[Federal Register Volume 63, Number 95 (Monday, May 18, 1998)]
[Notices]
[Pages 27294-27296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13140]
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FEDERAL TRADE COMMISSION
[File No. 952-3235]
Bogdana Corporation, et al.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
[[Page 27295]]
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 July 17, 1998.
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:
Joel Winston, FTC/S-4002, Washington, D.C. 20580. (202) 326-3153.
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 May 12, 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, Sixth Street and Pennsylvania Avenue NW,
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 to a
proposed consent order from Bogdana Corporation; and Joseph L. Gruber
and Bogda Gruber, Individually and as officers of Bogdana Corporation.
The proposed consent order has been placed on the public record for
sixty (60) days for receipt 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 or make final the agreement's proposed order.
This matter involves alleged deceptive representations for two
dietary supplements: Cholestaway, capsules or wafers purported to lower
serum cholesterol; and Flora Source, a powdered supplement purported to
replace natural intestinal flora, thereby boosting the immune system
and providing other health benefits. Advertisements for the products
included 30-minute television infomercials, 30-minute radio
infomercials, 60-second television commercials, and catalogs.
According to the FTC complaint, by using the trade name
``Cholestaway,'' and through the advertisements, the respondents made
claims that Cholestaway: significantly lowers serum cholesterol levels;
significantly lowers serum cholesterol levels without changes in diet;
significantly lowers serum cholesterol levels and causes significant
weight loss even if users eat foods high in fat, including fried
chicken and pizza; substantially reduces or eliminates the body's
absorption of dietary fat; lowers low density lipoprotein cholesterol
and improves the high density lipoprotein cholesterol to low density
lipoprotein cholesterol ratio; is effective in the treatment of
hardening of the arteries and heart disease; causes significant weight
loss; causes significant weight loss without changes in diet;
significantly reduces blood triglyceride levels; significantly reduces
elevated blood pressure; and is scientifically proven to lower serum
cholesterol levels and reduce elevated blood pressure significantly;
and that testimonials from consumers appearing in the advertisements
for cholestaway reflect the typical or ordinary experience of members
of the public who use the product. The complaint alleges that the
respondents did not have a reasonable basis for any of these
representations at the time they were made.
The complaint also alleges that the respondents misrepresented
radio infomercials for Cholestaway to be independent radio programs
rather than commercial messages.
The complaint further alleges that the respondents made claims,
without a reasonable basis, that Flora Source: replaces the natural
intestinal flora that are lost due to illness, prescription drugs or
antibiotics, thereby reducing the risk of developing illnesses such as
chronic fatigue syndrome (Epstein-Barr syndrome) and other
immunosuppression diseases, including AIDS: improves the body's
absorption of nutrients, including B vitamins; enhances the body's
immune response and is effective in the treatment of immunosuppression
diseases, including AIDS; prevents weight gain; and is effective in the
prevention or treatment of anorexia and gastrointestinal disorders and
symptoms, including food sensitivities, constipation, diarrhea,
dyspepsia, abdominal pain, bloating and gas.
The consent order contains provisions designed to prevent the
respondents from engaging in similar acts and practices in the future.
Part I of the order prohibits the respondents from making the
representations about Cholestaway challenged in the complaint, unless
they possess and rely upon competent and reliable scientific evidence
that substantiates the representation. Part II of the order contains
similar provisions with regard to the challenged representations about
Flora Source.
Part III prohibits respondents from making any representation about
the efficacy, performance, safety or benefits of any food, dietary
supplement or drug unless they possess and rely upon competent and
reliable scientific evidence that substantiates the representation.
Part IV prohibits the respondents from using the name
``Cholestaway'' or any other name that represents that the product will
lower serum cholesterol levels unless they have substantiation.
Part V prohibits the respondents from misrepresenting the
existence, contents, validity, results, conclusions or interpretations
of any test, study, or research.
Part VI prohibits the respondents from representing that the
experience represented by a user testimonial or endorsement of the
product is the typical or ordinary experience of users of the product
unless the representation is substantiated or they disclose what the
generally expected results would be or that consumers should not expect
the same results.
Part VII prohibits the respondents from disseminating any
advertisement that misrepresents that it is not a paid advertisement,
and requires disclosures, during television ads fifteen minutes in
length or longer and radio ads five minutes or longer, that the program
is a paid advertisement.
Part VIII allows the respondents to make representations for any
drug that are permitted in labeling for that drug
[[Page 27296]]
under any tentative final or final Food and Drug Administration
(``FDA'') standard or under any new drug application approved by the
FDA.
Part IX allows the respondents to make representations for any
product that are specifically permitted in labeling for that product by
regulations issued by the FDA under the Nutrition Labeling and
Education Act of 1990.
Parts X through XII and XIV require the respondents to keep copies
of advertisements making representations covered by the order; to keep
records concerning those representations, including materials that they
relied upon when making the representations; to provide copies of the
order to certain of the corporate respondents' personnel; to notify the
Commission of changes in corporate structure; and to file compliance
reports with the Commission. Part XV provides that the order will
terminate after twenty (20) years under certain circumstances.
Part XIII requires that the Grubers notify the Commission of any
change in their business or employment.
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. 98-13140 Filed 5-15-98; 8:45 am]
BILLING CODE 6750-01-M
