LETTER TO DISTRIBUTORS
[To be printed on letterhead of EHP Products, Inc.]
[Name and address of recipient] [Date]
Dear [recipient's name]
The Federal Trade Commission Act requires advertisers to have adequate substantiation for all objective product claims. It is unlawful to advertise without adequate substantiation. The Federal Trade Commission ("FTC") deems deceptive health-related advertising claims which are not supported by competent and reliable scientific evidence. Competent and reliable scientific evidence is defined as tests, 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. Anecdotal evidence and consumer testimonials are not considered competent and reliable scientific evidence. The granting of a U.S. patent is not considered proof that a product or process is effective for a particular purpose.
The FTC alleges that certain advertising by EHP Products, Inc.("EHP") includes claims concerning cetyl myristoleate ("CMO") products that lack adequate substantiation. In particular, the FTC alleges claims that CMO products are effective in the treatment, relief, mitigation, prevention, or cure of arthritis and other health conditions are not substantiated by competent and reliable scientific evidence. Rather than contest this matter, EHP and the FTC have agreed to a settlement. Under the terms of the settlement, EHP has agreed to send this letter to its current and former distributors and to institute certain procedures, described below. EHP's agreement with the FTC is for settlement purposes only and does not constitute an admission by EHP that the law has been violated as alleged in the complaint, or that the facts alleged in the complaint, other than the jurisdictional facts, are true.
In its settlement agreement with the FTC, EHP agreed to certain conditions concerning the sale of its products to its distributors and concerning distributor advertising. In accordance with that agreement, as a condition to your future purchase of EHP products intended for distribution, or resale, or recommendation to others in the context of a professional or commercial relationship, you must not use, rely on, or distribute any advertising or promotional materials containing false or unsubstantiated claims. Further, you must not make false or unsubstantiated oral representations concerning any EHP product. You must also notify your customers who purchase the products for redistribution to do the same. If you or those customers use such materials or make such representations we are obliged to, and we will, stop doing business with you.
In its settlement agreement with the FTC, EHP has agreed to review distributor advertising before it is disseminated to ensure its compliance with substantiation requirements. Accordingly, as a condition of distributing EHP's products, you must submit to EHP, in advance and prior to use, dissemination, or publication, all advertisements or promotional materials that you intend to use, publish, or disseminate with regard to any EHP product or program. In addition, you must furnish us with the URL (Internet address) of any Web site you intend to use in connection with the marketing or promotion of our products. You must not use, disseminate, or publish any such advertisement or promotional materials without our prior approval. We may, in our discretion, send you materials you are authorized to use in your advertising.
In accordance with its settlement agreement with the FTC, EHP shall not do business with any distributor who fails to comply with the terms of this letter. Moreover, EHP is obligated to, and will, report to the FTC any instance of a claim made for its products that is false or unsubstantiated. Please sign, date, and return the enclosed copy of this letter to EHP Products, Inc., P.O. Box 1306, Ashland, KY 41105-1306, acknowledging your receipt of this letter and your agreement to the terms set forth herein.
Thank you very much for your cooperation.
Elaine H. Parrish
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges receipt of this letter and hereby agrees to its terms and conditions.