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FTC
Charges Marketers of Ephedra With Making Deceptive Efficacy and Safety
Claims
FTC Also Challenges Advertising Claims for Additional
Dietary Supplements
July 1,
2003 - The Federal Trade Commission today announced three enforcement
actions against direct marketers of weight-loss products containing
ephedra. The two settlements and one complaint, filed in U.S. district
court, target deceptive efficacy, safety, and “no side effects” claims
for weight loss supplements containing ephedra (also known as Ma
Huang). The FTC actions challenge false advertising claims that the
ephedra supplements cause rapid, substantial, and permanent
weight-loss without diet or exercise, and that “clinical studies” or
“medical research” prove these claims. The FTC also challenges claims
that the ephedra weight-loss products are “100% safe,” “perfectly
safe,” or have “no side effects.”
The FTC
previously brought four enforcement actions challenging deceptive
safety and “no side effects” claims for ephedra supplements marketed
for body-building and energy, and as alternatives to street drugs like
Ecstasy.
“In these cases, the marketers both overstated
the benefits and understated the risks of using the products,” said
Howard Beales, Director of the FTC’s Bureau of Consumer Protection.
“With these enforcement actions, we’re putting the marketers of
ephedra supplements on notice that the law demands substantiation for
your advertising claims, and the FTC will do its best to make sure you
have it.”
The FTC
also is challenging weight-loss claims for several other non-ephedra
dietary supplements. One case challenges safety and efficacy claims
for a dietary supplement used to treat impotence in men, and another
challenges claims that a glucosamine and chondroitin dietary
supplement “cures” arthritis.
The two
settlements announced today require Health Laboratories of North
America, Inc., USA Pharmacal Sales, Inc., and their principals to stop
making false and deceptive advertising claims, to include warnings
about the health risks of ephedra and certain other products, and to
pay a total of $370,000 in consumer redress. The third case, against
Michael S. Levey and others, will proceed to litigation.
Michael S. Levey
The FTC
charges California residents Michael S. Levey and Gary Ballen; Bentley
Myers International Co., based in Vancouver, Canada; and Publisher’s
Data Services, Inc. and Nutritional Life, Inc., both based in Beverly
Hills, California, with violating the FTC Act in marketing dietary
supplements purported to cause rapid and substantial weight loss
without diet or exercise and to “cure” arthritis. Levey and Ballen
control the companies. In addition, the FTC is charging Levey and the
three companies with violating a 1993 FTC order in connection with
these marketing activities. The complaint, filed by the Department of
Justice on behalf of the FTC, alleges that the defendants:
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made false or unsubstantiated claims that
three purported weight loss products – Zymax and MillinexES (both
containing ephedra), and Serotril (containing St. John’s wort) –
cause substantial weight loss in a short period of time, without the
need to diet or exercise;
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made unsubstantiated “no side effects” claims
for the Zymax and MillinexES ephedra products;
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falsely represented that clinical studies
prove that Zymax and MillinexES cause substantial weight loss in a
short time without diet or exercise; and
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made unsubstantiated claims that CartazyneDS,
a dietary supplement containing glucosamine and chondroitin, “cures”
arthritis, “rebuilds” cartilage in human joints “within days,” and
is an effective alternative to joint replacement surgery.
The
complaint alleges that the defendants advertised these weight loss and
arthritis products in brochures that used fictitious expert
endorsements, fake consumer testimonials, and false “before and after”
pictures. The defendants allegedly used different business names in
marketing their products, such as “Denman Scientific Research” in ads
for Zymax, “Cartazyne Sciences International” in ads for CartazyneDS,
and “Serotril Sciences, International” in ads for Serotril.
The
complaint also alleges that Levey violated the 1993 order by failing
to notify the FTC within 30 days after he became affiliated with
Bentley Myers and Publisher’s Data Services. The FTC’s 1993 cease and
desist order against Michael Levey and his company, Positive Response
Marketing, Inc., was based on allegations that Levey made false and
misleading representations in television infomercials for the EuroTrym
Diet Patch, the Foliplexx hair-loss product, and the Y-Bron impotence
treatment, and performed deceptive demonstrations in infomercials for
the
Magic
Wand kitchen mixer. In addition to requiring a $275,000 redress
payment, the order prohibits Levey from making unsubstantiated
advertising claims and from using deceptive endorsements and
demonstrations, and imposes certain recordkeeping and reporting
obligations.
The FTC
is seeking monetary civil penalties from Levey and the three companies
for violations of the 1993 order, and also is seeking consumer redress
and injunctive relief from all the defendants.
The
Commission vote to refer the Levey complaint to the Department of
Justice for filing was 5-0. The complaint was filed at the FTC’s
request by the Department of Justice in U.S. District Court for the
Central District of California, on June 30, 2003.
Health Laboratories of North America
The
FTC’s complaint names Health Laboratories of North America, Inc. (HLNA),
based in Scottsdale, Arizona, and its director, Marc Kaplan. According
to the FTC, the defendants marketed two products under the brand name
“Berry Trim Plus” primarily through direct mail. Both products
contained Hydroxycitric Acid or “HCA,” an extract from brindall
berries, and one also contained ephedrine alkaloids from Ma Huang. The
FTC alleges that HLNA made numerous false and unsubstantiated
weight-loss claims for Berry Trim Plus through testimonials such as,
“Teacher Loses 70 lbs. In Only 8 Weeks Easily,” and other statements.
The FTC alleges that the HLNA defendants falsely represented that
Berry Trim Plus products cause rapid and substantial weight loss,
including as much as 70 pounds in eight weeks, without dieting or
increasing exercise, and that clinical studies prove that Berry Trim
Plus causes rapid and substantial weight loss. The FTC complaint
further alleges that the defendants did not have a reasonable basis to
advertise that Berry Trim Plus is “100% safe” and “perfectly safe” to
use, and that it prevents fat absorption from whatever the user eats.
The
HLNA settlement order prohibits the defendants from making false and
unsubstantiated weight-loss claims, as well as unsubstantiated safety
claims. The order also prohibits the defendants from misrepresenting
the contents, validity, results, conclusions, or interpretations of
any test or study. The order requires that a prominent warning about
health risks be made in any advertisement, promotional item, or
product label for an ephedra product. The warning includes information
that ephedra use can result in serious injury, and even death. The
order requires HLNA to pay $195,000 in consumer redress. If, however,
the defendants have made any material misrepresentation or omission on
their financial statements, the court may enter a $35 million judgment
against them.
USA Pharmacal Sales, Inc.
The
FTC’s complaint names USA Pharmacal Sales, Inc., and its co-owners,
John Pence and Arthur Sussman. The defendants, based in Palm Harbor,
Florida, marketed and sold three weight-loss products and an erectile
dysfunction supplement. The META-BIOLOGICAL weight-loss cocktail
contains ephedrine alkaloids derived from Ma Huang, caffeine, and 19
other ingredients. FAT•SPONGE IN A PILL is comprised of chitosan and
glucomannan, and digestive aids for lactose-intolerant people.
CALOTROL/MD contains chitosan, gymnema
sylvestre, HCA, and chromium picolinate. The erectile dysfunction
supplement, VIRILE V, contains yohimbine, androstenedione (a steroid
hormone), and 12 other active ingredients. According to the FTC, the
defendants advertised their weight loss and erectile dysfunction
products through free-standing inserts in regional newspapers and
direct mail. The defendants also used an expert medical endorser in
some advertisements to tout their products’ efficacy and safety.
The
FTC’s complaint alleges that advertisements for the purported
weight-loss products made false claims that the products cause rapid,
substantial, and permanent weight loss without the need to reduce
caloric intake. The complaint also alleges that the ads made false
claims that “clinical tests” or “medical research” proves that the
products cause rapid, significant, or permanent weight loss. The
complaint further alleges that the defendants made unsubstantiated
claims that the META-BIOLOGICAL ephedra weight-loss product is safe.
In addition, the FTC alleges that the defendants made deceptive
efficacy and safety claims for the erectile dysfunction supplement.
According to the FTC, there is no reliable evidence to suggest that
ephedra, an ingredient in META-BIOLOGICAL, or androstenedione and
yohimbe, ingredients in VIRILE V, are safe. In fact, the complaint
alleges that they have been associated with health risks.
The USA
Pharmacal settlement order prohibits the defendants from making false
or unsubstantiated claims that the weight-loss products or any
substantially similar product causes rapid, substantial, or permanent
weight loss or fat loss. The order also bars them from representing
that clinical or medical studies support such claims. The order
requires that the defendants place a prominent warning about health
risks in any advertisement, promotional item, or product label for an
ephedra product. The warning includes information that ephedra use can
result in serious injury, and even death. USA Pharmacal likewise must
place health risk warnings on materials that make claims for any
products that contain yohimbe or androgen.
USA
Pharmacal has agreed to pay $175,000 in consumer redress. If, however,
the defendants have made any material misrepresentation or omission on
their financial statements, the court may enter a judgment for $9.2
million against them.
Both
the HLNA and USA Pharmacal settlements require the defendants to take
reasonable steps to monitor and ensure that all employees and agents
comply with the order, and to terminate any employee who knowingly
violates the order. Also, both settlements contain various
recordkeeping requirements to assist the FTC in monitoring the
defendants’ compliance.
The
Commission vote to authorize the staff to file the complaint and
stipulated final judgment in the HLNA case was 5-0. The documents are
being filed in the U.S. District Court for the District of Columbia.
The
Commission vote to authorize the staff to file the complaint and
stipulated final judgment in the USA Pharmacal case was 5-0. The
documents are being filed in the U.S. District court for the Middle
District of Florida, Tampa Division.
Consumer Tips:
Resources for consumers, businesses, and the press are available at
www.ftc.gov/dietfit. The FTC has the following tips for consumers who
are interested in weight-loss products or programs:
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Products and programs that promise quick and easy weight loss are
bogus. To lose weight, you have to lower your intake of calories and
increase your physical activity.
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There
are no miracle weight-loss products. Be skeptical of products and
programs that claim they can keep weight off permanently. Be
skeptical about exaggerated claims.
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Consumers who want advice on how to find a healthy weight loss plan
should visit the Partnership for Healthy Weight Management Web site
at www.consumer.gov/weightloss.
NOTE: The Commission authorizes the filing of 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 defendant actually has violated the law. The case
will be decided by the court.
NOTE: The stipulated final judgments and orders are
for settlement purposes only and do not constitute an admission by
the defendants of a law violation. A stipulated final judgment and
order have the force of law when signed by the judge.
Copies of the complaints and stipulated final judgments
and orders 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.
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Related Documents:
Project Waistline Campaign Web Page
United States of
America (for the Federal Trade Commission) v. Michael S. Levey; Gary
Ballen; Bentley Myers International Co.; Publisher's Data Services,
Inc.; and Nutritional LIfe, Inc.
(Central District of California, Western Division).
Federal Trade
Commission v. USA Pharmacal Sales, Inc.; John Pence; and Arthur
Sussman
(Middle District of Florida, Tampa Division).
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Complaint for
Permanent Injunction and Other Equitable Relief [PDF 40KB]
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Stipulated Final Judgment
and Order For A Permanent Injunction and Monetary Relief
Against USA Pharmacal Sales, Inc., John Pence, and Arthur
Sussman [PDF 41KB]
Federal Trade Commission v. Health
Laboratories of North America, Inc., and Marc J. Kaplan
(District of Columbia).
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Complaint for Permanent
Injunction and Other Equitable Relief Pursuant to Section 13(b)
of the Federal Trade Commission Act [PDF27KB]
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