[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Notices]
[Pages 5922-5927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2306]
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FEDERAL TRADE COMMISSION
[File No. 922 3212]
Formu-3 International, Inc., et al.; Proposed Consent Agreement
With Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, the Ohio weight-loss centers from making
false and unsubstantiated weight-loss and weight-loss maintenance
claims, and from misrepresenting the price of the program in any way,
and would require the respondents to make certain disclosures in
conjunction with weight-loss and safety maintenance claims in the
future.
DATES: Comments must be received on or before April 3, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Brenda Doubrava, Cleveland Regional Office, Federal Trade Commission,
520-A Atrium Office Plaza, 668 Euclid Ave., Cleveland, Ohio 44114-3006.
(216) 522-4210.
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 following 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. 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)).
In the Matter of: Formu-3 International, Inc., a corporation,
Formu-3 of Northern Ohio, Inc., a corporation, and Formu-3 of
Southern Ohio, Inc., a corporation, File No. 922 3212.
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Formu-3 International, Inc., a
corporation, Formu-3 of Northern Ohio, Inc., a corporation, and Formu-3
of Southern Ohio, Inc., a corporation (``proposed respondents''), and
it now appearing that proposed respondents are willing to enter into an
agreement containing an order to cease and desist from the use of the
acts and practices being investigated,
It is hereby agreed by and between Formu-3 International, Inc., a
Formu-3 of Northern Ohio, Inc., and Formu-3 of Southern Ohio, Inc., by
their duly authorized officers, and their attorneys, and counsel for
the Federal Trade Commission that:
1. Proposed respondents Formu-3 International, Inc., Formu-3 of
Northern Ohio, Inc., and Formu-3 of Southern Ohio, Inc., are
corporations organized, existing, and doing business under and by
virtue of the laws of the State of Ohio. The principal place of
business of all three corporations is located at 4790 Douglas Circle
NW., Canton, Ohio 44718.
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;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this agreement;
and
(d) Any claim under the Equal Access to Justice Act, 5 U.S.C. 504.
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 in respect thereto publicly released. The
Commission thereafter may either withdraw its acceptance of this
agreement and so notify the 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 of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of complaint.
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 Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondents: (a) issue its complaint corresponding in form and
substance with the draft complaint and its decision containing the
following Order to cease and desist in disposition of the proceeding;
and (b) make information public in respect thereto. When so entered,
the Order to cease and desist 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 by the U.S. Postal Service of the
complaint and decision containing the agreed-to Order to proposed
respondents' addresses as stated in this agreement 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, and no agreement, understanding, representation, or
interpretation not contained in the [[Page 5923]] Order or the
agreement may be used to vary or contradict the terms of the Order.
7. Proposed respondents have read the draft complaint and the
Order. Proposed respondents understand that once the Order has been
issued, they will be required to file one or more compliance reports
showing that they have fully complied with the Order. Proposed
respondents further understand that they may be liable for civil
penalties in the amount provided by law for each violation of the Order
after it becomes final.
Order
Definitions
For the purposes of this Order, the following definitions shall
apply:
A. ``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 relevant profession or science to
yield accurate and reliable results;
B. ``Weight loss program'' shall mean any program designed to aid
consumers in weight loss or weight maintenance;
C. A ``broadcast medium'' shall mean any radio or television
broadcast, cablecast, home video or theatrical release;
D. For any Order-required disclosure in a print medium to be made
``clearly and prominently'' or in a ``clear and prominent'' manner, it
must be given both in the same type style and in: (1) Twelve point type
where the representation that triggers the disclosure is given in
twelve point or larger type; or (2) the same type size as the
representation that triggers the disclosure where that representation
is given in a type size that is small than twelve point type. For any
Order-required disclosure given orally in a broadcast medium to be made
``clearly and prominently'' or in a ``clear and prominent manner'', the
disclosure must be given at the same volume and in the same cadence as
the representation that triggers the disclosure.
E. A ``short broadcast advertisement'' shall mean any advertisement
of thirty seconds or less duration made in a broadcast medium.
I
It is Ordered that respondents, Formu-3 International, Inc., a
corporation, Formu-3 of Northern Ohio, Inc., a corporation, and Formu-3
of Southern Ohio, Inc., a corporation, their successors and assigns,
and their officers, and respondents' agents, representatives and
employees, directly or through any corporation, subsidiary, division or
other device, including franchisees or licensees, in connection with
the advertising, promotion, offering for sale, or sale of any weight
loss program in or affecting commerce, as ``commerce'' is defined in
the Federal Trade Commission Act, do forthwith cease and desist from:
A. Making any representation, directly or by implication, about the
success of participants on any weight loss program in achieving or
maintaining weight loss or weight control unless, at the time of making
any such representation, respondents possess and rely upon competent
and reliable scientific evidence substantiating the representation,
provided, further, that for any representation that:
1. Any weight loss achieved or maintained through the weight loss
program is typical or representative of all or any subset of
participants using the program, said evidence shall, at a minimum, be
based on a representative sample of:
a. All participants who have entered the program, where the
representation relates to such persons; provided, however, that the
required sample may exclude those participants who dropped out of the
program within two weeks of their entrance, or who were unable to
complete the program due to illness, pregnancy, or change of residence;
or
b. All participants who have completed a particular phase of the
program or the entire program, where the representation only relates to
such persons;
2. Any weight loss is maintained long-term, said evidence shall, at
a minimum, be based upon the experience of participants who were
followed for a period of at least two years from their completion of
the active maintenance phase of respondents' program or earlier
termination, as applicable; and
3. Any weight loss is maintained permanently said evidence shall,
at a minimum, be based upon the experience of participants who were
followed for a period of time after completing the program that is
either:
a. Generally recognized by experts in the field of treating obesity
as being of sufficient length for predicting that weight loss will be
permanent, or
b. Demonstrated by competent and reliable survey evidence as being
of sufficient duration to permit such a prediction.
B. Representing, directly or by implication, except through
endorsements or testimonials referred to in paragraph I.E. herein, that
participants of any weight loss program have successfully maintained
weight loss, unless respondents disclose, clearly and prominently, and
in close proximity to such representation, the statement: ``For many
dieters, weight loss is temporary.''; provided, further that
respondents shall not represent, directly or by implication, that the
above-quoted statement does not apply to dieters in respondents' weight
loss program; provided, however, that a mere statement about the
existence, design, or content of a maintenance program shall not,
without more, be considered a representation that participants of any
weight loss program have successfully maintained weight loss.
C. Representing, directly or by implication, except through short
broadcast advertisements referred to in paragraph I.D. herein, and
except through endorsements or testimonials referred to in paragraph
I.E. herein, that participants of any weight loss program have
successfully maintained weight loss, unless respondents disclose,
clearly and prominently, and in close proximity to such representation,
the following information:
1. The Average percentage of weight loss maintained by those
participants;
2. The duration over which the weight loss was maintained, measured
from the date that participants ended the active weight loss phase of
the program, provided, further, that if any portion of the time period
covered includes participation in a maintenance program(s) that follows
active weight loss, such fact must also be disclosed; and
3. If the participant population referred to is not representative
of the general participant population for respondents' programs:
a. The proportion of the total participant population in
respondents' programs that those participants represent, expressed in
terms of a percentage or actual numbers of participants, or
b. The statement: ``Form-You-3 Weight Loss Centers makes no claim
that this [these] result[s] is [are] representative of all participants
in the Form-You-3 Weight Loss Centers program.'';
provided, further, that compliance with the obligations of this
paragraph I.C. in no way relieves respondents of the requirement under
paragraph I.A. of this Order to substantiate any representation
[[Page 5924]] about the success of participants on any weight loss
program in maintaining weight loss.
D. Representing, directly or by implication, in short broadcast
advertisements, that participants of any weight loss program have
successfully maintained weight loss, unless respondents:
1. Include, clearly and prominently, and in immediate conjunction
with such representation, the statement: ``Check at our centers for
details about our maintenance record.'';
2. For a period of time beginning with the date of the first
broadcast of any such advertisement and ending no sooner than thirty
days after the last broadcast of such advertisement, comply with the
following procedures upon the first presentation of any form asking for
information from a potential client, but in any event before such
person has entered into any agreement with respondents:
a. Give to each potential client a separate document entitled
``Maintenance Information,'' which shall include all the information
required by paragraph I.B. and subparagraphs I.C.1-3 of this Order and
shall be formatted in the exact type size and style as the example form
below, and shall include the heading (Helvetica 14 pt. bold), lead-in
(Times Roman 12 pt.), disclosures (Helvetica 14 pt. bold),
acknowledgment language (Times Roman 12 pt.) and signature block
therein; provided, further, that no information in addition to that
required to be included in the document required by this subparagraph
I.D.2 shall be included therein:
Maintenance Information
You may have seen our recent ad about maintenance success. Here's
some additional information about our maintenance record.
[Disclosure of maintenance statistics goes here ____________.]
For many dieters, weight loss is temporary.
I have read this notice.
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(Client Signature)
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(Date)
b. Require each potential client to sign such document; and
c. Give each client a copy of such document; and
3. Retain in each client file a copy of the signed maintenance
notice required by this paragraph;
provided, further, that:
(i) Compliance with the obligations of this paragraph I.D. in no
way relieves respondents of the requirement under paragraph I.A. of
this Order to substantiate any representation about the success of
participants on any weight loss program in maintaining weight loss; and
(ii) Respondents must comply with both paragraph I.D. and paragraph
I.C. of this Order if respondents include in any such short broadcast
advertisement a representation about maintenance success that states a
number or percentage, or uses descriptive terms that convey a
quantitative measure such as ``most of our customers maintain their
weight loss long-term''; and
provided, however, that the provisions of paragraph I.D. shall not
apply to endorsements or testimonials referred to in paragraph I.E.
herein.
E. Using any advertisement containing an endorsement or testimonial
about weight loss success or weight loss maintenance success by a
participant or participants of respondents' weight loss programs if the
weight loss success or weight loss maintenance success depicted in the
advertisement is not representative of what participants in
respondents' weight loss programs generally achieve, unless respondents
disclose, clearly and prominently, and in close proximity to the
endorser's statement of his or her weight loss success or weight loss
maintenance success:
1. What the generally expected success would be for Form-You-3
Weight Loss Centers customers in losing weight or maintaining achieved
weight loss; provided, however, that in determining the generally
expected success for Form-You-3 Weight Loss Centers customers,
respondents may exclude those customers who dropped out of the program
within two weeks of their entrance or who were unable to complete the
program due to illness, pregnancy, or change of residence; or
2. One of the following statements:
a. ``You should not expect to experience these results.''
b. ``This result is not typical. You may not do as well.''
c. ``This result is not typical. You may be less successful.''
d. ``________________'s success is not typical. You may not do as
well.''
e. ``________________'s experience is not typical. You may achieve
less.''
f. ``Results not typical.''
g. ``Results not typical of program participants.'';
provided, further, that if the endorsements or testimonials covered by
this paragraph are made in a broadcast medium, any disclosure required
by this paragraph must be communicated in a clear and prominent manner
and in immediate conjunction with the representation that triggers the
disclosure; and
provided, however, that:
(i) For endorsements or testimonials about weight loss success,
respondents can satisfy the requirements of subparagraph I.E.1. by
accurately disclosing the generally expected success in the following
phrase: ``Form-You-3 Weight Loss Centers clients lose an average of
______ pounds over an average ______ - week treatment period''; and
(ii) If the weight loss success or weight loss maintenance success
depicted in the advertisement is representative of what participants of
a group or subset clearly defined in the advertisement generally
achieve, then, in lieu of the disclosures required in either
subparagraph I.E.1. or 2. herein, respondents may substitute a clear
and prominent disclosure of the percentage of all of respondents'
customers that the group or subset defined in the advertisement
represents.
F. Representing, directly or by implication, the average or typical
rate or speed at which participants or prospective participants in any
weight loss program have lost or will lose weight, unless at the time
of making such representation, respondents possess and rely upon
competent and reliable scientific evidence substantiating the
representation.
G. Representing, directly or by implication, that participants or
prospective participants in respondents' weight loss programs have
reached or will reach a specified weight within a specified time
period, unless at the time of making such representation, respondents
possess and rely upon competent and reliable scientific evidence
substantiating the representation.
G. Representing, directly or by implication, that participants or
prospective participants in respondents' weight loss programs have
reached or will reach a specified weight within a specified time
period, unless at the time of making such representation, respondents
possess and rely upon competent and reliable scientific evidence
substantiating the representation.
H. Failing to disclose, clearly and prominently, either (1) to each
participant who, after the first two weeks on the program, is
experiencing average weekly weight loss that exceeds two percent (2%)
of said participant's initial body weight, or three pounds, whichever
is less, for at least two [[Page 5925]] consecutive weeks, or (2) in
writing to all participants, when they enter the program, that failure
to follow the diet instructions and consume the total caloric intake
recommended may involve the risk of developing serious health
complications.
I. Representing, directly or by implication, the daily, weekly, or
monthly price at which any weight loss program can be purchased, unless
respondents disclose, clearly and prominently, and in close proximity
to such representation, either: (1) The number of days, weeks, or
months participants will be obligated to pay the weekly price
represented; or (2) the total cost of the weight loss program;
provided, further, that in broadcast media, if the representation that
triggers any disclosure required by this paragraph is oral, the
required disclosure must also be made orally.
J. Misrepresenting, directly or by implication, the competence,
skill, training, credentials or expertise of any of respondents'
employees or any of the employees of respondents' franchisees.
K. Misrepresenting, directly or by implication, through numerical
or descriptive terms or any other means, the existence or amount of
calories, fat, or any other nutrient or ingredient in any food product,
or otherwise misrepresenting the performance, efficacy, safety,
nutritional composition, or benefits of any food or drug, as those
terms are defined in Section 15 of the Federal Trade Commission Act.
L. Misrepresenting, directly or by implication, the performance,
efficacy, price, or safety of any weight loss program.
II
Nothing in this Order shall prohibit respondents from making any
representation that is specifically permitted in labeling for any such
product by regulations promulgated by the Food and Drug Administration
pursuant to the Nutrition Labeling and Education Act of 1990, or by
nutrition labeling regulations promulgated by the Department of
Agriculture pursuant to the Federal Meat Inspection act or the Poultry
Products Inspection Act.
III
Nothing in this Order shall prohibit respondents from making any
representation for any drug that is permitted in labeling for any 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.
IV
It is further ordered that respondents shall notify the Commission
at least thirty (30) days prior to the effective date of any proposed
change in the respondents such as dissolution, assignment, or sale
resulting in the emergence of a successor corporation(s), the creation
or dissolution of subsidiaries, or any other change in the corporation
that may affect compliance obligations arising out of this Order.
V
It is further ordered that for three (3) years after the last date
of dissemination of any representation covered by this Order,
respondents, or their successors and assigns, shall maintain and upon
request make available to the Federal Trade Commission for inspection
and copying:
A. All materials that were relied upon in disseminating such
representation; and
B. All tests, reports, studies, surveys, demonstrations or other
evidence in their possession or control that contradict, qualify, or
call into question such representation, or the basis relied upon for
such representation, including complaints from consumers.
VI
It is further ordered that respondents shall distribute a copy of
this Order to each of their officers, agents, representatives,
independent contractors and employees, who are involved in the
preparation and placement of advertisements or promotional materials or
in communication with customers or prospective customers or who have
any responsibilities with respect to the subject matter of this Order;
and, for a period of five (5) years from the date of entry of this
Order, distribute same to all future such officers, agents,
representatives, independent contractors and employees.
VII
It is further ordered that:
A. Respondent Formu-3 International, Inc., shall distribute a copy
of this Order to each of its franchises and licensees and shall
contractually bind them to comply with the prohibitions and affirmative
requirements of this Order; respondent may satisfy this contractual
requirement by incorporating such Order requirements into its current
Operations Manual; and
B. Respondent Formu-3 International, Inc., shall further make
reasonable efforts to monitor its franchisees' and licensees'
compliance with the Order provisions; respondent may satisfy this
requirement by: (1) Taking reasonable steps to notify promptly any
franchisee or licensee that respondent determines is failing materially
or repeatedly to comply with any order provision; (2) providing the
Federal Trade Commission with the name and address of the franchisee or
licensee and the nature of the noncompliance if the franchisee or
licensee fails to comply promptly with the relevant Order provision
after being so notified; and (3) in cases where that franchisee's or
licensee's conduct constitutes a material or repeated violation of the
order, diligently pursuing reasonable and appropriate remedies
available under its franchise or license agreement and applicable state
law to bring about a cessation of that conduct by the franchisee or
licensee.
Provided, however, that respondent Formu-3 International, Inc.'s
compliance with this Part shall constitute an affirmative defense to
any civil penalty action arising from an act or practice of one of
respondent's franchisees or licensees that violates this Order where
respondent: a) has not authorized, approved or ratified that conduct;
b) has reported that conduct promptly to the Federal Trade Commission
under this Part; and c) in cases where that franchisee's or licensee's
conduct constitutes a material or repeated violation of the Order, has
diligently pursued reasonable and appropriate remedies available under
the franchise or license agreement and applicable state law to bring
about cessation of that conduct by the franchisee or licensee.
VIII
It Is Further Ordered that respondents shall, within sixty (60)
days after the date of service of this Order, file with the Commission
a report, in writing, setting forth in detail the manner and form in
which it has complied with this Order.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Formu-3 International, Inc., Formu-3 of
Northern Ohio, Inc., and Formu-3 of Southern Ohio, Inc., (hereinafter
referred to collectively as ``Formu-3''), marketers of the Formu-You-3
(or ``Formu-3'') Weight Loss Centers' low-calorie diet program. The
Formu-3 diet program is offered to the public throughout much of the
United States through centers franchised by Formu-3 International,
Inc., and through centers owned by [[Page 5926]] Formu-3 of Northern
Ohio, Inc., and Formu-3 of Southern Ohio, Inc.
The proposed consent order has been placed on the public record for
sixty (60) days for the 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 will decide whether it should withdraw from the agreement
or make final the agreement's proposed order.
The Commission's complaint charges that the proposed respondents
deceptively advertised: (1) Their diet program's success in helping
customers achieve and maintain weight loss; (2) the rate at which
customers will lose weight; (3) the time frame within which consumers
will achieve their desired weight loss goals; (4) the purchase price of
the Formu-3 program; (5) the benefits to dieters of the food products
Formu-3 sells; and (6) the qualifications and expertise of counselors
employed at Formu-3 weight loss centers. The complaint also alleges
that Formu-3 engaged in the deceptive practice of failing to warn
clients it monitors of the health importance of following the diet
protocol.
Success
The complaint against Formu-3 alleges that the company failed to
possess a reasonable basis for claims it made regarding the success of
its customers in losing weight and avoiding the regain of weight lost
during the program. Through consumer testimonials and other
advertisements, Formu-3 represented that its customers typically are
successful in reaching their weight loss goals and in maintaining their
weight loss achieved under the Formu-3 diet program long-term or
permanently.
The Commission believes that these success claims for customer
weight loss and maintenance of achieved weight loss are deceptive
because Formu-3, at the time it made the claims, did not possess
adequate substantiation for those claims.
The proposed consent order seeks to address the alleged success
misrepresentations cited in the accompanying complaint in several ways.
First, the order (Part I.A.) requires the company to possess a
reasonable basis consisting of competent and reliable scientific
evidence substantiating any claim about the success of participants on
any diet program in achieving or maintaining weight loss. To ensure
compliance, the order further specifies what this level of evidence
shall consist of when certain types of success claims are made:
(1) In the case of claims that weight loss is typical or
representative of all participants using the program or any subset of
those participants, that evidence shall be based on a representative
sample of: (a) all participants who have entered the program, where the
representation relates to such persons; or (b) all participants who
have completed a particular phase of the program or the entire program,
where the representation only relates to such persons.
(2) In the case of claims that any weight loss is maintained long-
term, that evidence shall be based upon the experience of participants
who were followed for a period of at least two years after their
completion of the respondents' program, including any periods of
participation in respondents' maintenance program.
(3) In the case of claims that weight loss is maintained
permanently, that evidence shall be based upon the experience of
participants who were followed for a period of time after completing
the program that is either: (a) generally recognized by experts in the
field of treating obesity as being of sufficient length to constitute a
reasonable basis for predicting that weight loss will be permanent; or
(b) demonstrated by competent and reliable survey evidence as being of
sufficient duration to permit such a prediction.
Second, as measures to ensure future compliance, the proposed order
requires the proposed respondents for any claim that participants of
any diet program have successfully maintained weight loss to disclose
the fact that ``For many dieters, weight loss is temporary'' (Part
I.B.), as well as the following information relating to that claim
(Part I.C.):
(1) The average percentage of weight loss maintained by those
participants (e.g., ``60% of achieved weight loss was maintained''),
(2) The duration over which the weight loss was maintained,
measured from the date that participants ended the active weight loss
phase of the program, and the fact that all or a portion of the time
period covered includes participation in proposed respondent's
maintenance program(s) that follows active weight loss, if that is the
case--e.g., ``participants maintain an average of 60% of weight loss 22
months after active weight loss (includes 18 months on maintenance
program)'', and
(3) Where the participant population referred to is not
representative of the general participant population for the program,
the proportion of the total participant population that those
participants represent, expressed in terms of a percentage of actual
numbers of participants--e.g. ``Participants on maintenance--30% of our
customers--kept off an average of 66% of the weight for one year
(includes time on maintenance program)'' or, in lieu of that factual
disclosure, the statement: ``Form-You-3 Weight Loss Centers makes no
claim that this result is representative of all participants in the
Form-You-3 Weight Loss Centers program.''
Third, for maintenance success claims made in broadcast
advertisements of thirty seconds or less duration, the proposed order
(Part I.D.) requires that Formu-3, in lieu of making the factual
disclosures required for such claims by Part I.C:
(1) Include in such advertisements the statement ``Check at our
centers for details about our maintenance record.''; and
(2) Provide consumers at point-of-sale with a required form that
includes the factual disclosures required by Part I.C, which form must
be signed by the client and retained in the company's client file. If
any potential participant who does not then participate in the program
refused to sign or accept a copy of such document, respondent shall so
indicate on such document.
The proposed order makes clear that this alternative disclosure
requirement does not relieve Formu-3 of the obligation to substantiate
any maintenance success claim, in accordance with Part I.A of the
order, and it ``takes back'' the exception from full quantitative
disclosures in short broadcasting advertising if Formu-3 makes a
maintenance success claim that uses numbers or descriptive terms that
convey a quantitative measure, such as ``most of our customers maintain
their weight loss long term.'' Formu-3 in that case would have to make
all the required disclosures in the ad and provide the disclosures at
point-of-sale.
Fourth, for weight-loss and weight-loss maintenance success claims
made through endorsements or testimonials that are not representative
of what Formu-3 diet program participants generally achieve, the order
(Part I.E.) requires that Formu-3 disclose either what the generally
expected success would be for Formu-3 customers, or one of several
alternative statements, such as ``This result is not typical. You may
be less successful,'' which explains the limited applicability of
atypical testimonials in accordance with the Commission's ``Guides
Concerning Use [[Page 5927]] of Endorsements and Testimonials in
Advertising'' 16 C.F.R. 255.2 (a). Under the proposed order, Formu-3
may satisfy the requirements of the first disclosure concerning
generally expected success by accurately disclosing those facts in the
following format: ``Form-You-3 Weight Loss Centers clients lose an
average of ______ pounds over an average ______ - week treatment
period.''
Finally, the proposed order (Part I.L.) generally prohibits Formu-3
from misrepresenting the performance or efficacy of any weight loss
program.
Rate of Weight Loss
The Commission's complaint further alleges that Formu-3 failed to
possess a reasonable basis for claims it made concerning the rate of
weight loss for participants in its program and that the rate of weight
loss claims it made were false.
The proposed consent order addresses these practices (Part I.F.) by
prohibiting Formu-3 from representing that participants in its program
will lose weight at an average or typical rate or speed unless Formu-3
possesses and relies upon competent and reliable scientific evidence
substantiating the representation.
Projection of Weight Loss
The Commission's complaint also alleges that Formu-3 failed to
possess a reasonable basis for its claim, made during initial sales
presentations, that consumers will typically reach their desired
weight-loss goals within the time frame computed by Formu-3 personnel.
To address this practice, the proposed order (Part I.G.) prohibits
Formu-3 from representing that prospective participants will reach a
specified weight within a specified period of time, unless proposed
respondents possess and rely upon competent and reliable scientific
evidence substantiating the representation.
Price
The Commission's complaint against Forum-3 also alleges that Formu-
3 failed to disclose adequately to consumers the total price of the
diet program.
The proposed consent order seeks to address the practice in two
ways. First, Part I.I. of the proposed order prohibits Formu-3 from
advertising a daily, weekly or monthly price for its program unless it
also discloses: (1) the number of days, weeks or months participants
will be required to pay the advertised price; or (2) the total cost of
the weight loss program. Second, Part I.L. of the order prohibits
Formu-3 from misrepresenting the price of the program in any way.
Monitoring Practices
According to the complaint, Formu-3 provides its customers with
diet protocols that require customers to come in to one of proposed
respondents' centers three times per week for monitoring of their
progress, including weighing-in. In the course of regularly
ascertaining weight loss progress, respondents, in some instances, are
presented with weight loss results indicating that customers are losing
weight significantly in excess of their projected goals, which is an
indication that they may not be consuming all of the food prescribed by
their diet protocol. According to the complaint, such conduct could, if
not corrected promptly, result in health complications. In light of
this monitoring practice, the Commission's complaint alleges that
Formu-3 has failed to disclose to consumers who are losing weight
significantly in excess of their projected goals that failing to follow
the diet protocol and consume all of the food prescribed could result
in health complications.
The proposed consent order seeks to address the alleged monitoring
misrepresentation cited in the accompanying complaint in two ways.
First, the order (Part I.H.) requires Formu-3 to disclose in writing to
all participants when they enter the program, that failure to follow
the program protocol and eat all of the food recommended may involve
the risk of developing serious health complications. Second, the
proposed order (Part I.L.) generally prohibits any misrepresentation
concerning the safety of any weight loss program.
Certified Counselors
The Commission's complaint also charges that Formu-3 falsely
claimed counselors employed in its diet centers are certified by an
objective evaluation process in the treatment of obesity.
The order seeks to address this practice by prohibiting Formu-3
from misrepresenting the competence, training or expertise of any of
its employees or employees of its franchisees. (Part I.J.)
Benefits of Food Products
The complaint alleges that Formu-3 misrepresented the benefits to
dieters of the food products it sells. To remedy this practice, the
order (Part I.K.) prohibits respondents from misrepresenting the
existence or amount of calories, fat or any other nutrient or
ingredient in any food product, or the benefits of any such product.
Parts II. and III. of the order allow respondents to make claims
about food products and drugs that are specifically permitted in
labeling by regulations of the Food and Drug Administration or the
Department of Agriculture pursuant to statutes administered by those
agencies.
The purpose of this analysis is to facilitate public comment on the
proposed order, and 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. 95-2306 Filed 1-30-95; 8:45 am]
BILLING CODE 6750-01-M
