FTC Settlement Calls for the Defendants to Pay Consumer Redress
The marketers of the “Balance Bracelet,” a purported pain relief product, have agreed to pay $400,000 to settle charges that they made deceptive pain relief claims about the bracelet. In May 2004, the Federal Trade Commission filed a complaint in federal district court in Los Angeles, California, against Media Maverick, Inc., and its officers, Mark Jones and Charles Cody, alleging that they violated the FTC Act by deceptively claiming that the Balance Bracelet is a fast-acting, effective treatment for many types of pain. The defendants operated out of San Luis Obispo, California. A class action based on similar allegations was pending in California state court at the time. The settlement announced today is part of a global settlement among the FTC, the defendants, and the class action plaintiffs. The settlement requires the defendants to pay $400,000 in monetary relief to a global settlement fund, a significant portion of which will be used by the FTC for consumer redress.
The Balance Bracelet is a C-shaped metal bracelet that allegedly is electro-polarized by an undisclosed process. The defendants marketed the Balance Bracelet through nationally disseminated infomercials and over the Internet with advertising claims that the Balance Bracelet relieves arthritis pain, joint pain, back pain, and injury-related pain, among other things. Their advertisements also claimed that pain is caused by “excess static electricity” in the body, which comes from an “imbalance of positive and negative energy,” and that the Balance Bracelet returns the body to its natural ionic balance. The Commission alleged that the defendants did not have scientific evidence to support their claims.
The defendants agreed to separate settlements with the FTC and the class action plaintiffs that cross-reference each other in order to achieve a global settlement. The FTC’s order sets forth a $400,000 judgment against the defendants, which has been paid into a global settlement fund pursuant to the terms of the settlement reached in the state class action. A significant portion of the judgment will be distributed back to the FTC for consumer redress. The FTC’s order contains an avalanche clause that requires the defendants to pay $14 million, if the court finds that the defendants misrepresented their financial condition.
The FTC’s order prohibits the defendants from misrepresenting that the Balance Bracelet, or any other pain-relief product, relieves pain and from misrepresenting any such product’s absolute or comparative health benefits, performance, or efficacy. The order also requires the defendants to possess substantiation to support future claims about the absolute or comparative health benefits, performance, or efficacy of any product. In addition, the defendants must recall all packaging and labeling of the Balance Bracelet that includes the prohibited pain-relief claims.
The order also bars the defendants from selling their customer lists and imposes compliance reporting and record-keeping requirements on the defendants to assist the FTC in monitoring the defendants’ compliance.
The Commission vote authorizing staff to file the proposed stipulated final order for permanent injunction was 5-0. The Stipulated Final Order for Permanent Injunction was filed in the U.S. District Court, Central District of California, Western Division, on October 8, 2004, and entered on October 18, 2004.
NOTE: This Stipulated Final Order for Permanent Injunction is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated final order for permanent injunction has the force of law when signed by the judge.
Copies of the Stipulated Final Order for Permanent Injunction 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 in English or Spanish (bilingual counselors are available to take complaints), 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 Matter No. X040048)
(Civil Action No. 04-3395-SVW (Cwx))
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