Company Charged Customers for Free Samples; Made Deceptive Claims for Some Pills
The Federal Trade Commission has filed charges against marketers selling dietary supplements, including Avlimil and Rogisen. According to the complaint, the defendants have been offering consumers “free” samples of their dietary supplements, and then enrolling them in a program that automatically shipped them more pills and billed them for those shipments, even though most consumers never agreed to participate in the program. The FTC also charged that two of the products, which were marketed as treatments for female sexual dysfunction (Avlimil) and night vision problems (Rogisen), do not live up to the advertising claims.
The defendants, Steve Warshak and his companies, have marketed and sold more than a dozen dietary supplements – including Avlimil, Rogisen, and Enzyte – that they claimed offered a variety of health benefits, including treating male and female sexual dysfunction, improving sleep, fighting fatigue, aiding weight loss, and improving skin, night vision, and heart health, among other benefits. They offered “free” samples through radio, television, and print ads and through the Internet, inviting consumers to contact them. The ads have run on cable television networks, including ESPN, Comedy Central, Oxygen, Soap Net, and Lifetime, and in magazines such as Forbes, Playboy, Cosmopolitan, Oprah, Better Homes and Gardens, Psychology Today, and Redbook.
The FTC charged that after consumers provided credit or debit card information to pay the $4.50 shipping and handling fee for the “free” samples, the defendants used that information to bill the consumers for future shipments that they sent automatically. The defendants enrolled consumers in the continuity program and automatically billed them on a recurring basis without obtaining the consumers’ express, informed consent and without disclosing the terms and conditions of the plan, according to the FTC complaint. In addition, they did not obtain written authorization for recurring debits. Then, the defendants often made the process to cancel the shipments very difficult. Consumers attempting to cancel often encountered busy telephone lines, Web sites that did not work, and were put on hold indefinitely. Many consumers who were able to reach a company representative were nevertheless denied refunds.
For one of their dietary supplements, Avlimil, the FTC charged that the defendants made false and unsubstantiated claims. Avlimil was advertised to treat female sexual dysfunction and provide female sexual enhancement. In their advertising, the defendants cited a clinical study that allegedly proved Alvlimil was safe and effective. In fact, according to the complaint, Avlimil’s ingredients differ substantially from the ingredients in the product actually tested in the clinical study featured in the Avlimil advertisements, and defendants made unsubstantiated claims about the product’s efficacy. The FTC also charged that the defendants made unsubstantiated claims that another dietary supplement, Rogisen, improves night vision.
The complaint names Steve Warshak, Berkeley Premium Nutraceuticals, Inc., LifeKey, Inc., Warner Health Care, Inc., and Wagner Nutraceuticals, Inc. as defendants. The complaint also names Carri Warshak, Harriet Warshak, and Paul Kellogg as relief defendants – individuals who are not accused of wrongdoing, but have allegedly received ill-gotten gains and do not have a legitimate claim to them.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed on January 30, 2006, in the U.S. District Court for the Southern District of Ohio.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.
Copies of the complaints 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, DC 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.
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