president, Kishore “Keith” Mirchandani. The FTC is amending its complaint to add eBrands Commerce Group, LLC, a Nevada company that is the parent company of United Fitness, and eBrands’ CEO, John William "Jack" Kirby, Jr. The Commission alleges that the two additional defendants were instrumental in creating and executing the Fast Abs advertising campaign.
The FTC’s complaint alleges that the defendants falsely represented that Fast Abs causes fat loss and inch loss, and gives users well-defined, “rock hard” abdominal muscles. The complaint also alleges that the defendants falsely advertised that use of Fast Abs for 10 minutes is equivalent to 600 sit-ups and is more efficient and effective than regular exercise. The complaint further charges that the defendants deceived consumers by claiming that Fast Abs is safe for use over the chest and by failing to disclose that Fast Abs is not safe for all users. Finally, the complaint alleges that certain defendants made false statements about their refund practices and warranty policies.
Under two separate settlements – one for the “UFA defendants” (United Fitness of America, George Sylva, eBrands Commerce Group, and Jack Kirby), and one for the “Tristar defendants” (Tristar Products and Keith Mirchandani) – the defendants will pay a combined sum of more than $5 million. The settlements bar the defendants from making the deceptive claims alleged in the complaint.
Specifically, the settlements permanently ban the defendants from representing that Fast Abs or any substantially similar device causes users to lose inches or fat, gives users well-defined abdominal muscles, is equivalent to or superior to abdominal exercises such as sit-ups and crunches, or contributes to producing any of those results. The orders also prohibit defendants from representing that Fast Abs or any similar device is safe for use across the chest.
The proposed orders also prohibit the defendants from misrepresenting that any product causes users to lose weight, inches, or fat; gives users well-defined abdominal muscles; is equivalent to (or superior to) ordinary abdominal exercise; contributes to producing any of those results; or that any EMS device is safe for use across the chest. The settlements require defendants to warn consumers about the health and safety risks of EMS devices under certain conditions. The settlements also require the defendants to possess competent and reliable scientific evidence to substantiate claims about the health benefits, performance, efficacy, safety, or side effects of any dietary supplement, food, drug, cosmetic, or device. The settlements further prohibit the defendants from making false establishment claims or misrepresenting test or research results.
In addition, the order against the UFA defendants prohibits them from misrepresenting the existence or material terms of any warranty for any product or service, and requires them to provide at least one reasonable means that consumers may use to receive timely refunds.
The settlement requires the UFA defendants to pay a $2.5 million judgment, including a credit of up to $500,000 for any amounts paid to settle a related New Jersey class action. If, however, any UFA defendant made a material misrepresentation or omission about its financial condition, the court may enter a $64.4 million judgment against that UFA defendant.
The settlement order requires the Tristar defendants to pay $2.65 million. If, however, either Tristar defendant made a material misrepresentation or omission about its financial condition, the court may enter a $6.8 million judgment against that defendant.
Finally, the orders contain various recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance. The Commission vote authorizing staff to file an amended complaint and two stipulated final judgments and orders was 5-0. The documents were filed in the U.S. District Court, District of Nevada, on July 21. The proposed settlements are subject to court approval.
On July 1, 2003, the U.S. District Court for the District of Nevada granted the FTC’s motion for partial summary judgment against five of the seven defendants in the FTC’s action against the marketers of the AbTronic, the electrical muscle stimulation device that the defendants claimed would cause users to lose inches and obtain “washboard” abdominal muscles. (FTC v. Hudson Berkley Corp., et al. (CV-S-02-0649-PMP-RJJ) (D. Nev.)). The order permanently enjoins the defendants – Matthias Granic; Bernd Ebert; Hudson Berkley Corporation, based in Las Vegas, Nevada, also doing business as Hudson Berkley, Inc.; Bismarck Labs Corporation, based in Palm Springs, California, also doing business as BLC Bismarck Labs Corporation; and TMI Tricom Marketing, Inc., a Delaware corporation – from claiming: 1) that the AbTronic causes the loss of inches, fat, or cellulite; 2) that the AbTronic causes muscle growth or promotes well-defined abdominal muscles; 3) that use of the AbTronic is equivalent to or superior to abdominal or thigh exercises; 4) that a University of Maryland study cited in the AbTronic infomercial proves that the AbTronic increases abdominal strength better than exercise alone; and 5) that the AbTronic is safe for use over the chest area. The order also prohibits these claims for devices that are substantially similar to the AbTronic. The order holds the defendants jointly and severally liable for $83 million, requires them to repatriate and turn over to the FTC all assets held abroad, and requires all third parties holding funds for defendants to turn those assets over to the FTC. The order also imposes compliance reporting and recordkeeping requirements on defendants for a period of 10 years.
NOTE: The Fast Abs stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated final judgments and orders have the force of law when signed by the judge.
Copies of the Fast Abs stipulated final judgments and orders are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
CONSUMER HOTLINE: Consumer purchasers who want more information should call the FTC’s “Ab Belt Hotline” at 202-326-3343
(Fast Abs: FTC File No. X020056; Civil Action No. CV-S-02-0648-KJD)
(AbTronic: FTC File No. X020063; Civil Action No. CV-S-02-0649-PMP-RJJ)
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