[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Notices]
[Pages 5932-5935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2308]
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FEDERAL TRADE COMMISSION
[File No. 932 3343]
Ninzu, 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
require, among other things, the Maryland-based marketers to possess
and rely upon competent and reliable scientific substantiating evidence
to support any performance, benefits, efficacy, or safety claims they
make for any weight loss or weight control product or program or any
acupressure device they market 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 Street and Pennsylvania Avenue NW., Washington, DC 20580.
for further information contact: Brian Dahl, FTC/S-4002, Washington, DC
20580. (202) 326-3182.
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)).
United States of America Before Federal Trade Commission
In the matter of Ninzu, Inc., Davish Merchandising, Inc., Order
By Phone, Inc., corporations, and Michael B. Metzger, individually
and as an officer and director of said corporations, File No. 932
3343.
Agreement containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Ninzu, Inc., Davish Merchandising, Inc.
d/b/a Davish Enterprises and Davish Health Products, and Order By
Phone, Inc. d/ [[Page 5933]] b/a Auricle Clip, Inc., corporations; and
Michael B. Metzger, individually and as an officer and director of said
corporations, hereinafter sometimes referred to as proposed
respondents, and it now is 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 Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc., by their
duly authorized officer; and Michael B. Metzger, individually and as an
officer and director of said corporations, and counsel for the Federal
Trade Commission that:
1. Proposed respondent Ninzu, Inc. is a corporation organized,
existing and doing business under and by virtue of the laws of the
State of Maryland, with its office and principal place of business
located at 1 East Chase Street, Suite 200, in the City of Baltimore,
State of Maryland.
Proposed respondent Davish Merchandising, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Maryland, with its office and principal place of
business located at 1 East Chase Street, Suite 200, in the City of
Baltimore, State of Maryland.
Proposed respondent Order By Phone, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Maryland, with its office and principal place of
business located at 1 East Chase Street, Suite 200, in the City of
Baltimore, State of Maryland.
Proposed respondent Michael B. Metzger is an officer and director
of said corporations. He formulates, directs and controls the policies,
acts and practices of said corporations. He resides at 12135 Heneson
Garth, Owings Mills, Maryland.
2. Proposed respondents admit all the jurisdictional facts set
forth in the draft of 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 of
complaint contemplated thereby, 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. The 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. The 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, (1) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following order to cease and desist in disposition of the proceeding
and (2) 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 might 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 order or in the agreement may be
used to vary or contradict the terms of the order.
7. Proposed respondents have read the proposed complaint and order
contemplated hereby. They 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
For the purposes of this Order:
1. ``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 personal qualified to do so, using
procedures generally accepted in the profession to yield accurate and
reliable results.
2. ``Acupressure device'' shall mean any product, program, or
service that is intended to function by means of the principles of
acupressure.
I
It Is Ordered that respondents, Ninzu, Inc., Davish Merchandising,
Inc. d/b/a Davish Enterprises and Davish Health Products, and Order By
Phone, Inc. d/b/a Auricle Clip, Inc., corporations, their successors
and assigns, and their officers; Michael B. Metzger, individually and
as an officer and director of said corporations; and respondents'
agents, representatives and employees, directly or through any
partnership, corporation, subsidiary, division or other device, in
connection with the advertising, packaging, labeling, promotion,
offering for sale, sale or distribution of the Ninzu, Auricle Clip, B-
Trim or any other acupressure device in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from representing, in any manner, directly
or by implication, that
A. Such product causes significant weight loss;
B. Such product causes significant weight loss without the need to
diet or exercise;
C. Such product controls appetite, eliminates a person's craving
for food, or causes weight loss without the user feeling hungry; or
D. Such product is scientifically proven to cause significant
weight loss and control appetite.
II
It Is Further Ordered that respondents, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc.,
corporations, their successors and assigns, and their officers; Michael
B. Metzger, individually and as an officer and director of said
corporations; and respondents' agents, representatives and employees,
directly or through any partnership, corporation, subsidiary, division
or other device, in connection [[Page 5934]] with the advertising,
packaging, labeling, promotion, offering for sale, sale or distribution
of any weight-loss or weight-control product or program or any
acupressure device in or affecting commerce, as ``commerce'' is defined
in the Federal Trade Commission Act, do forthwith cease and desist from
making any representation, directly or by implication, regarding the
performance, benefits, efficacy, or safety of such product, program, or
device unless such representation is true and unless, at the time of
making such representation, respondent possess and rely upon competent
and reliable scientific evidence that substantiates the representation.
III
It Is Further Ordered that respondents, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health Products
and Order By Phone, Inc. d/b/a Auricle Clip, Inc., corporations, their
successors and assigns, and their officers; Michael B. Metzger,
individually and as an officer and director of said corporations; and
respondents' agents, representatives and employees, directly or through
any partnership, corporation, subsidiary, division or other device, in
connection with the advertising, packaging, labeling, promotion,
offering for sale, sale or distribution of any weight-loss or weight-
control product or program or any acupressure device in or affecting
commerce, as ``commerce'' is defined in the Federal Trade Commission
Act, do forthwith cease and desist from representing, directly or by
implication, that any endorsement (as ``endorsement'' is defined in 16
C.F.R. Sec. 255.0(b) of the product, program, or device represents the
typical of ordinary experience of members of the public who use the
product, program, or device unless this is the case.
IV
It Is Further Ordered that respondents, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc.,
corporations, their successors and assigns, and their officers; Michael
B. Metzger, individually and as an officer and director of said
corporations; and respondents' agents, representatives and employees,
directly or through any partnership, corporation, subsidiary, division
or other device, in connection with the advertising, packaging,
labeling, promotion, offering for sale, sale or distribution of any
weight-loss or weight-control product or program or any acupressure
device in or affecting commerce, as ``commerce'' is defined in the
Federal Trade Commission Act, do forthwith cease and desist from
misrepresenting, in any manner, directly or by implication, the
contents, validity, results, conclusions, or interpretations of any
test or study.
V
It Is Further Ordered that for five (5) 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 or its staff 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, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc. shall:
A. Within thirty (30) days after service of this Order, provide a
copy of this Order to each of respondents' current principals,
officers, directors and managers, and to all personnel, agents, and
representatives having sales, advertising, or policy responsibility
with respect to the subject matter of this Order; and
B. For a period of five (5) years from the date of issuance of this
Order, provide a copy of this Order to each of respondents' future
principals, officers, directors, and managers, and to all personnel,
agents, and representatives having sales, advertising, or policy
responsibility with respect to the subject matter of this Order who are
associated with respondents or any subsidiary, successor, or assign,
within three (3) days after the person assumes his or her position.
VII
It Is Further Ordered that respondents, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order by Phone, Inc. d/b/a Auricle Clip, Inc., shall
notify the Federal Trade Commission at least thirty (30) days prior to
any proposed change in their corporate structures, including but not
limited to dissolution, assignment, or sale resulting in the emergence
of a successor corporation, the creation or dissolution of subsidiaries
or affiliates, the planned filing of a bankruptcy petition, or any
other corporate change that may affect compliance obligations arising
out of this Order.
VIII
It Is Further Ordered that respondent, Michael B. Metzger, shall,
for a period of five (5) years from the date of issuance of this Order,
notify the Commission within thirty (30) days of the discontinuance of
his present business or employment and of his affiliation with any new
business or employment. Each notice of affiliation with any new
business or employment shall include respondent's new business address
and telephone number, current home address, and a statement describing
the nature of the business or employment and his duties and
responsibilities.
IX
It Is Further Ordered that respondents, Ninzu, Inc., Davish
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health
Products, and Order by Phone, Inc. d/b/a Auricle Clip, Inc.,
corporations, and Michael B. Metzger, individually and as an officer
and director of said corporations, shall, within sixty (60) days after
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.
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 proposed respondents
Ninzu, Inc. d/b/a Davish Enterprises and Davish Health Products, Davish
Merchandising, Inc., Order By Phone, Inc. d/b/a Auricle Clip, Inc., and
Michael B. Metzger.
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 advertising related to the sale of an
acupressure device, marketed under the names Ninzu, Auricle Clip, and
B-Trim, which [[Page 5935]] clips onto the ear. The Commission's
Complaint charges that proposed respondents Ninzu, Inc. d/b/a Davish
Enterprises and Davish Health Products, Davish Merchandising, Inc.,
Order By Phone, Inc. d/b/a Auricle Clip, Inc., and Michael B. Metzger
falsely represented that: (1) The Ninzu, the Auricle Clip, and the B-
Trim cause significant weight loss; (2) the Ninzu causes significant
weight loss without the need to diet or exercise; (3) the Auricle Clip
causes significant weight loss without the need to diet; (4) the Ninzu
controls appetite and eliminates a person's craving for food; (5) the
Auricle Clip controls appetite; and (6) the B-Trim reduces the user's
craving for food and causes weight loss without the user feeling
hungry.
The Complaint also alleges that proposed respondents falsely and
misleadingly represented that they possessed and relied upon a
reasonable basis when they made those claims. The Complaint further
alleges that proposed respondents falsely represented that the Ninzu
and Auricle Clip are scientifically proven to cause significant weight
loss and control appetite. Finally, the Complaint alleges that proposed
respondents falsely represented that testimonials from consumers
appearing in advertisements for the Ninzu reflect the typical or
ordinary experience of members of the public who have used the Ninzu.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the proposed respondents from
engaging in similar acts in the future.
Part I of the proposed order prohibits proposed respondents from
representing that the Ninzu, Auricle Clip, B-Trim, or any other
acupressure device: (1) Causes significant weight loss; (2) causes
significant weight loss without the need to diet or exercise; (3)
controls appetite, eliminates a person's craving for food, or causes
weight loss without the user feeling hungry; or (4) is scientifically
proven to cause significant weight loss and control appetite. The order
defines ``acupressure device'' as ``any product, program, or service
that is intended to function by means of the principles of
acupressure.'' Part II requires proposed respondents to possess
competent and reliable scientific evidence before making
representations regarding the performance, benefits, efficacy, or
safety of any weight-loss or weight-control product or program or any
acupressure device. Part III prohibits proposed respondents from
falsely claiming that endorsements or testimonials for any weight-loss
or weight-control product or program or any acupressure device
represent the typical or ordinary experience of members of the public
who use the product, program, or device. Part IV prohibits proposed
respondents from misrepresenting the results of tests or studies for
any weight-loss or weight-control product or program or any acupressure
device.
Part V requires proposed respondents to maintain, for five (5)
years, all materials that support, contradict, qualify, or call into
question any representations they make which are covered by the
proposed order. Part VI requires proposed respondents Ninzu, Inc. d/b/a
Davish Enterprises and Davish Health Products, Davish Merchandising,
Inc., and Order By Phone, Inc. d/b/a Auricle Clip, Inc. to distribute a
copy of the order to current and future principles, officers,
directors, and managers, as well as to any employees having sales,
advertising, or policy responsibility with respect to the subject
matter of the order. Under Part VII of the proposed order, proposed
respondents Ninzu, Inc. d/b/a Davish Enterprises and Davish Health
Products, Davish Merchandising, Inc., and Order By Phone, Inc. d/b/a
Auricle Clip, Inc. shall notify the Federal Trade Commission at least
thirty (30) days prior to any proposed change in their corporate
structures that may affect compliance with the order's obligations.
Part VIII requires that proposed respondent Metzger, for a period of
five (5) years, notify the Commission of any change in his business or
employment. Part IX obliges proposed respondents to file compliance
reports with the Commission.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not 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. 95-2308 Filed 1-30-95; 8:45 am]
BILLING CODE 6750-01-M
