GoodTimes Entertainment to Pay $100,000 in Civil Penalties and $200,000 in Consumer Redress
GoodTimes Entertainment Limited (GoodTimes) and GT Merchandising & Licensing Corporation (GTM&L), direct marketers headquartered in New York City, have agreed to settle Federal Trade Commission charges that they made unsubstantiated claims for the “Copa Hair System” (Copa), and placed unauthorized charges on credit cards of some purchasers of Copa and of Richard Simmons’ “Blast Off the Pounds” products. The FTC also charged GoodTimes and GTM&L with violating the Commission’s Mail or Telephone Order Merchandise Rule (Mail Order Rule) by failing to ship merchandise within the promised time period. The Department of Justice filed this action at the FTC’s request. In addition to requiring payment of $100,000 in civil penalties and $200,000 in consumer redress, the settlement prohibits GoodTimes and GTM&L from making the challenged claims for the products without adequate substantiation, and from violating the Mail Order Rule.
Copa is a popular hair-straightening product targeted primarily to African-American women and sold mainly through infomercials hosted by dancer Debbie Allen. It is also sold through the defendants’ Web site at www.copahair.com. The FTC alleged that defendants GoodTimes and GTM&L marketed Copa as having unique hair-strengthening properties. Its active ingredient, however, according to the FTC, may weaken hair while it straightens it. Further, through the use of “before and after” pictures, the defendants allegedly implied that consumers would experience hair straightening with just one use. The FTC charges that, instead, multiple applications may be necessary to achieve the depicted results. In addition, the FTC alleges that the defendants did not ship the product within the promised time frames, and enrolled consumers in continuity programs without their consent.
The defendants also marketed Richard Simmons’ “Blast Off The Pounds” weight-loss program consisting of videotapes and “Blast & Go Vitamins,”sold via television and Internet advertising. According to the FTC, the defendants on occasion charged consumers for additional products without their consent.
The consent decree to settle the charges requires that the defendants obtain consumers’ “express informed consent” before they are enrolled in any continuity program. It prohibits the defendants from billing or charging any consumer who has not specifically agreed to purchase the defendants’ products. The settlement also requires the defendants to have competent and reliable scientific evidence for any representations they make regarding the performance, benefits, or efficacy of a drug, food, cosmetic, or dietary supplement. The consent decree prohibits the defendants from, among other things, making unsubstantiated claims regarding Copa’s strengthening properties and requires the defendants affirmatively to disclose, in Copa advertising using “before and after” pictures, the number of applications needed to produce the depicted result.
The Commission vote to file the complaint and consent decree was 5-0. The documents were filed in the United States District Court for the Southern District of New York on August 11, 2003,and the consent decree requires the judge’s approval.
NOTE: Consent decrees are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A consent decree has the force of law when signed by the judge.
Copies of the complaint and consent decree 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.
(FTC File Nos. 012-3032; Civil Action No. 03 CV 6037)
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