[Federal Register Volume 59, Number 105 (Thursday, June 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13286]
[[Page Unknown]]
[Federal Register: June 2, 1994]
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FEDERAL TRADE COMMISSION
[File Nos. 912 3248; 912 3295; 922 3001; 922 3002]
Beverly Hills Weight Loss Clinics International, Inc.; Doctors
Medical Weight Loss Centers, Inc., et al.; Quick Weight Loss Centers,
Inc., et al. (Texas); Quick Weight Loss Centers, Inc., et al.
(Georgia); Proposed Consent Agreements With Analysis To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreements.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, the four
consent agreements, accepted subject to final Commission approval,
would prohibit, among other things, four commercial diet program
companies and their officers from misrepresenting the performance or
safety of any diet program they offer in the future, and would require
the respondents to possess competent and reliable scientific evidence
to substantiate any future claims they make about weight loss, weight
loss maintenance, or rate of weight loss; to make a number of
disclosures regarding maintenance success claims; and to disclose all
mandatory fees.
.DATES: Comments must be received on or before August 1, 1994.
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:Richard Kelly or Eric Bash, FTC/H-200,
Washington, DC 20580. (202) 326-3304 or 326-2892 or Gary Cooper, FTC/
Boston Regional Office, 101 Merrimac St., suite 810, Boston, MA. 02114-
4719. (617) 424-5960.
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 agreements containing consent orders
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, have 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 Beverly Hills Weight Loss Clinics
International, Inc., a corporation. File No. 912-3248.
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Beverly Hills Weight Loss Clinics
International, Inc., a corporation (``proposed respondent''), and it
now appearing that proposed respondent is 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 Beverly Hills Weight Loss
Clinics International, Inc., by its duly authorized officers, and its
attorneys, and counsel for the Federal Trade Commission that:
1. Proposed respondent Beverly Hills Hills Weight Loss Clinics
International, Inc. (``Beverly Hills''), is a Virginia corporation,
with its office and principal place of business located at 200
Highpoint Avenue, suite B-5, Portsmouth, Rhode Island 02871.
2. Proposed respondent admits all the jurisdictional facts set
forth in the attached draft complaint.
3. Proposed respondent waives:
(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 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 respondent, 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 respondent of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of complaint here attached.
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
respondent: (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 pubic 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
respondent's address as stated in this agreement shall constitute
service. Proposed respondent waives any right it 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.
7. Proposed respondent has read the attached draft complaint and
the following order. Proposed respondent understands that once the
order has been issued, it was be required to file one or more
compliance reports showing that it has fully complied with the order.
Proposed respondent further understands that it 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 those
tests, analyses, research, studies, or other evidence 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 large 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 smaller 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 respondent, Beverly Hills Weight Loss Clinics
International, Inc., a corporation, its successors and assigns, and its
officers, and respondent's 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, respondent possesses and relies 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 of respondent's 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 respondent discloses, clearly and prominently, and
in close proximity to such representation, the statement: ``For many
dieters, weight loss is temporary.''; provided further, that respondent
shall not represent, directly or by implication, that the above-quoted
statement does not apply to dieters in respondent's 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 respondent discloses,
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 respondent's programs:
(a) The proportion of the total participant population in
respondent's programs that those participants represent, expressed in
terms of a percentage or actual numbers of participants, or
(b) The statement: ``Beverly Hills makes no claim that this [these]
result[s] is [are] representative of all participants in the Beverly
Hills program.'';
Provided, further, that compliance with the obligations of this
paragraph I.C. in no way relieves respondent 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.
D. Representing, directly or by implication, in short broadcast
advertisements, that participants of any weight loss program have
successfully maintained weight loss, unless respondent:
(1) Includes, clearly and prominently, and in immediate conjunction
with such representation, the statement: ``Check at our clinics 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, complies 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 respondent:
(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) (Date)
(b) require each potential client to sign such document; and
(c) give each client a copy of such document; and
Provided, however, that if any potential participant who does not
then participate in the program refuses to sign or accept a copy of
such document, respondent shall so indicate on such document and shall
not, for that reason alone, be found in breach of this subparagraph
I.D.(2); 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 respondent 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) respondent must comply with both paragraph I.D. and paragraph
I.C. of this Order if respondent includes 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 respondent's weight loss programs if the
weight loss success or weight loss maintenance success depicted in the
advertisement is not representative of what participants in
respondent's weight loss programs generally achieve, unless respondent
discloses, 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 Beverly Hills
customers in losing weight or maintaining achieved weight loss;
provided, however, that in determining the generally expected success
for Beverly Hills customers respondent 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,
respondent can satisfy the requirements of subparagraph I.E. (1) by
accurately disclosing the generally expected success in the following
phrase: ``Beverly Hills 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, respondent may substitute a clear
and prominent disclosure of the percentage of all of respondent's
customers that the group or subset defined in the advertisement
represents.
F. Representing, directly or by implication, that the price at
which any weight loss program can be purchased is the only cost
associated with losing weight on that program, unless such is the case.
G. Representing, directly or by implication, the price at which any
weight loss program can be purchased, unless respondent discloses,
clearly and prominently, either:
(1) In close proximity to such representation, the existence and
amount of all mandatory costs or fees associated with the program
offered; or
(2) in immediate conjunction with such representation, one of the
following statements:
(a) ``Plus the cost of [list of products or services that
participants must purchase at additional cost].''
(b) ``Purchase of [list of products or services that participants
must purchase at additional cost] required.'';
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.
H. Representing, directly or by implication, that any weight loss
program or services can be obtained for free, unless respondent
discloses, clearly and prominently, either (1) in close proximity to
such representation, the existence and amount of all mandatory fees
associated with the free offer; or (2) in immediate conjunction with
such representation, the following statement: ``You must pay for [list
of products or services that participants must purchase at additional
cost] to take advantage of this free offer.''; provided, further, that
in broadcast media, if the representation that triggers the disclosure
is oral, the disclosure required by either (1) or (2) of this paragraph
must also be made orally.
I. Failing to disclose over the telephone, for a period of time
beginning with the date of any advertisement of the price at which any
weight loss program can be purchased and ending no sooner that 180 days
after the last dissemination of any such advertisement, to consumers
who inquire about the cost of any weight loss program or are told about
the cost of any weight loss program, the existence and amount of any
mandatory costs or fees associated with participation in the program;
provided, however, that respondent may satisfy this requirement by
directing its weight loss centers to disclose the information, by
providing the center personnel with suggested language to be used when
responding to telephone inquiries and by making its best efforts to
ensure compliance with its directive to disclose price information over
the telephone.
J. 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, respondent possesses and relies upon
competent and reliable scientific evidence substantiating the
representation.
K. Representing, directly or by implication, that participants or
prospective participants in respondent's weight loss programs have
reached or will reach a specified weight within a specified time
period, unless at the time of making such representation, respondent
possesses and relies upon competent and reliable scientific evidence
substantiating the representation.
L. Making comparisons between the efficacy of respondent's weight
loss program(s) and the efficacy of any other weight loss and/or diet
program(s), unless at the time of making such representation,
respondent possesses and relies upon a competent and reliable
scientific study or survey substantiating the representation.
M. Making comparisons between the safety of respondent's weight
loss program(s) and the safety of any other weight loss and/or diet
program(s), unless at the time of making such representation,
respondent possesses and relies upon competent and reliable scientific
evidence substantiating the representation.
N. 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 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.
O. Misrepresenting, directly or by implication, the existence,
contents, validity, results, conclusions, or interpretations of any
test or study.
P. Misrepresenting, directly or by implication, the performance,
efficacy, or safety of any weight loss program or weight loss product.
II
It is further ordered that respondent 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.
III
It is further ordered that for three (3) years after the last date
of dissemination of any representation covered by this Order,
respondent, or its 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 its possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
IV
It is further ordered that respondent shall distribute a copy of
this Order to each of its officers, agents, representatives,
independent contractors and employees, who is 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.
V
It is further ordered that:
A. Respondent shall distribute a copy of this Order to each of its
franchisees 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 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 other
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 favorable or
license agreement and applicable state law to bring about a cessation
of that conduct by the franchisee or licensee.
VI
It is further ordered that respondent 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 Beverly Hills Weight Loss Clinics
International, Inc., (hereinafter ``Beverly Hills''), marketer of the
Beverly Hills low-calorie diet (hereinafter ``LCD'') program. The
Beverly Hills diet program is offered to the public in the eastern
United States through company-owned and franchised clinics.
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 respondent
deceptively advertised: (1) Its LCD program's success in helping
customers achieve and maintain weight loss; (2) the typical rate or
speed at which customers will lose weight; (3) the time frame within
which customers will achieve their desired weight loss goal; (4) the
safety of the Beverly Hills program in comparison to other weight loss
programs; (5) the purchase price of the Beverly Hills program; and (6)
the terms of the company's offers of free weight loss services. The
complaint further alleges that Beverly Hills engaged in the deceptive
practice of failing to warn clients it monitors of the health
importance of following the diet instructions.
Success
The complaint against Beverly Hills 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, Beverly Hills represented that its customers typically
are successful in reaching their weight loss goals and in maintaining
their weight loss achieved under the Beverly Hills diet program either
long-term or permanently.
The Commission believes that these success claims for customer
weight loss and maintenance of achieved weight loss are deceptive
because at the time it made the claims Beverly Hills 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 evidence of participants
who were followed for a period of at least two years after their
completion of the respondent's program, including any periods of
participation in respondent's 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 respondent 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 that program,
the proportion of the total participant population that those
participants represent, expressed in terms of a percentage or actual
numbers of participants--e.g. ``Participants on maintenance--30% of our
clients--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: ``Beverly Hills makes no claim that this
result is representative of all participants in the Beverly Hills
program.''
Third, for maintenance success claims made in broadcast
advertisements of thirty seconds or less duration, the proposed order
(part I.D.) requires that Beverly Hills, 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.
The proposed order makes clear that this alternative disclosure
requirement does not relieve Beverly Hills 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 broadcast advertising if Beverly
Hills 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.'' Beverly Hills 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 Beverly Hills idet program participants generally achieve, the
order (part I.E.) requires that Beverly Hills disclosure either what
the generally expected success would be for Beverly Hills 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 of Endorsements and Testimonials
in Advertising'' 16 CFR 255.2(a). Under the proposed order, Beverly
Hills may satisfy the requirements of the first disclosure concerning
generally expected success by accurately disclosing those facts in the
following format: ``Beverly Hills clients lose an average of ____
pounds over an average ____-week treatment period.''
Finally, the proposed order (part I.P.) generally prohibits the
company from misrepresenting the performance or efficacy of any weight
loss program.
Rate of Weight Loss
The Commission's complaint further alleges that Beverly Hills
failed to possess a reasonable basis for claims it made concerning the
average rate of weight loss for participants in its program. The
proposed consent order addresses this practice (part I.J.) by
prohibiting Beverly Hills from representing that participants in its
programs will lose weight at an average or typical rate or speed,
unless Beverly Hills possesses and relies upon competent and reliable
scientific evidence substantiating the representation.
Projection of Weight Loss
The Commission's complaint further alleges that Beverly Hills
failed to possess a reasonable basis for its claim made during initial
sales presentations that consumers will typically reach their desired
weight-loss goal within the time frame computed by Beverly Hills
personnel. To address this practice, the proposed order (part I.K.)
prohibits Beverly Hills from representing that participants or
prospective participants will reach a specified weight within a
specified period of time, unless proposed respondent possesses and
relies upon competent and reliable scientific evidence substantiating
the representation.
Comparative Safety Claim
The Commission's complaint further alleges that Beverly Hills
failed to possess a reasonable basis for its claim that its weight loss
programs are safer than other weight loss programs that do not include
essential fatty acid supplementation. The proposed order seeks to
address this practice in two ways. First, part I.M. requires the
company to have competent and reliable scientific evidence
substantiating any claim that compares the safety of its weight loss
program with that of any other weight loss or diet program. Second,
part I.P. of the proposed order prohibits the company from
misrepresenting, among other things, the safety of any weight loss
program or weight loss product.
Monitoring Practices
According to the complaint, Beverly Hills provides its customers
with diet instructions that require the customers to come in to one of
the proposed respondent's centers three times a week for monitoring of
their progress, including weighing in. In the course of regularly
ascertaining weight loss progress, respondent, in some instances, is
presenting 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 instructions. 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 Beverly Hills has failed to disclose to
consumers who are losing weight significantly in excess of their
projected goals that failing to follow the diet instructions 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.N.) requires Beverly Hills to disclose in
writing to all participants when they enter the program, that failure
to follow the program instructions and eat all of the food recommended
may involve the risk of developing serious health complications.
Second, the proposed order (part I.P.) generally prohibits any
misrepresentation concerning the safety of any weight loss program.
Price
The Commission's complaint against Beverly Hills also alleges that
the company falsely represented that the price it advertised far its
diet program is the only cost associated with losing weight on the diet
program, when, in fact, there are substantial additional mandatory
expenses that far exceed the advertised price. The complaint further
alleges that Beverly Hills failed to disclose adequately to consumers
the existence and amount of all mandatory expenses associated with
participation in the diet program.
The proposed consent order seeks to address these practices in
three ways. First, part I.F. of the proposed order prohibits untrue
representations that an advertised price for a weight loss program is
the only cost associated with losing weight on that program. Second,
for any advertisement containing a price at which any weight loss
program can be purchased, the proposed order (part I.G.) requires
Beverly Hills to disclose either the existence and amount of all
mandatory costs or fees associated with the program offered or a
statement identifying a list of all products or services that
participants must purchase at an additional cost. This disclosure must
be made orally under the proposed order if the price representation is
made orally under the proposed order if the free offer is made orally
in broadcast media.
Finally, the proposed order (part I.I.) requires the proposed
respondent to disclose over the telephone to callers who inquire or are
told about the cost of any weight loss program, the existence and
amount of any mandatory costs or fees associated with participation in
the program. Under the order, Beverly Hills can satisfy this
requirement by: (1) Providing the center personnel with suggested
language to be used when responding to telephone inquiries; and (2)
making its best efforts to ensure compliance with its directive to
disclose price information over the telephone.
Fee Offers
The Commission's complaint also alleges that, through offers of
free weight loss services, Beverly Hills falsely represented that its
weight loss programs were being offered to consumers at no cost. The
complaint further alleges that the company failed to disclose
adequately to consumers that the receipt of free weight loss services
is contingent upon the purchase, at substantial expense to the
consumer, of other goods or services that are mandatory for
participation in the company's weight loss programs.
The proposed consent order (part I.H.) seeks to address this
practice by requiring that the company disclose either (1) the
existence and amount of all mandatory fees associated with the free
offer, or (2) a list of all products or services that participants must
purchase at an additional cost to take advantage of the free offer.
This disclosure must be made orally under the proposed order if the
free offer is made orally in broadcast media.
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.
In the matter of Doctors Medical Weight Loss Centers, Inc., a
corporation, Doctors Weight Loss Centers, Inc., a corporation, and
Joyce A. Schuman, individually and as an officer of said
corporation. File No. 912 3295.
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Doctors Medical Weight Loss Centers, Inc.
(``DMWLC''), a corporation, Doctors Weight Loss Centers, Inc.
(``DWLC''), a corporation, and Joyce A. Schuman, individually and as an
officer of said corporations, and it now appearing, that DMWLC, a
corporation, DWLC, a corporation, and Joyce A. Schuman, individually
and as an officer of said corporation (hereinafter, collectively,
``proposed respondents'' or ``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 DMWLC and DWLC, by their duly
authorized officers, Joyce A. Schuman, and counsel for the Federal
Trade Commission, that:
1. Proposed respondents DMWLC and DWLC are corporations organized,
existing and formerly doing business under and by virtue of the laws of
the State of Florida, with their offices and principal place of
business located at 5479 A North Federal Highway, Fort Lauderdale,
Florida 33309.
2. Proposed respondent Joyce A. Schuman is an individual with her
principal residence located at 2730 Sea Island Drive, Fort Lauderdale,
Florida 33301.
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;
(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. 2.34 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 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' addresses as stated in this agreement shall constitute
service. Proposed respondents waive any right they may have to any 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
Definitions
For the purposes of this Order, the following definitions shall
apply:
A. Competent and reliable scientific evidence shall mean those
tests, analyses, research, studies, or other evidence based on the
expertise of professionals in the relevant area, that have 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;
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 print media 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 and 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 smaller 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 DMWLC, a corporation, DWLC, a
corporation, their successors and assigns, and their officers, and
Joyce A. Schuman, individually and as an officer of said corporations,
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 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 of respondents' 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 on 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: ``[Doctors Medical Weight Loss Centers/Doctors
Weight Loss Centers] makes no claim that this [these] result[s] is
[are] representative of all participants in the [Doctors Medical Weight
Loss Centers/Doctors 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 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 point bold,
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold),
acknowledgment language (Times Roman 12 point), 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.
----------------------------------------------------------------------
(Client Signature) (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;
(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'';
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 of
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 DMWLC/DWLC
customers in losing weight or maintaining achieved weight loss;
provided, however, that the generally expected success for DMWLC/DWLC
customers 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;
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: ``Doctors Medical Weight Loss Centers, Inc./Doctors Weight Loss
Centers, Inc. participants 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
subparagraphs 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, that the price at
which any weight loss program can be purchased is the only cost
associated with losing weight on that program, unless such is the case.
G. Representing, directly or by implication, the price at which any
weight loss program can be purchased, unless respondents disclose,
clearly and prominently, either:
(1) In close proximity to such representation, the existence and
amount of all mandatory fees associated with the program offered; or
(2) In immediate conjunction with such representation, one of the
following statements:
(a) ``Plus the cost of [list of products or services that
participants must purchase at additional cost]''; or
(b) ``Purchase of [list of products or services that participants
must purchase at additional cost] required'';
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.
H. Failing to disclose over the telephone, for a period beginning
with the date of any advertisement of the price at which any weight
loss program can be purchased and ending no sooner than 180 days after
the last dissemination of such advertisement, to consumers who inquire
about the cost of any weight loss program, or are told about the cost
of any weight loss program, the existence and amount of any and all
mandatory costs or fees associated with participation in the program;
provided, however, that respondents may satisfy this requirement by
directing their weight loss centers to disclose the information, by
providing the center personnel with suggested language to be used when
responding to phone inquiries and by making their best efforts to
ensure compliance with their directive to disclose price information
over the telephone.
I. Representing, directly or by implication, that prospective
participants in respondents' weight loss programs 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.
J. Representing, directly or by implication, the average or typical
rate or speed at which any participant on any weight loss program has
lost or will lose weight, unless at the time of making any such
representation, respondents possess and rely upon competent and
reliable scientific evidence that substantiates the representation.
K. 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 consecutive weeks, or (2) 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.
L. Misrepresenting, directly or by implication, the performance,
efficacy, or safety of any weight loss program.
II
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 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(s) that may affect compliance obligations arising out of
this Order.
III
It is further ordered that respondent Joyce A. Schuman shall
promptly notify the Commission of the discontinuance of her present
business or employment and of her affiliation with a new business or
employment. In addition, for a period of three (3) years from the
service date of this Order, the individual respondent shall promptly
notify the Commission of each affiliation with a new business or
employment whose activities relate to the advertising, promotion,
offering for sale, or sale of any weight loss program. When so required
under this paragraph, each such notice shall include the individual
respondent's new business address and a statement of the nature of the
business or employment in which the individual respondent is newly
engaged, as well as a description of the individual 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.
IV
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 possessed and relied upon to substantiate any 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.
V
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 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 service of this Order, file with the Commission
a report, in writing, setting forth in detail the manner and from in
which they have complied with this Order.
File No. 922 3001.
In the matter of Quick Weight Loss Centers, Inc., a Texas
corporation, Don K. Gearheart, individually and as an officer of
said corporation, and Joyce A. Schuman, individually and as an
officer of said corporation.
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Quick Weight Loss Centers, Inc., a Texas
corporation (``QWLC-Tex.''), Don K. Gearheart, individually and as an
officer of said corporation, and Joyce A. Schuman, individually and as
an officer of said corporation, and it now appearing that QWLC-Tex., a
corporation, Don K. Gearheart, individually and as an officer of said
corporation, and Joyce A. Schuman, individually and as an officer of
said corporation (hereinafter, collectively, ``proposed respondents''
or ``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 QWLC-Tex., by its duly
authorized officers, Don K. Gearheart, Joyce A. Schuman, and counsel
for the Federal Trade Commission, that:
1. Proposed respondent QWLC-Tex. is a corporation organized,
existing and formerly doing business under and by virtue of the laws of
the State of Texas, with its offices and principal place of business
located at 2900 Gateway, suite 605, Irving, Texas 75063.
2. Proposed respondent Don Gearheart is an individual with his
principal residence located at 9520 East Pinnacle Pear Road,
Scottsdale, Arizona 85255.
3. Proposed respondent Joyce A. Schuman is an individual with her
principal residence located at 2730 Sea Island Drive, Fort Lauderdale,
Florida 33301.
4. Proposed respondents admit all the jurisdictional facts set
forth in the attached draft complaint.
5. 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.
6. 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.
7. 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.
8. 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: (1) 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' 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 Order or the agreement may be used
to vary or contradict the terms of the Order.
9. 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
Definitions
For the purposes of this Order, the following definitions shall
apply:
A. Competent and reliable scientific evidence shall mean those
tests, analyses, research, studies, or other evidence based on the
expertise of professionals in the relevant area, that have 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;
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 print media 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 smaller 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 QWLC-Tex., a corporation, its
successors and assigns, and its officers, and Don K. Gearheart,
individually and as an officer of said corporation, and Joyce A.
Schuman, individually and as an officer 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 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 of respondents' 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 representations 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
neither:
(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 on 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: ``[Quick Weight Loss Centers] makes no claim
that this [these] result[s] is [are] representative of all participants
in the [Quick 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 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 point bold),
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold),
acknowledgment language (Times Roman 12 point), 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.-----------------------------------------------
(Client Signature) (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;
(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 of percentage, or uses descriptive terms that convey a
quantitative measure such as ``most of our customers maintain their
weight loss long-term'';
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 of
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 QWLC-Tex.
customers in losing weight or maintaining achieved weight loss;
provided, however, that the generally expected success for QWLC-Tex.
customers 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;
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: ``Quick Weight Loss Centers, Inc. participants 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
subparagraphs 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, that the price at
which any weight loss program can be purchased is the only cost
associated with losing weight on that program, unless such is the case.
G. Representing, directly or by implication, the price at which any
weight loss program can be purchased, unless respondents disclose,
clearly and prominently, either:
(1) In close proximity to such representation, the existence and
amount of all mandatory fees associated with the program offered; or
(2) in immediate conjunction with such representation, one of the
following statements:
(a) ``Plus the cost of [list of products or services that
participants must purchase at additional cost]''; or
(b) ``Purchase of [list of products or services that participants
must purchase at additional cost] required'';
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.
H. Failing to disclose over the telephone, for a period beginning
with the date of any advertisement of the price at which any weight
loss program can be purchased and ending no sooner than 180 days after
the last dissemination of such advertisement, to consumers who inquire
about the cost of any weight loss program, or are told about the cost
of any weight loss program, the existence and amount of any and all
mandatory costs or fees associated with participation in the program;
provided, however, that respondents may satisfy this requirement by
directing their weight loss centers to disclose the information, by
providing the center personnel with suggested language to be used when
responding to phone inquiries and by making their best efforts to
ensure compliance with their directive to disclose price information
over the telephone.
I. Representing, directly or by implication, that prospective
participants in respondents' weight loss programs 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.
J. Representing, directly or by implication, the average or typical
rate or speed at which any participant on any weight loss program has
lost or will lose weight, unless at the time of making any such
representation, respondents possess and rely upon competent and
reliable scientific evidence that substantiates the representation.
K. 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 consecutive weeks, or (2) 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.
L. Representing, directly or by implication, that any weight loss
program is supervised or monitored by health care professionals, unless
such is the case, or otherwise misrepresenting, directly or by
implication, the extent to which any weight loss program is supervised
or monitored by health care professionals.
M. Misrepresenting, directly or by implication, the performance,
efficacy, or safety of any weight loss program.
II
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(s) that may affect compliance obligations arising out of
this Order.
III
It is further ordered that respondents Don K. Gearheart and Joyce
A. Schuman shall promptly notify the Commission of the discontinuance
of their present business or employment and of their affiliation with a
new business or employment. In addition, for a period of three (3)
years from the service date of this Order, the individual respondents
shall promptly notify the Commission of each affiliation with a new
business or employment whose activities relate to the advertising,
promotion, offering for sale, or sale of any weight loss program. When
so required under this paragraph, each such notice shall include the
individual respondent's new business address and a statement of the
nature of the business or employment in which the individual respondent
is newly engaged, as well as a description of the individual
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.
IV
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 possessed and relied upon to substantiate any 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.
V
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 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 service 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.
File No. 922 3002.
In the matter of Quick Weight Loss Centers, Inc. a Georgia
corporation, and Don K. Gearheart, individually and as an officer of
said corporation.
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Quick Weight Loss Centers, Inc., a
Georgia corporation (``QWLC-Ga.''), and Don K. Gearheart, individually
and as an officer of said corporation, and it now appearing that QWLC-
Ga., a corporation, and Don K. Gearheart, individually and as an
officer of said corporation (hereinafter, collectively, ``proposed
respondents'' or ``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 QWLC-Ga., by its duly authorized
officers, Don K. Gearheart, and counsel for the Federal Trade
Commission, that:
1. Proposed respondent QWLC-Ga. is a corporation organized,
existing and formerly doing business under and by virtue of the laws of
the State of Georgia, with its offices and principal place of business
located at 1401 Johnson Ferry Road, suite 276, Marietta, Georgia 30062.
2. Proposed respondent Don Gearheart is an individual with his
principal residence located at 9520 East Pinnacle Pear Road,
Scottsdale, Arizona 85255.
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;
(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. 2.34 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 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' 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 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
Definitions
For the purposes of this Order, the following definitions shall
apply:
A. Competent and reliable scientific evidence shall mean those
tests, analysis, research, studies, or other evidence based on the
expertise of professionals in the relevant area, that have 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;
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 print media 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 smaller 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 QWLC-Ga., a corporation, its
successors and assigns, and its officers, and Don K. Gearheart,
individually and as an officer 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 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 of respondents' 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 on 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
respondent's programs that those participants represent, expressed in
terms of a percentage or actual numbers of participants, or
(b) The statement: ``[Quick Weight Loss Centers] makes no claim
that this [these] result[s] is [are] representative of all participants
in the [Quick 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 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 point bold),
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold),
acknowledgment language (Times Roman 12 point), 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.
----------------------------------------------------------------------
(Client Signature) (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;
(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'';
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 of
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 QWLC-Ga.
customers in losing weight or maintaining achieved weight loss;
provided, however, that the generally expected success for QWLC-Ga.
customers 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;
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: ``Quick Weight Loss Centers, Inc. participants 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
subparagraphs 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, that the price at
which any weight loss program can be purchased is the only cost
associated with losing weight on that program, unless such is the case.
G. Representing, directly or by implication, the price at which any
weight loss program can be purchased, unless respondents disclose,
clearly and prominently, either:
(1) In close proximity to such representation, the existence and
amount of all mandatory fees associated with the program offered; or
(2) In immediate conjunction with such representation, one of the
following statements:
(a) ``Plus the cost of [list of products or services that
participants must purchase at additional cost]''; or
(b) ``Purchase of [list of products or services that participants
must purchase at additional cost] required'';
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.
H. Failing to disclose over the telephone, for a period beginning
with the date of any advertisement of the price at which any weight
loss program can be purchased and ending no sooner than 180 days after
the last dissemination of such advertisement, to consumers who inquire
about the cost of any weight loss program, or are told about the cost
of any weight loss program, the existence and amount of any and all
mandatory costs or fees associated with participation in the program;
provided, however, that respondents may satisfy this requirement by
directing their weight loss centers to disclose the information, by
providing the center personnel with suggested language to be used when
responding to phone inquiries and by making their best efforts to
ensure compliance with their directive to disclose price information
over the telephone.
I. Representing, directly or by implication, that prospective
participants in respondents' weight loss programs 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.
J. Representing, directly or by implication, the average or typical
rate or speed at which any participant on any weight loss program has
lost or will lose weight, unless at the time of making any such
representation, respondents possess and rely upon competent and
reliable scientific evidence that substantiates the representation.
K. 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 consecutive weeks, or (2) 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.
L. Misrepresenting, directly or by implication, the performance,
efficacy, or safety of any weight loss program.
II
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 on the emergency of a successor corporation(s), the
creation or dissolution of subsidiaries, or any other change in the
corporation(s) that may affect compliance obligations arising out of
this Order.
III
It is further ordered that respondent Don K. Gearheart shall
promptly notify the commission of the discontinuance of his present
business or employment and of this affiliation with a new business or
employment. In addition, for a period of three (3) years from the
service date of this Order, the individual respondent shall promptly
notify the Commission of each affiliation with a new business or
employment whose activities relate to the advertising, promotion,
offering for sale, or sale of any weight loss program. When so required
under this paragraph, each such notice shall include the individual
respondent's new business address and a statement of the nature of the
business or employment in which the individual respondent is newly
engaged, as well as a description of the individual 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.
IV
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 possessed and relied upon to substantiate any 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.
V
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 three (3) years from the date of entry of this
Order, distribute same to all future such officers, agents,
representatives, independent contractors and employees.
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 they have complied with this Order.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted for comment three
separate proposed consent orders with the following: (1) Doctors
Medical Weight Loss Centers, Inc. (``DMWLC''), Doctors Weight Loss
Centers, Inc. (``DWLC''), and Joyce A. Schuman (``Schuman''); (2) Quick
Weight Loss Centers, Inc., a Georgia corporation (``QWLC-Ga.''), and
Don K. Gearheart (``Gearheart''); and (3) Quick Weight Loss Centers,
Inc., a Texas corporation (``QWLC-Tex.''), Gearheart, and Schuman.
Under the direction and control of Gearheart and Schuman, the companies
marketed similar low-calorie diet programs through weight loss centers
in Florida, Georgia, and Texas, and used substantially similar
advertisements and promotional materials to do so.
The Commission has placed the proposed orders on the public record
for sixty days for comment by interested persons. Comments received
during this period will become part of the public record. After sixty
days, the Commission will again review the three agreements and decide
whether it should withdraw from, or make final, any or all of the
proposed orders.
The Commission's three complaints charge that all of the proposed
respondents deceptively promoted the efficacy and price of their diet
programs, the rate at which their customers lose weight, and used
deceptive monitoring practices. The complaint against QWLC-Tex.,
Gearheart, and Schuman also charges that they deceptively promoted the
qualifications of, and supervision offered by, their staff.
Efficacy
The Commission's three complaints first charge that all of the
proposed respondents failed to substantiate claims that their customers
typically are successful in reaching and maintaining their goal weight.
The agreed-to orders seek to address these charges in several ways.
First, the proposed orders simply prohibit representations about the
success of customers in achieving or maintaining weight loss, unless
proposed respondents have and rely upon competent and reliable
scientific evidence to substantiate the representations. (I.A.) For
representations that any weight loss achieved or maintained through
weight loss programs is typical or representative of all, or any
subset, of customers, the required ``competent and reliable scientific
evidence'' must be based upon a sample of (1) all customers who entered
the diet programs, where the representation relates to such customers,
or (2) all customers who completed a particular phase of a diet
program, or the entire program, where the representation relates only
to such customers. (I.A. (1)) for representations that any weight loss
is maintained long-term, the supporting evidence must be based upon the
experience of customers who were followed for at least two years after
they completed the maintenance phase of the diet programs (or earlier
termination, as applicable). (I.A. (2)) For representations that any
weight loss is maintained permanently, the required evidence must be
based upon the experience of customers who were followed for a period
of time that is either (1) generally recognized by experts in the field
of treating obesity as being of sufficient length to predict that
weight loss will be maintained permanently, or (2) demonstrated by
competent and reliable survey evidence as being of sufficient length to
permit such a prediction. (I.A. (3))
The proposed orders also prohibit proposed respondents from
representing that customers of any weight loss program have
successfully maintained weight loss, unless they also disclose that
``for many dieters, weight loss is temporary'' (I.B), as well as the
following factual information: (1) The average percentage of weight
loss maintained by those customers; (2) the duration over which the
weight loss was maintained, measured from the date that customers ended
the active weight loss phase of the program; and (3) if the customers
referred to are not representative of the general customer population
of respondents' programs, either (a) the proportion of the total
customer population in respondents' programs that those customers
represent, or (b) the statement that proposed respondents make no claim
that the results are representative of all participants in their
programs. (I.C)
The proposed orders further prohibit representations, in broadcast
advertisements of thirty seconds or less, that participants of any
weight loss program have successfully maintained weight loss, unless
proposed respondents also:
(1) Include 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 advertisement of any such advertisement and ending no sooner
than thirty days after the last broadcast advertisement, comply with
the following procedures for information from a potential client:
(a) Give to each potential customer a separate document that
includes the maintenance information disclosures discussed above;
(b) Require each potential customer to sign this document; and
(c) Give each customer a copy of the document, and retain a copy of
the document (I.D.)
When proposed respondents use advertisements containing the
endorsement or testimonial of one of their customers about weight loss
success or weight loss maintenance success, and the success depicted in
the advertisement is not representative of what their customers
generally achieve, the proposed orders also require proposed
respondents to disclose what the generally expected success would be
for customers of proposed respondents in losing weight or maintaining
weight loss, or one of several alternative statements that disclaim the
typicality of the success depicted. (I.E.)
Rate of Weight Loss
The Commission's three complaints also charge that all of the
proposed respondents claimed that an appreciable number of customers
following their diet programs typically lose weight at an average rate
of six or more pounds per week, when they did not have a reasonable
basis for those claims. The Commission's complaints against (1) DMLWC/
DWLC and Schuman and (2) QWLC-Tex., Gearheart, and Schuman also charge
that these proposed respondents claimed that customers following their
diet programs typically lose weight at an average rate of thirty pounds
in thirty days, or three to eight pounds per week, when they did not
have a reasonable basis for doing so.
To remedy these practices, the proposed orders prohibit
representations that customers will reach a specified weight within a
specified period of time, without having and relying upon competent and
reliable scientific evidence to support those claims. (I.I.) The
proposed orders also prohibit representations about the average or
typical rate or speed at which customers have lost or will lose weight,
without having and relying upon competent and reliable scientific
evidence to support those claims. (I.J.)
Price
The complaints further allege that proposed respondents falsely
claimed that the prices they advertised for their diet programs were
the only costs associated with losing weight on their diet programs,
and that their failure in such advertisements to disclose the existence
and amount of all mandatory expenses was a deceptive practice.
The proposed orders seek to remedy these charges in several ways.
First, the proposed orders prohibit untrue claims that any price is the
only the cost associated with losing weight on their diet programs.
(I.F.) Second, when representing the price of their diet programs, the
proposed orders also require proposed respondents either (1) to
disclose the existence and amount of all mandatory fees associated with
the advertised diet programs, or (2) to state in one of two ways that
customers are required to purchase additional products or services.
(I.G.) Finally, the proposed orders require telephone disclosures to
all prospective customers who ask, or are otherwise told about, the
price of their weight loss programs, about the existence and amount of
all mandatory fees. (I.H.)
Monitoring Practices
The complaints also charge that proposed respondents engaged in
deceptive monitoring practices. Proposed respondents instructed their
customers to check in with the weight loss centers three to six times
per week so that proposed respondents could monitor the weight loss
progress of their customers. Sometimes, when the customers checked in,
they presented the proposed respondents with weight loss results
indicating that they may not have been consuming all of the food
recommended by proposed respondents. The Commission's complaints charge
that proposed respondents' failure to disclose that this conduct could
result in serious health complications was a deceptive practice.
The proposed orders seek to remedy this practice by requiring
proposed respondents to disclose that failure to eat all of the food
recommended may involve developing serious health complications. The
proposed orders require proposed respondents to make this disclosure
either (1) to all customers in writing when they start the weight loss
program, or (2) to those customers who, after their first two weeks on
the diet program, average a weekly weight loss that exceeds 2% of their
initial body weight, or three pounds, whichever is less, for two
consecutive weeks. (I.K.)
Medical Supervision
Finally, the Commission's complaint against QWLC-Tex., Gearhart,
and Schuman charges that these proposed respondents falsely claimed
that customers who participated in their diet programs were monitored
by health professionals.
The proposed order addresses this allegation by prohibiting untrue
representations that any weight loss program is supervised or monitored
by health care professionals, or other misrepresentations about the
extent to which any weight loss program is supervised or monitored by
health care professionals. (I.L.)
The purpose of this analysis is to facilitate public comment on the
three proposed orders. This analysis is not intended to constitute an
official interpretation of any of the agreements and proposed orders,
or to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-13286 Filed 6-1-94; 8:45 am]
BILLING CODE 6750-01-M
