[Federal Register Volume 63, Number 241 (Wednesday, December 16, 1998)]
[Notices]
[Pages 69293-69294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33284]
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FEDERAL TRADE COMMISSION
[File No. 9623270]
New Vision International 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 February 16, 1999.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 600 Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT:
Matthew Gold or Sylvia Kundig, San Francisco Regional Office, Federal
Trade Commission, 901 Market Street, Suite 570, San Francisco,
California 94103, (415) 356-5270.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(d) 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 December 8, 1998), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 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 New Vision
International, Inc., NVI Promotions, L.L.C., and their two principals,
Jason P. Boreyko and Benson K. Boreyko (hereinafter ``New Vision'' or
``respondents''). New Vision is a multi-level marketing company that
sells nutritional supplements. In a separate action, the Commission has
also accepted a similar agreement involving Max F. James, a distributor
of New Vision products.
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 any 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 has focused on New Vision's advertisements for a
regimen of nutritional supplements that they called ``God's Recipe.''
The advertisements claimed that God's Recipe could mitigate or cure the
effects of Attention Deficit Disorder or Attention Deficit
Hyperactivity Disorder.
The proposed complaint alleges that New Vision could not
substantiate the following claims: (1) that God's Recipe can cure,
prevent, treat or mitigate Attention Deficit Disorder or its symptoms;
(2) that God's Recipe can cure, prevent, treat or mitigate Attention
Deficit Hyperactivity Disorder or its symptoms; (3) that God's Recipe
is an effective alternative treatment to the prescription drug Ritalin
for Attention Deficit Disorder and Attention Deficit Hyperactivity
Disorder; and (4) that testimonials from consumers appearing in the
advertisements for God's Recipe reflect the typical or ordinary
experience of members of the public whose children have used the
product.
Part I of the proposed consent order prohibits New Vision, when
advertising God's Recipe or any other food, drug or dietary supplement,
from making claims (1) through (3), above, unless the claim is
substantiated at the time it is made. Part II of the proposed order
addresses claims made through endorsements or
[[Page 69294]]
testimonials. Under Part II, respondents may make such representations
if they possess and rely upon competent and reliable evidence that
substantiates the representations; or the respondents must disclose
either what the generally expected results would be for users of the
advertised products, or the limited applicability of the endorser's
experience to what consumers may generally expect to achieve. The
proposed order's treatment of testimonial claims is in accordance with
the Commission's ``Guides Concerning Use of Endorsements and
Testimonials in Advertising,'' 16 CFR 255.2(a).
Part III of the proposed order prohibits respondents from making
unsubstantiated claims about the safety of any food, drug or dietary
supplement, or about the ability of such product to treat, cure,
alleviate the symptoms of, prevent, or reduce the risk of developing
any disease or disorder. Part IV of the proposed order contains
language permitting New Vision to make drug claims that have been
approved by the FDA pursuant to either a new drug application or a
tentative final or final standard. Part V states that New Vision would
be permitted to make claims that the FDA has approved pursuant to the
Nutrition Labeling and Education Act of 1990.
Part VI of the proposed order requires New Vision to retain, and
make available to the Commission upon request, all advertisements and
promotional materials containing any representation covered by the
order, as well as any materials that it relied upon in disseminating
the representation and any materials that contradict, qualify, or call
into question the representation.
Parts VII and VIII of the proposed order require New Vision to
distribute the order to relevant parties. Part VII requires New Vision
to distribute a copy of the order to all current and future principals,
officers, directors, and managers, and to any employee, agent or
representative with responsibilities under the order. Part VIII.A
requires the company to distribute a letter, attached to the order as
Appendix A, to each current active distributor. Part VIII.B requires
the company to distribute a letter, attached to the order as Appendix
B, to future distributors for a period of five years. These
substantially similar letters state that no distributor may make any
claim regarding the therapeutic or curative properties of New Vision
products unless she has received prior approval from New Vision. The
letters also state that all distributor advertising must either be
obtained from New Vision or pre-approved by New Vision. In addition,
the letters state that failure to conform to these requirements will be
grounds for suspension or termination.
Part IX of the proposed New Vision order contains some additional
requirements in recognition of the fact that, as a multi-level
marketing company, New Vision's contact with consumers is made almost
exclusively through a network of distributors who are not covered by
the order. For example, Part IX.A.1 would require the company to compel
its distributors to submit all advertising to the company for pre-
approval. Part IX.A.2 would require New Vision to establish a mechanism
for suspending or terminating business dealings with any distributor
who fails to submit advertising for pre-approval. Part IX.A.3 would
require New Vision to send to each active distributor a notice, every
six months, reminding them of the pre-approval requirement. To ensure
that the company remains abreast of its distributor's marketing efforts
over the Internet, Part IX.A.4 would require New Vision to conduct a
monthly search of the World Wide Web for independent distributor
advertising.
Part IX.B of the proposed order would require New Vision to police
to distributors and investigate complaints that any distributor may be
violating the order. Part IX.C would require New Vision to discontinue
dealing with any distributor once respondents obtain actual knowledge,
or knowledge fairly implied on the basis of objective circumstances,
that the distributor is making a representation that is prohibited by
the order, unless that person immediately ceases such activity. If New
Vision learns that the distributor has not permanently ceased making
representations prohibited by the order, New Vision must immediately
discontinue its dealings with the distributor.
The remainder of the proposed New Vision order contains standard
requirements that the corporate respondents notify the Commission of
any changes in corporate structure that might affect compliance with
the order, that the individual respondents notify the Commission of
changes in their employments status, and that New Vision file one or
more reports detailing their compliance with the order.
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.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-33284 Filed 12-15-98; 8:45 am]
BILLING CODE 6750-01-M
