MEGA SYSTEMS INTERNATIONAL, INC., a corporation, and JEFFREY SALBERG,

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

MEGA SYSTEMS INTERNATIONAL, INC., a corporation, and JEFFREY SALBERG, individually and as an officer of the corporation.

FILE NO.

AGREEMENT CONTAINING

CONSENT ORDER

The Federal Trade Commission has conducted an investigation of certain acts and practices of Mega Systems International, Inc., a corporation, and Jeffrey Salberg, individually and as an officer of the corporation ("proposed respondents"). Proposed respondents, having been represented by counsel, are willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore,

IT IS HEREBY AGREED by and between Mega Systems International, Inc., by its duly authorized officer, Jeffrey Salberg, individually and as an officer of the corporation, and counsel for the Federal Trade Commission that:

1.a. Proposed respondent Mega Systems International, Inc. is an Indiana corporation with its principal office or place of business at 2025 East 175th Street, Lansing, Illinois 60438.

1.b. Proposed respondent Jeffrey Salberg is an officer of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation. His principal office or place of business is the same as that of Mega Systems International, Inc.

2. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.

3. Proposed respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; and

c. All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding.

5. This agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.

6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondents, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondents by any means specified in Section 4.4 of the Commission's Rules shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order.

7. Proposed respondents have read the draft complaint and consent order. They understand that they may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

"Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.
Unless otherwise specified, "respondents" shall mean Mega Systems International, Inc., corporation, its successors and assigns and its officers; and Jeffrey Salberg, individually and as an officer of the corporation; and each of the above’s agents, representatives and employees.
"Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of Eden’s Secret Nature’s Purifying Product or any substantially similar product in or affecting commerce, shall not represent, in any manner, expressly or by implication, that:

A. Such product causes significant weight loss;

B. Such product prevents or cures illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome;

C. Such product will cleanse the body of harmful toxins; or

D. Such product will purify the body’s blood supply.

For purposes of this Part, “substantially similar product” shall mean any herbal-based product that is substantially similar in ingredients, composition and properties.

II.

A. Such product will stop, prevent, cure, relieve, reverse or reduce hair loss;

B. Such product will promote the growth of hair where hair has already been lost; or

C. Such product is superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss.

For purposes of this Part, “substantially similar product” shall mean any product that is substantially similar in ingredients, composition and properties.

III.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any hair care product or drug, as “drug” is defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not represent, that any product promotes hair growth or prevents hair loss, unless the product is the subject of an approved new drug application for such purpose under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq., provided that, this requirement shall not limit the requirements of Order paragraph II herein.

IV.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of Kevin Trudeau’s Mega Memory System or any substantially similar product in or affecting commerce, shall not make any representation, in any manner, expressly or by implication that such product is effective in causing adults or children with learning disabilities or attention deficit disorder to substantially improve their memory, unless, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. For the purposes of this Part, “substantially similar product” shall mean any product or program that is substantially similar in components, techniques, composition and properties.

VI.

A. Such product reduces an individual’s compulsive desire to eat, leading to significant weight loss;

B. Such product reduces an individual’s compulsive desire to eat, leading to significant weight loss without the need to diet or exercise; or

C. Such product cures addictions and compulsions, including but not limited to, smoking, eating and using alcohol or heroin.

For purposes of this Part, “substantially similar product” shall mean any product or program that is substantially similar in components, techniques, composition and properties.

VII.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of Jeanie Eller’s Action Reading or any other product or program that provides instruction in any aspect of reading in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, concerning:

A. The extent to which individuals who use such product will learn to read, or

B. The success rate of individuals who use such product,

unless, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

VIII.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions or interpretations of any test, study, or research.

IX.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the benefits, performance, or efficacy of such product, unless, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program in or affecting commerce, shall not represent, in any manner, expressly or by implication, that the experience represented by any user testimonial or endorsement of the product represents the typical or ordinary experience of members of the public who use the product, unless:

A. At the time it is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation; or

B. Respondents disclose, clearly and prominently, and in close proximity to the endorsement or testimonial, either:

what the generally expected results would be for users of the product, or
the limited applicability of the endorser's experience to what consumers may generally expect to achieve, that is, that consumers should not expect to experience similar results.

Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or on any label.

XI.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program in or affecting commerce, shall not create, produce, sell, or disseminate:

A. Any advertisement that misrepresents, directly or by implication, that it is not a paid advertisement;

B. Any television commercial or other video advertisement fifteen (15) minutes in length or longer or intended to fill a broadcasting or cablecasting time slot of fifteen (15) minutes in length or longer that does not display visually, clearly and prominently, and for a length of time sufficient for an ordinary consumer to read, within the first thirty (30) seconds of the advertisement and immediately before each presentation of ordering instructions for the product or service, the following disclosure:

“THE PROGRAM YOU ARE WATCHING IS A PAID ADVERTISEMENT FOR [THE PRODUCT OR SERVICE].”

Provided that, for the purposes of this provision, the oral or visual presentation of a telephone number, e-mail address or mailing address for viewers to contact for further information or to place an order for the product or service shall be deemed a presentation of ordering instructions so as to require the display of the disclosure provided herein; or

C. Any radio commercial or other radio advertisement five (5) minutes in length or longer that does not broadcast, clearly and audibly, within the first thirty (30) seconds of the advertisement and immediately before each presentation of ordering instructions for the product or service or periodically through the program, but no more than approximately ten (10) minutes apart, the following disclosure:

“THE PROGRAM YOU ARE LISTENING TO IS A PAID ADVERTISEMENT FOR [THE PRODUCT OR SERVICE].”

Provided that, for the purposes of this provision, the presentation of a telephone number, e-mail address or mailing address for listeners to contact for further information or to place an order for the product or service shall be deemed a presentation of ordering instructions so as to require the announcement of the disclosure provided herein.

Provided further that, for a period of one (1) year from the date of entry of this order, the specific disclosure language of Subparts XI(B) and (C) shall not apply to any commercial or other video or audio advertisement produced prior to the date of entry of this order that contains a clear and prominent disclosure of the fact that the program is a paid advertisement or presentation within the first thirty (30) seconds of the commercial and immediately before each presentation of ordering instructions for the product or program that includes one or more of the following disclosures:

"The following is a paid commercial program brought to you by Mega Systems International, Inc."
"This is a paid advertisement for [the product or program]."
"The preceding has been a paid commercial program brought to you by Mega Systems International, Inc."

XII.

Nothing in this order shall prohibit respondents from making any representation for any drug that is permitted in labeling for such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration.

XIII.

IT IS FURTHER ORDERED that:

A. Respondent Mega Systems International, Inc., its successors and assigns, and respondent Jeffrey Salberg, shall pay to the Federal Trade Commission by electronic funds transfer the sum of five hundred thousand dollars ($500,000) no later than fifteen (15) days after the date of service of this order. In the event of any default on any obligation to make payment under this Part, interest, computed pursuant to 28 U.S.C. §1961(a) shall accrue from the date of default to the date of payment. In the event of default, respondent Mega System, Inc., its successors and assigns, and respondent Jeffrey Salberg, shall be jointly and severally liable.

B. The funds paid by respondent Mega Systems International, Inc., its successors and assigns, and respondent Jeffrey Salberg, pursuant to subpart A above shall be paid into a redress fund administered by the FTC and shall be used to provide direct redress to purchasers of certain Mega Systems International, Inc.’s products. Payment to such persons represents redress and is intended to be compensatory in nature, and no portion of such payment shall be deemed a payment of any fine, penalty, or punitive assessment. If the FTC determines, in its sole discretion, that redress to purchasers is wholly or partially impracticable, any funds not so used shall be paid to the United States Treasury. Respondent Mega Systems International, Inc., its successors and assigns, and respondent Jeffrey Salberg, shall be notified as to how the funds are disbursed, but shall have no right to contest the manner of distribution chosen by the Commission.

XIV.

IT IS FURTHER ORDERED that respondent Mega Systems International, Inc., and its successors and assigns, and respondent Jeffrey Salberg shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

XV.

IT IS FURTHER ORDERED that respondent Mega Systems International, Inc., and its successors and assigns, and respondent Jeffrey Salberg shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and shall deliver a copy of this order or a summary of this order in the form attached hereto as Exhibit A to all other current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order or Exhibit A. Exhibit A shall be printed in its entirety in an easily readable font in at least 12 point dark-colored type against a contrasting background and shall contain no additional language. Bracketed language in Exhibit A may be included at Mega Systems’ option but is not required. Respondents shall deliver this order or Exhibit A to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

XVI.

IT IS FURTHER ORDERED that respondent Mega Systems International, Inc. and its successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

XVII.

IT IS FURTHER ORDERED that respondent Jeffrey Salberg, for a period of five (5) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

XVIII.

IT IS FURTHER ORDERED that respondent Mega Systems International, Inc., and its successors and assigns, and respondent Jeffrey Salberg shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

XIX.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and

C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

Signed this day of _____, 1998

MEGA SYSTEMS INTERNATIONAL, INC.

By:

JEFFREY SALBERG
President

JEFFREY SALBERG,
individually and as an officer of the corporation

BARRY J. CUTLER
McCutchen, Doyle, Brown & Enersen
Counsel for respondents

RUSSELL W. DAMTOFT
Counsel for the Federal Trade Commission

MARY ELIZABETH TORTORICE
Counsel for the Federal Trade Commission

CHARULATA B. PAGAR
Counsel for the Federal Trade Commission

THERESA M. MCGREW
Counsel for the Federal Trade Commission

APPROVED:

C. STEVEN BAKER
Director
Chicago Regional Office

Exhibit A

NOTICE TO MSI, INC’S EMPLOYEES AND AGENTS

IN THE SALE OF MSI PRODUCTS

MSI has signed an agreement with the Federal Trade Commission that contains rules and standards about the marketing of products to consumers. With MSI’s consent, the FTC has issued an order that gives that agreement the force of law. Of particular importance to you are things that can be said or not said to consumers about any product or service. This document contains several specific parts of the agreement and order that persons who deal directly with customers must know. It is important that you read it and understand it. When you sign it, you will be certifying not only your understanding, but your agreement to follow the requirements.

[It is important that MSI follow the agreement carefully to avoid future legal disputes, and you can be sure that we will make every effort to do so. This document is a way that we make sure that you also understand how important it is to follow it and that MSI takes the agreement and other aspects of dealing fairly with consumers very seriously. You could be disciplined for violations or even terminated for the most serious ones. However, this process is not intended to put a burden on you or scare you. To the contrary, MSI puts a lot of effort into making sure its telemarketing scripts are legal and, if you follow them, you will have no problem. However, you should not make claims beyond the script that you are not totally sure of and, if you do not know the answer to a customer's question, you should simply say so, or seek help from a supervisor, but you should not just make one up.]

The following are excerpts from the order that we have promised to follow. [If you have any questions about this form, or the agreement terms, or what they mean, please ask (your supervisor or other person).] Items where numbers are skipped do not apply to you.

I. In connection with the sale of any herbal-based colon or body cleansing product, MSI shall not represent, in any manner, expressly or by implication, that:

A. Such product causes significant weight loss;

B. Such product prevents or cures illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome;

C. Such product will cleanse the body of harmful toxins; or

D. Such product will purify the body’s blood supply.

II. In connection with the sale any hair growth product, MSI shall not represent, in any manner, expressly or by implication, that:

A. Such product will stop, prevent, cure, relieve, reverse or reduce hair loss;

B. Such product will promote the growth of hair where hair has already been lost; or

C. Such product is superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss.

III. In connection with the sale of any hair care product or drug, MSI shall not represent, that any product promotes hair growth or prevents hair loss, unless the product has been approved by the Food and Drug Administration.

IV. In connection with the sale of Kevin Trudeau’s Mega Memory System or any substantially similar memory enhancement product, MSI shall not represent, in any manner, expressly or by implication, that such product will enable users to achieve a photographic memory.

V. In connection with the sale of Kevin Trudeau’s Mega Memory System or any substantially similar memory enhancement product, MSI shall not make any representation, in any manner, expressly or by implication that such product is effective in causing adults or children with learning disabilities or attention deficit disorder to substantially improve their memory, unless MSI possesses and relies upon competent and reliable evidence that substantiates the representation.

VI. In connection with the sale of any addiction cure product, MSI shall not represent, in any manner, expressly or by implication, that:

A. Such product reduces an individual’s compulsive desire to eat, leading to significant weight loss;

B. Such product reduces an individual’s compulsive desire to eat, leading to significant weight loss without the need to diet or exercise; or

C. Such product cures addictions and compulsions, including but not limited to, smoking, eating and using alcohol or heroin.

VII. In connection with the sale of Jeanie Eller Action Reading or any other product or program that provides instruction in any aspect of reading, MSI shall not make any representation, in any manner, expressly or by implication, concerning:

A. The extent to which individuals who use such product will learn to read, or

B. The success rate of individuals who use such product,

unless, at the time the representation is made, MSI possesses and relies upon competent and reliable evidence that substantiates the representation.

VIII.In connection with the sale of any product or program, MSI shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions or interpretations of any test, study, or research.

IX. In connection with the sale of any product or program, MSI shall not make any representation, in any manner, expressly or by implication, about the benefits, performance, or efficacy of such product, unless, at the time the representation is made, MSI possesses and relies upon competent and reliable evidence that substantiates the representation.

X. In connection with the sale of any product or program, MSI shall not represent, in any manner, expressly or by implication, that the experience represented by any user testimonial or endorsement of the product represents the typical or ordinary experience of members of the public who use the product, unless:

A. At the time it is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation; or

B. Respondents disclose, clearly and prominently, and in close proximity to the endorsement or testimonial, either:

what the generally expected results would be for users of the product, or

the limited applicability of the endorser's experience to what consumers may generally expect to achieve, that is, that consumers should not expect to experience similar results.

Nothing contrary to the disclosure shall be stated.

On this ___day of _________,_____, I have read and understood this document and agree to follow it. [I am signing this voluntarily and understand that I could be disciplined, even terminated, for serious violations.]

________Employee__________

[________Witness_______________]

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

MEGA SYSTEMS INTERNATIONAL, INC., a corporation, and JEFFREY SALBERG, individually and as an officer of the corporation.

DOCKET NO.

COMPLAINT

The Federal Trade Commission, having reason to believe that Mega Systems International, Inc., a corporation, and Jeffrey Salberg, individually and as an officer of the corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Mega Systems International, Inc. is an Indiana corporation with its principal office or place of business at 2025 East 175th Street, Lansing, Illinois 60438.

2. Respondent Jeffrey Salberg is an officer of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of Mega Systems International, Inc.

3. Respondents have advertised, offered for sale, sold, and distributed products to the public, including but not limited to, Eden’s Secret Nature’s Purifying Product, Sable Hair Farming System, Kevin Trudeau’s Mega Memory System, Dr. Callahan’s Addiction Breaking System, and Jeanie Eller’s Action Reading.

4. Eden’s Secret Nature’s Purifying Product and Sable Hair Farming System are "drugs," within the meaning of Sections 12 and 15 of the Federal Trade Commission Act.

5. Respondents’ advertisements include, but are not limited to, program-length radio and television commercials which run for 30 minutes or less and fit within normal radio and television broadcasting time slots. Respondents’ television commercials were and are broadcast on network, independent and cable television stations throughout the United States. Several of the television commercials are identified as “The Danny Bonaduce Show” and “A Closer Look.” The Danny Bonaduce Show purports to be a television talk show similar to “Late Night with David Letterman.” The set consists of a band playing off to the side, a live audience, and a back drop of city skyline silhouette. Danny Bonaduce performs a monologue before interviewing a guest who is actually a promoter of a Mega Systems, Inc. product. A Closer Look purports to be a television talk show similar to “Larry King Live.” The set consists of a desk similar to the desk used in “Larry King Live.” Respondents’ radio commercials were and are broadcast on network and independent radio stations throughout the United States. Kevin Trudeau acts as the host or guest in most, but not all, of respondents’ radio and television commercials.

6. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

Eden’s Secret Nature’s Purifying Product

7. Respondents have disseminated or have caused to be disseminated advertisements for Eden’s Secret Nature’s Purifying Product, including but not necessarily limited to the attached Exhibits A and B. These advertisements contain the following statements:

A. Trudeau: “That cleansing my body has had a dramatic impact on my body and life. I feel brighter and more alert for longer periods of time than I have in years, and there’s no question that my immune system has dramatically improved.”

*****

Wright:“...a body that is cleansed and purified of toxic wast matters, colon waste, fatty arterial deposits, the ph balance of the blood’s better, the microflouron of the colon’s better, you’re simply enhancing the overall integrity of your body.”

*****

Trudeau: "... I honestly believe that people try, they can’t lose weight. And it is really amazing because I have friends that I see what they eat, and they try to exercise. They try to, and they still can't lose the weight."

Wright:"That's right."

Trudeau: "What's the problem here?"

Wright:"Well, step number one is if you don't cleanse the system out, your body is constantly hungry. Why? It is not getting nutrients. It's not getting fed. The colon wall gets lined with some sort of a type of, it’s old fecal matter, it’s old gluey plaque like substance. The wall of the colon gets compromised in such manner that a lot of the nutrients that you’re eating, the foods that you’re eating don’t transfer."

*****

Wright:“So what we’re doing is cleaning out the digestive tract, the colon and aiming at cleaning and purifying the blood all at the same time. So between the two of these, what we’re initiating, Kevin, is a complete biological interwashing. When you assist the body’s own eliminative channels, help open them up --

Trudeau: “Right.”

Wright:“The body has an ability to restore itself. The integrity of the cells themselves on a cellular level becomes higher because there’s not a lot of junk in there. There’s not a lot of plaque in the way. They’re opening up the transfer of nutrients and oxygen so your cells can live again.”

*****

Trudeau: "And one of the things that everybody said, I asked them, I said what is your weight situation, and everyone said they have lost weight."

Wright: "Right."

Trudeau: "They're losing pounds."

Wright: "Right."

Trudeau: “Now this is obviously, we are not claiming to lose weight with the product, but this is cleansing, something is happening here.”

*****

Wright:“Your blood stream’s impure, the PH balance is off, and it’s exactly like a girl who has PMS. The blood stream gets impure before her cycle, it’s reabsorbed back into the blood stream, she’s experiencing, she goes AHHH!!! She goes crazy, just like my wife used to until we founded this formula. This is the same kind of experience. Your stress level gets nuts.”

Trudeau: “So are you telling me that people that have -- women that have a bad PMS syndrome, if they started cleansing their system, that could perhaps be relieved in some -- to some degree?” (Exhibit A; Radio Infomercial Script.)

B. This 100% natural, herbal purifying program is designed to cleanse your body quickly and easily of accumulated, harmful toxins. I guarantee you’ll feel energized and revitalized! And many experts now believe that detoxification may even help you avoid premature aging and ill health.

*****

Worse yet, these man-made toxins eventually overwhelm our bodies’ natural cleansing abilities and accumulate in our cells and tissues. As recent medical research indicates, the waste that remains is linked to declining appearance, premature aging and ill health.

Your body’s cry for help

Although this news may come as a surprise to you, your body has probably been trying to tell you for years that it’s “toxic”! Just a few symptoms you may experience include fatigue, indigestion, headaches, being bloated or overweight, irritability, irregularity, depression, arthritis, insomnia and immune suppression. If you suffer from any or all of these conditions, it’s time to listen to your body now. . . before your health suffers further.

The Nature’s Pure Body Program helps your body purify itself, quickly and easily

My exclusive purifying program gives your body the added help it needs to clear out the toxins that rob you of your energy and good health. (Exhibit B; Promotional Brochure.)

8. Through the means described in Paragraph 7, respondents have represented, expressly or by implication, that:

A. Eden's Secret Nature’s Purifying Product causes significant weight loss.

B. Eden’s Secret Nature’s Purifying Product will prevent or cure illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome.

C. Eden’s Secret Nature’s Purifying Product will cleanse the body of harmful toxins.

D. Eden’s Secret Nature’s Purifying Product will purify the body’s blood supply.

9. In truth and in fact:

A. Eden's Secret Nature’s Purifying Product will not cause significant weight loss.

B. Eden’s Secret Nature’s Purifying Product will not prevent or cure illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome.

C. Eden’s Secret Nature’s Purifying Product will not cleanse the body of harmful toxins.

D. Eden’s Secret Nature’s Purifying Product will not purify the body’s blood supply.

Therefore, the representations set forth in Paragraph 8 were, and are, false or misleading.

10. Through the means described in Paragraph 7, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 8, at the time the representations were made.

11. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 8, at the time the representations were made. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

Sable Hair Farming System

12. Respondents have disseminated or have caused to be disseminated advertisements for Sable Hair Farming System, including but not necessarily limited to the attached Exhibit C. This advertisement contains the following statements:

Sabal: “So I found a combination of herbs that, when mixed with cleansers like witch hazels and alcohols, can deep clean underneath the surface of the scalp, and clean out all the debris that prevents the hair or blocks the hair from reaching the surface.”

*****

"And the amazing thing that was happening is that after we cleaned, as we looked at the scalp, hair sprouted out."

*****

"[T]he hair that sprouts out measures five years, for instance, that it's been growing under the scalp, from the blood, from the protein in the blood."

*****

“[W]e had live subjects tested in a laboratory here in south Florida, and they counted the hairs as they came in on every test subject every day that they used the product.”

*****

"So we have a wonderful product that cleans the scalp. And if you learn to do that, first of all, you'll never lose your hair."

*****

“I should be in most of the major medical journals in the world in the next few months, which will finally end baldness in the human race. And I’m very proud of that. A hundred percent on my testing. And that will be announced, I would say, before the end of the June.”

*****

“And everyone should have all their hair back in six months to a year, permanently, painlessly, and never have to purchase anything again.”

*****

Trudeau: “And you’re saying that if the follicles were cleaned properly --”

Sabal: “They would never lose their hair”

*****

Sabal: "[W]e could actually end hair loss in the human race. No one would become bald any more."

*****

“Well, the doctors that have tested with us, that amazed them. That was the very first thing that amazed them. They said they saw more in five minutes with our product than they did with any other product they’ve ever tested. And that includes the Rogaine and Minoxidil products.”

*****

“You don’t ever have to be bald any more. You don’t ever have to go bald, if you’re a young person who’s just starting to lose their hair. And there’s a lot of help that we can give you. So I hope you do give us a call.” (Exhibit C; Radio Infomercial Script.)

13. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that:

A. Sable Hair Farming System will stop, prevent, cure, relieve, reverse or reduce hair loss.

B. Sable Hair Farming System will promote the growth of hair where hair has already been lost.

C. Sable Hair Farming System is superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss.

14. In truth and in fact:

A. Sable Hair Farming System will not stop, prevent, cure, relieve, reverse or reduce hair loss.

B. Sable Hair Farming System will not promote the growth of hair where hair has already been lost.

C. Sable Hair Farming System is not superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss.

Therefore, the representations set forth in Paragraph 13 were, and are, false or misleading.

15. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 13, at the time the representations were made.

16. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 13, at the time the representations were made. Therefore, the representation set forth in Paragraph 15 was, and is, false or misleading.

17. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that scientific studies demonstrate that Sable Hair Farming System is effective in stopping hair loss and promoting hair growth.

18. In truth and in fact, scientific studies do not demonstrate that Sable Hair Farming System is effective in stopping hair loss and promoting hair growth. Therefore, the representation set forth in Paragraph 17 was, and is, false or misleading.

Kevin Trudeau’s Mega Memory System

19. Respondents have disseminated or have caused to be disseminated advertisements for Kevin Trudeau’s Mega Memory System, including but not necessarily limited to the attached Exhibits D through F. These advertisements contain the following statements:

A. Trudeau: "[W]e teach people all around the world how to release the photographic memory that people have right now, or instant recall memory.”

*****

“All these little absent minded things we help people when we develop and release the photographic memory that they have.”

*****

“Every single person has a photographic memory right now lying dormant. It’s an ability that everyone has. You, see, you remember everything that you see, hear and think about. If it comes through the senses it is remembered. The problem though is recalling information.”

*****

“Yeah, that’s one of the things about Mega Memory that’s very unique is that fact that it only takes only a few hours to learn the technology and when you release that photographic memory ....”

*****

“We took an entire seventh grade class in the beginning of last school year. They went through the Mega Memory system, just took a few days, a couple of hours, very easy and at the end of the school year they had a big problem on their hands. Eight months ahead of their school curriculum, lowest grade point average A minus, and they test the vocabulary levels of the seventh graders and they found to be those of sophomores in college because they could remember all the words and definitions. I can't wait until they take their SAT's. They were three years ahead in Spanish, because foreign languages, if you ever wanna learn foreign languages, it has a lot to do with memory, you know."

*****

"I then met a fellow who did a research report in 1975 at the Oklahoma School for the Blind in Muskogee, Oklahoma, V. R. Carter was the Superintendent back then, and he took thirty-five blind children and he improved their memory. These kids were blind from birth, by the way, and he improved, in just five days, fifteen percent recall ability to ninety percent in just one week. .... They were so impressed that they tested the kids six and eight months later to see if it stuck and most of the kids improved to ninety-five and ninety-eight percent recall. So, it stuck. We duplicated the results with retarded kids with IQ's of only fifty and sixty and the results were almost identical, lower memory in the beginning, dramatic improvement in the nineties just a week later and a year later in testing almost a hundred percent recall ability with slow, retarded kids. Obviously we know at this point if we can teach blind and retarded kids it had to be an ability, a powerful memory, that everyone had. So I took that raw data and put together, invented, if you will, over the next year the entire Mega Memory system that we have today, founded the institute and just in the last couple of years over two million people now, uh, Danny, have gone through the Mega Memory home study course to improve their own memory."

*****

"...ADD and we’re getting letters and calls more on this subject than anything else and there are millions of people, children and adults who are afflicted with this problem, and when I started looking at that because it has a lot to do with memory, attention span, .... So I started doing the research and we tested five thousand kids with ADD. .... there’s a lot of controversy ?bout this, by the way because the drug Ritalin is the drug of choice to give. And we don’t agree with that as an option, but uh we think through dietary change and we discuss this in Mega Memory, some of the things and options that people can take to dramatically improve.” (Exhibit D; Television Infomercial Script.)

B. Help Sheet - Overcoming Common Objections

4.) Can this work for people with learning disabilities, ADD, dyslexia, or head injuries?

These techniques were perfected with blind and retarded children back in the early 70's. Through research, we’ve found that everyone can improve their memory with this program (except Alzheimer’s patients). (Exhibit E; Telephone Sales Script.)

C. Kevin Trudeau’s breakthrough techniques were developed while working with blind and mentally handicapped students. Their recall ability increased from 15% to 90% in just 5 days! Because these methods have been proven under the most difficult circumstances, they’re guaranteed to work for you! Kevin’s breakthrough techniques that you’ll learn in this course allow you to release your own perfect photographic memory ... effortlessly. (Exhibit F; Promotional Brochure.)

20. Through the means described in Paragraph 19, respondents have represented, expressly or by implication, that Kevin Trudeau’s Mega Memory System will enable users to achieve a photographic memory.

21. In truth and in fact, Kevin Trudeau’s Mega Memory System will not enable users to achieve a photographic memory. In fact, Kevin Trudeau’s Mega Memory System simply consists of standard memory techniques. Therefore, the representation set forth in Paragraph 20 was, and is, false or misleading.

22. Through the means described in Paragraph 19, respondents have represented, expressly or by implication, that Kevin Trudeau’s Mega Memory System is effective in causing adults or children with learning disabilities or attention deficit disorder to substantially improve their memory.

23. Through the means described in Paragraph 19, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraphs 20 and 22, at the time the representations were made.

24. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraphs 20 and 22, at the time the representations were made. Therefore, the representation set forth in Paragraph 23 was, and is, false or misleading.

25. Through the means described in Paragraph 19, respondents have represented, expressly or by implication, that:

A. Scientific studies of Kevin Trudeau’s Mega Memory System on seventh-grade students demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their academic performance and grades.

B. Scientific studies of Kevin Trudeau’s Mega Memory System on blind children demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability to a level of 95% to 98%.

C. Scientific studies of Kevin Trudeau’s Mega Memory System on children with IQ’s of fifty to sixty demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability to a level of almost 100%.

D. Scientific studies of Kevin Trudeau’s Mega Memory System on children with attention deficit disorder demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their memory.

26. In truth and in fact:

A. Scientific studies of Kevin Trudeau’s Mega Memory System on seventh-grade students do not demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their academic performance and grades.

B. Scientific studies of Kevin Trudeau’s Mega Memory System on blind children do not demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability by 95% to 98%.

C. Scientific studies of Kevin Trudeau’s Mega Memory System on children with IQ’s of fifty to sixty do not demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability by almost 100%.

D. Scientific studies of Kevin Trudeau’s Mega Memory System on children with Attention Deficit Disorder do not demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their memory.

Therefore, the representations set forth in Paragraph 25 were, and are, false or misleading.

Dr. Callahan’s Addiction Breaking System

27. Respondents have disseminated or have caused to be disseminated advertisements for Dr. Callahan’s Addiction Breaking System, including but not necessarily limited to the attached Exhibits G through I. These advertisements contain the following statements:

A. Trudeau: "He [Dr. Callahan] has been a best-selling author whose revolutionary treatment for losing weight and quitting smoking takes less than three minutes with 95 percent success. If you smoke and want to quit, or if you want to lose weight once and for all, today’s show could be an answer to your prayers.”

*****

"[T]he treatments that you discovered, that you invented get rid of addictions like food addictions so people can lose weight easily without trying to diet. They can just lose the weight because they reduce the urge to overeat. You can reduce smoking, alcoholism, any type of compulsion, depression, jealousy.

*****

Callahan: “It’s revolutionary because it works with a high success rate that’s never before been possible.”

*****

Trudeau: “[I]f you have any addiction, whether it be for food, if you’re overweight, if you have a smoking addiction, if your children are addicted to drugs -- any compulsion, anything whatsoever, we recommend you call the 800 number...”

*****

Callahan: “What we mean is that their addictive urge, that uncontrollable urge is gone, completely gone, and they feel fine.”

*****

“And when we eliminate the anxiety, they don’t need the heroin; they don’t need the alcohol. The withdrawal is gone.” (Exhibit G; Television Infomercial Script.)

B. Trudeau: “We’re going to be sharing Dr. Callahan’s revolutionary breakthrough that he had discovered while studying quantum physics. Dr. Callahan came up with a breakthrough that in 60 seconds can eliminate your addictive urge to overeat, to smoke cigarettes, to do any compulsion, any type of addicted behavior, whether it be alcohol, drugs, cigarettes, food, maybe picking your thumb, any type of compulsive behavior, and eliminate all the stress and anxiety in your body. Now this technique will take 60 seconds to apply and works in virtually 100 percent of the time.”

*****

“Dr. Callahan, while studying quantum physics, figured out that he has this technique that in 60 seconds you can break up the stress and anxiety in your body and eliminate totally the addictive urge. Now what will that mean to you? That means you can lose weight easily, effortlessly, because you don’t have any urge to overeat when you’re not hungry. The urge is gone.”

*****

“While I was on another time, a gal called up on the phone. She said, “Kevin, I saw you about a month ago and I bought your program.” This is right on tape. We have this on film. Right on national TV. She said, “I want you to know, I got it a month ago and here’s what happened. I was addicted because of food. I would overeat when I wasn’t hungry. So late at night when I wanted to eat food, I used the technique. It took only 60 seconds. I just used it one time. I relaxed, I felt fantastic. I slept better than I have in years because all the stress was gone.” She goes, “I was just feeling great and the urge was gone. I didn’t eat the food. I didn’t want it.” She goes, “Since then, I’ve lost over 10 pounds, but I’m not trying to lose weight.” She said, “I eat ice cream, I eat cookies, I eat cake, I eat everything I want. But I’m just losing weight.” And I said, “Are you trying to lose weight.” And she says, ?No.’”

*****

“The best thing about this technique if you’re overweight, you can eat everything you want. You can eat pizza, you can eat ice cream, you can eat anything and everything you want. You’re just not going to want it. The urge is going to be gone. The uncontrollable urge is gone.”

*****

“When I was on Value Vision, the home shopping club, a gal called up and said she does work in an alcohol and drug treatment center with alcoholics, heroin addicts, cocaine addicts. That’s how Dr. Callahan actually started this work. He worked with some of these major additions. Here’s the interesting thing. Whether your addiction is cocaine, heroin, alcohol or pizza or chocolate or cigarettes, it’s all caused by the exact same thing. The stress and anxiety energy field. She told me that she’s getting this program and for the first time in her life she can actually help people, because in 60 seconds she knocks out the urge, the uncontrollable urge.”

*****

“Another gal called up on the same day on Value Vision and said this. She brought the program 30 days ago. She had lost weight -- and after she used it once, she lost weight. But her husband was an alcoholic. He used the program. He hasn’t had a drink in 30 days. Why? Because it knocked out the addictive urge. Dr. Callahan was in a grocery store in California where he lives. A guy ran up to him and said, “Dr. Callahan?” He said, “Yes.” He said, “I saw you on TV three years ago when you were talking about this technique, and I got your book where it describes it.” He said, ?I was an alcoholic my whole life, over 28 years. I used your technique and I haven’t had a drink, Doctor, in three years, and I feel so wonderful.’” (Exhibit H; Television Infomercial Script.)

C. ... by placing your order today you’re taking the most important step to eliminate your addiction(s) for the rest of your life.

*****

Dr. Callahan’s addiction breaking system is a video taped program that will instantly teach you how to break any addictive urge you want to eliminate by using a simple and easy to use 15 minute technique.

*****

BENEFITS TO YOUR CUSTOMER:

QUIT SMOKING BREAK ADDICTIVE URGES LOSE WEIGHT

(Exhibit I; Telephone Sales Script.)

28. Through the means described in Paragraph 27, respondents have represented, expressly or by implication, that for all or virtually all users:

A. Dr. Callahan’s Addiction Breaking System reduces an individual’s compulsive desire to eat, leading to significant weight loss.

B. Dr. Callahan’s Addiction Breaking System reduces an individual’s compulsive desire to eat, leading to significant weight loss without the need to diet or exercise.

C. Dr. Callahan’s Addiction Breaking System cures addictions and compulsions, including but not limited to, smoking, eating, and using alcohol or heroin.

29. In truth and in fact:

A. Dr. Callahan’s Addiction Breaking System does not reduce an individual’s compulsive desire to eat, and as such, Dr. Callahan’s Addiction Breaking System does not lead to significant weight loss.

B. Dr. Callahan’s Addiction Breaking System does not reduce an individual’s compulsive desire to eat, and as such, Dr. Callahan’s Addiction Breaking System does not lead to significant weight loss without the need to diet or exercise.

C. Dr. Callahan’s Addiction Breaking System does not cure addictions and compulsions, including but not limited to, smoking, eating and using alcohol or heroin. Indeed, Dr. Callahan’s Addiction Breaking System simply consists of a video tape in which Dr. Callahan demonstrates a series of tapping one’s face, chest, and hand, rolling one’s eyes, and humming.

Therefore, the representations set forth in Paragraph 28 were, and are, false or misleading.

30. Through the means described in Paragraph 27, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 28, at the time the representations were made.

31. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 28, at the time the representations were made. Therefore, the representation set forth in Paragraph 30 was, and is, false or misleading.

32. Through the means described in Paragraph 27, respondents have represented, expressly or by implication, that testimonials with regard to consumers’ use of Dr. Callahan’s Addiction Breaking System reflect the typical or ordinary experience of members of the public who use the product.

33. In truth and in fact, testimonials with regard to consumers’ use of Dr. Callahan’s Addiction Breaking System do not reflect the typical or ordinary experience of members of the public who use the product. Therefore, the representation set forth in Paragraph 32 was, and is, false or misleading.

Jeanie Eller’s Action Reading

34. Respondents have disseminated or have caused to be disseminated advertisements for Jeanie Eller’s Action Reading, including but not necessarily limited to the attached Exhibits J and K. These advertisements contain the following statements:

A. Trudeau: “According to my guest, Jennie Eller, every single person -- if they can see, hear and talk -- can learn to read, guaranteed. She also claims that her revolutionary approach to teaching reading is easy, quick and works 100 percent of the time.”

*****

Eller: “That is the program I took back. We started using it in the Anchorage School District. Every child that went through it learned to read.”

*****

“And when you go through this program, you start at the beginning and you take every logical step right through it. And when you come out, you are a fluent, independent reader. And I’ve put my 30 years of teaching credibility on the line. It absolutely is guaranteed to work.”

*****

“[B]ut any child that you show them how that code works, you can’t stop them from reading. They crack that code. And that code is the key.”

*****

Trudeau: “But you’re talking about this secret code. The government says -- you were mentioning to me -- that teaches (sic) certain kids just can’t read, and you’re saying that’s hogwash.”

Eller: “It is. It’s absolute hogwash. I’ve been teaching for 30 years and I’ve never had anyone not learn to read.”

Trudeau: “Because I just (sic) watching a show the other day on -- on -- on TV and they were saying, this guy’s trying to read. He’s tried -- he tried a phonics program himself. He -- he still can’t read. He’s frustrated. He thinks he’s dumb. And they said -- they made the statement, the only way he can read is by hard, hard work, and he still may never learn how to read.”

Eller: “No, that is absolutely not true, and I hope he’s watching this show, because if he’ll get this program, I guarantee you he’ll learn to read.”

*****

“[I]f you tell them what the words are, they know those words. They speak those words. The people that I taught to read on the Oprah Show, as soon as they could decode, decipher the newspaper, they knew those words. They were articulate people. They spoke the language. They understood the language. They just could not decipher the language.”

*****

“Absolutely, because it not only teaches the decoding, the phonics part, it teaches comprehension.” (Exhibit J; Television Infomercial Script.)

B. For Adults

****

Easier and quicker for adults to learn, because most already know the vocabulary - they just need to learn how to “decode” written words and sentences.

*****

1. How can it improve comprehension?

Even though we’ve heard a lot of words before in conversation, a person who can’t read wouldn’t recognize them. Action Reading teaches you how to read words for their meaning. (It’s like putting a persons (sic) face to their name, when you have only spoken to them on the telephone.)

*****

6. Does Jeanie guarantee that she can teach anyone to read?

Action Reading can teach anyone who can see, hear, think and talk to read... (Exhibit K; Telephone Sales Script.)

35. Through the means described in Paragraph 34, respondents have represented, expressly or by implication, that Jeanie Eller’s Action Reading is successful in teaching reading 100% of the time.

36. Through the means described in Paragraph 34, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representation set forth in Paragraph 35, at the time the representation was made.

37. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representation set forth in Paragraph 35, at the time the representation was made. Therefore, the representation set forth in Paragraph 36 was, and is, false or misleading.

Deceptive Format

38. Through the advertisement and dissemination of respondents’ television infomercials including, but not limited to, “The Danny Bonaduce Show” (Exhibit D) and “A Closer Look” (Exhibits G, H, and J), and radio infomercials (Exhibits A and C), respondents have represented, directly or by implication, that these commercials are independent television and radio programs and not paid commercial advertising.

39. In truth and in fact, respondents’ television and radio infomercials are not independent television and radio programs and are paid commercial advertising. Therefore, the representation set forth in Paragraph 38 was, and is, false or misleading.

40. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices, and the making of false advertisements, in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this day of , 199 , has issued this complaint against respondents.

By the Commission.

Donald S. Clark
Secretary

SEAL

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to final approval, to a proposed consent order from respondents Mega Systems International, Inc. and Jeffrey Salberg.

The proposed consent order has been placed on the public record for sixty (60) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement and take other appropriate action or make final the agreement's proposed order.

This matter concerns advertisements, including but not limited to infomercials, for five Mega Systems International products: Eden’s Secret Nature’s Purifying Product, Sable Hair Farming System, Kevin Trudeau’s Mega Memory System, Dr. Callahan’s Addiction Breaking System, and Jeanie Eller’s Action Reading. This matter also concerns the deceptive format of the infomercials.

The Commission's complaint charges that respondents made false and unsubstantiated claims that Eden's Secret Nature’s Purifying Product (1) causes significant weight loss, (2) will prevent or cure illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome, (3) will cleanse the body of harmful toxins, and (4) will purify the body’s blood supply.

The Commission’s complaint also charges that respondents made false and unsubstantiated claims that Sable Hair Farming System (1) will stop, prevent, cure, relieve, reverse or reduce hair loss, (2) will promote the growth of hair where hair has already been lost, and (3) is superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss. In addition, the Commission’s complaint charges that respondents made the false claim that scientific studies demonstrate that Sable Hair Farming System is effective in stopping hair loss and promoting hair growth.

The Commission’s complaint also charges that respondents made the false and unsubstantiated claim that Kevin Trudeau’s Mega Memory System will enable users to achieve a photographic memory, and the unsubstantiated claim that Kevin Trudeau’s Mega Memory System is effective in causing adults or children with learning disabilities or attention deficit disorder to substantially improve their memory. In addition, the Commission’s complaint charges that respondents made false claims that (1) scientific studies of Kevin Trudeau’s Mega Memory System on seventh-grade students demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their academic performance and grades, (2) scientific studies of Kevin Trudeau’s Mega Memory System on blind children demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability to a level of 95% to 98%, (3) scientific studies of Kevin Trudeau’s Mega Memory System on children with IQ’s of fifty to sixty demonstrate that Kevin Trudeau’s Mega Memory System will improve their recall ability to a level of almost 100%, and (4) scientific studies of Kevin Trudeau’s Mega Memory System on children with attention deficit disorder demonstrate that Kevin Trudeau’s Mega Memory System will substantially improve their memory.

The Commission’s complaint also charges that respondents made false and unsubstantiated claims that Dr. Callahan’s Addiction Breaking System (1) reduces an individual’s compulsive desire to eat, leading to significant weight loss, (2) reduces an individual’s compulsive desire to eat, leading to significant weight loss without the need to diet or exercise, and (3) cures addictions and compulsions, including but not limited to, smoking, eating, and using alcohol or heroin. In addition, the Commission’s complaint charges that respondents made the false claim that testimonials with regard to consumers’ use of Dr. Callahan’s Addiction Breaking System reflect the typical or ordinary experience of members of the public who use the product.

The Commission's complaint also charges that respondents made unsubstantiated claims that Jeanie Eller’s Action Reading is successful in teaching reading 100% of the time. Finally, the Commission’s complaint charges that respondents deceptively represented that their infomercials were independent television programs and not paid commercial advertising.

The proposed consent order contains provisions designed to remedy the violations charged and to prevent the respondent from engaging in similar acts and practices in the future. The proposed consent order prohibits the respondents from representing that Eden’s Secret Nature’s Purifying Product, or any substantially similar product, (1) causes significant weight loss, (2) prevents or cures illnesses, including but not limited to fatigue, headaches, depression, arthritis, insomnia, immune suppression, and premenstrual syndrome, (3) will cleanse the body of harmful toxins, or (4) will purify the body’s blood supply.

The proposed consent order also prohibits the respondents from representing that Sable Hair Farming System, or any substantially similar product, (1) will stop, prevent, cure, relieve, reverse or reduce hair loss, (2) will promote the growth of hair where hair has already been lost, or (3) is superior to Rogaine and Minoxidil in stopping, preventing, curing, relieving, reversing or reducing hair loss. In addition, the proposed consent order prohibits respondents from advertising, packaging, labeling, promoting, offering for sale, selling, or distributing any product that is represented as promoting hair growth or preventing hair loss, unless the product is the subject of an approved new drug application for such purpose under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.

The proposed consent order also prohibits the respondents from representing that Kevin Trudeau’s Mega Memory System, or any substantially similar product, will enable users to achieve a photographic memory. In addition, the proposed consent order prohibits the respondents from representing that Kevin Trudeau’s Mega Memory System, or any substantially similar product, is effective in causing adults or children with learning disabilities or attention deficit disorder to substantially improve their memory, unless, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

The proposed consent order also prohibits the respondents from representing that Dr. Callahan’s Addiction Breaking System, or any substantially similar product or program, (1) reduces an individual’s compulsive desire to eat, leading to significant weight loss, (2) reduces an individual’s compulsive desire to eat, leading to significant weight loss without the need to diet or exercise, or (3) cures addictions and compulsions, including but not limited to, smoking, eating, and using alcohol or heroin.

The proposed consent order also prohibits the respondents from representing with respect to Jeanie Eller’s Action Reading, or any other product or program that provides instruction in any aspect of reading, the extent to which individuals who use such product will learn to read or the success rate of individuals who use such product, unless the representation is substantiated.

The proposed consent order also prohibits the respondents from (1) misrepresenting the existence, contents, validity, results, conclusions or interpretations of any test, study or research, (2) representing the benefits, performance or efficacy of any product or program, unless the representation is substantiated, and (3) representing that the experience represented by any user testimonial or endorsement of any product or program represents the typical or ordinary experience of the members of the public, unless the representation is substantiated or clearly and prominently qualified.

In addition, the proposed consent order prohibits the respondents from creating, producing, selling or disseminating (1) any advertisement that misrepresents that it is not a paid advertisement, (2) any television commercial or other video advertisement fifteen minutes in length or longer that does not clearly and prominently disclose within the first thirty seconds and immediately before each presentation of ordering instructions that the program is a paid advertisement for the product or service, and (3) any radio commercial or other radio advertisement five minutes in length or long that does not broadcast clearly and audibly within the first thirty seconds and immediately before each presentation of ordering instructions or periodically through the program, but no more than approximately ten minutes apart that the program is a paid advertisement for the product or service.

The proposed consent order also requires respondents to pay the Federal Trade Commission $500,000. The funds paid by the respondents shall, in the discretion of the Federal Trade Commission, be used to provide direct redress to consumers. If the Federal Trade Commission determines that consumer redress is impracticable or otherwise unwarranted, any funds not so used shall be paid to the United States Treasury.

The remaining parts of the proposed consent order require the respondents (1) to maintain promotional and substantiation materials related to the claims covered by the order, (2) to deliver a copy of the order to all current and future principals, officers, directors, and managers, and deliver a summary of the order to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, (3) to notify the Commission of any changes in the structure of the proposed corporate respondent, (4) to notify the Commission of any changes in employment of the individual respondent, and (5) to file one or more compliance reports.

The purpose of this analysis is to facilitate public comment on the proposed consent order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.