[Federal Register Volume 63, Number 13 (Wednesday, January 21, 1998)]
[Notices]
[Pages 3129-3131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1360]
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FEDERAL TRADE COMMISSION
[File No. 942-3278]
Mega Systems International, Inc., et al.; Analysis To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before March 23, 1998.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pennsylvania Avenue, N.W., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
C. Steven Baker or Russell W. Damtoft, Federal Trade Commission,
Chicago Regional Office, 55 East Monroe St., Suite 1860, Chicago, IL.
60603. (312) 353-8156.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period of sixty (60) days. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for January 13, 1998), on the World Wide Web, at ``http.//www.ftc.gov/
os/actions/htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W.,
Washington, DC 20580, either in person or by calling (202) 326-3627.
Public comment is invited. Such comments or views will be considered by
the Commission and will be available for inspection and copying at its
principal office in accordance with Section 4.9(b)(6)(ii) of the
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).
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
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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 longer that does
not broadcast clearly an audibly within the first thirty seconds and
immediately before each presentation of ordering instructions or
[[Page 3131]]
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.
Donald S. Clark,
Secretary.
[FR Doc. 98-1360 Filed 1-20-98; 8:45 am]
BILLING CODE 6750-01-M
