[Federal Register Volume 59, Number 43 (Friday, March 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4964]
[[Page Unknown]]
[Federal Register: March 4, 1994]
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FEDERAL TRADE COMMISSION
[File No. 922-3290]
American Institute of Habit Control, 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, a Miami, Florida based company from
making any representation about the relative or absolute performance or
efficacy of any smoking cessation or weight loss program, unless they
possess and rely upon competent and reliable scientific evidence to
substantiate the representation.
DATES: Comments must be received on or before May 3, 1994.
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:
Matthew Daynard, FTC/H-200, Washington, DC 20580. (202) 326-3291.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 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
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(6)(ii)).
In the matter of American Institute of Habit Control, Inc., a
corporation, and Steven Present, individually and as an officer of
said corporation.
File No. 922 3290.
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of American Institute of Habit Control,
Inc., a corporation, and Steven Present, individually and as an officer
of said corporation (``proposed respondents'' or ``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 American Institute of Habit
Control, Inc., by its duly authorized officer, and Steven Present,
individually and as an officer of said corporation, and their attorney,
and counsel for the Federal Trade Commission that:
1. Proposed respondent American Institute of Habit Control, Inc.,
is a Florida corporation, with its principal office or place of
business at 9655 South Dixie Highway, Miami, Florida 33156.
2. Proposed respondent Steven Present is the sole officer, director
and shareholder of said corporation. He formulates, directs and
controls the acts and practices of said corporation and his address is
the same as that of said corporation.
3. Proposed respondents admit all the jurisdictional facts set
forth in the attached draft complaint.
4. 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;
and
(d) Any claim under the Equal Access to Justice Act, 5 U.S.C. 504.
5. 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 attached
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.
6. 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 here attached.
7. 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. 2.24 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 attached 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' address 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 order or the agreement may be used
to vary or contradict the terms of the order.
8. Proposed respondents have read the attached draft complaint and
the following 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
Definition
For the purposes of this Order, ``competent and reliable scientific
evidence'' shall men those 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
profession to yield accurate and reliable results.
I
It is ordered that respondents American Institute of Habit Control,
Inc., a corporation, its successors and assigns, and its officers, and
Steven Present, individually and as an officer and director of said
corporation, and respondents' agents, representatives and employees,
directly or through any corporation, subsidiary, division, or other
device, in connection with the advertising, promotion, offering for
sale, or sale of any smoking cessation program or weight loss program,
including any such program that uses hypnosis, in or affecting
commerce, as ``commerce'' is defined in the Federal Trade Commission
Act, do forthwith cease and desist from:
A. Representing, directly or by implication, that the U.S. Surgeon
General, in the 1989 U.S. Surgeon General's Report on Smoking, Reducing
the Health Consequences of Smoking: 25 Years of Progress, states that
the group hypnosis method used by respondents is one of the most
effective ways to stop smoking.
B. Representing, directly or by implication, that ninety-seven
percent of the participants who attend respondents' stop smoking
seminars permanently abstain from smoking after those seminars, unless
such is the case.
C. Making any representation, directly or any implication, about
the relative or absolute performance or efficacy of any smoking
cessation program or weight loss program, unless, at the time of making
any such representation, respondents possess and rely upon competent
and reliable scientific evidence substantiating the representation.
D. Misrepresenting, directly or by implication, the existence,
contents, validity, results, conclusions, or interpretations of any
test, study, survey or report.
E. Misrepresenting, directly or by implication, the performance or
efficacy of any smoking cessation program or weight loss program.
II
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.
III
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 corporate respondent 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.
IV
It is further ordered that the individual respondent named herein
shall promptly notify the Commission of the discontinuance of his
present business or of his affiliation with the corporate respondent.
In addition, for a period of three (3) years from the date of service
of this Order, the respondent shall promptly notify the Commission of
each affiliation with a new business or employment that involves a
smoking cessation program or a weight loss program. Each such notice
shall include the respondent's new business address and a statement of
the nature of the business or employment in which the respondent is
newly engaged as well as a description of the respondent's duties and
responsibilities in connection with the business or employment. The
expiration of the notice provision of this paragraph shall not affect
any other obligation arising under this Order.
V
It is further ordered that respondents shall distribute a copy of
this Order to each of its officers, agents, representatives,
independent contractors and employees who are involved in the
preparation and placement of advertisements or promotional materials;
and, for a period of three (3) years from the date of entry of this
Order, distribute same to all future such officers, agents,
representatives, independent contractors and employees.
VI
It is further ordered that respondents shall, within sixty (60)
days after the date of services of this Order, 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 to a
proposed consent order from American Institute of Habit Control, Inc.
(hereinafter ``AIHC'') and its President, Steven Present, marketers of
the Present Seminar, a single, two-and-a-half-hour, group hypnosis
session program for smoking cessation and weight loss. The Present
Seminar is offered to the public nationwide by Steven Present at hotel
locales.
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 (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) The likelihood of success in achieving the
and maintaining abstinence from smoking cigarettes and weight loss; and
(2) the effectiveness of proposed respondents' smoking cessation
methods in leading consumers to abstain from smoking, including the
effectiveness of proposed respondents' programs compared to other
smoking cessation programs.
Success
The complaint against AIHC and Steven Present alleges that the
proposed respondents made false claims and failed to possess a
reasonable basis for other claims they made regarding the success of
their seminar participants in quitting smoking and achieving and
maintaining weight loss.Through advertisements placed in various media
in advance of their seminars, proposed respondents represented that 97
percent of their seminar participants permanently abstain from smoking
after attending those seminars. The complaint alleges that this claim
is false.
Proposed respondents further represented through their
advertisements that seminar participants: (1) Are cured of smoking
addiction and permanently abstain from smoking cigarettes; (2) are
cured of smoking addiction without experiencing withdrawal, stress or
weight gain; and (3) achieve and maintain weight loss.
The Commission believes that these success claims for seminar
attendees' smoking cessation, weight loss and maintenance of achieved
weight loss are deceptive because proposed respondents at the time they
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 three ways.
First, the order (Part I.C.) requires proposed respondents to possess a
reasonable basis consisting of competent and reliable scientific
evidence substantiating any claim about the performance or efficacy of
any smoking cessation or weight loss program.
Second, the proposed order (Part I.B.) prohibits proposed
respondents from representing that 97 percent of their seminar
attendees permanently abstain from smoking after those seminars, unless
that is the case.
Finally, the proposed order (Part I.E.) generally prohibits
proposed respondents from misrepresenting the performance or efficacy
of any smoking cessation or weight loss program.
Efficacy
The Commission's complaint further alleges that proposed
respondents made false claims and failed to possess a reasonable basis
for other claims they made regarding relative ability of their hypnosis
program to lead consumers to quit smoking. AIHC and Steven Present
represented through their advertising that the U.S. Surgeon General, in
the 1989 U.S. Surgeon General's Report on Smoking, Reducing the Health
Consequences of Smoking; 25 Years of Progress, states that the group
hypnosis method used by respondents is one of the most effective ways
to stop smoking. The complaint alleges that this claim is false,
because the cited Report does not state that proposed respondents'
hypnosis method is one of the most effective ways to stop smoking.
Proposed respondents further represented through their
advertisements that their single-session, group hypnosis seminar is
more efficacious for smoking cessation than other smoking cessation
methods. The Commission believes that this comparative efficacy claim
for proposed respondents' hypnosis program is deceptive because
proposed respondents at the time they made the claim did not possess
adequate substantiation for the claim.
To address these efficacy misrepresentations, the proposed order
(Part I.A.) prohibits AIHC and Steven Present from representing that
the U.S. Surgeon General, in the 1989 U.S. Surgeon General's Report on
Smoking, Reducing the Health Consequences of Smoking: 25 Years of
Progress, states that the group hypnosis method used by respondents is
one of the most effective ways to stop smoking. The proposed order
(Part I.D.) further generally prohibits proposed respondents from
misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test, study, survey, or report.
Finally, the order (Part I.C.) requires proposed respondents to possess
and rely upon competent and reliable scientific evidence substantiating
any representation about the relative or absolute performance or
efficacy of any smoking cessation or weight loss program, before they
make such a claim.
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. 94-4964 Filed 3-3-94; 8:45 am]
BILLING CODE 6750-01-M
