01-15550. Robert C. Spencer & Lisa M. Spencer, d/b/a Aaron Company; Analysis To Aid Public Comment

AGENCY:

Federal Trade Commission.

ACTION:

Proposed consent agreement.

SUMMARY:

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint that accompanies the consent agreement and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.

DATES:

Comments must be received on or before July 16, 2001.

ADDRESSES:

Comments should be directed to: FTC/Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

James Rohrer, Federal Trade Commission, Southeast Region, Midrise Bldg., Suite 5M35, 60 Forsyth St., S.W., Atlanta, GA 30303.

SUPPLEMENTARY INFORMATION:

Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of the Commission's Rules of Practice (16 CFR 2.34), notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for June 14, 2001), on the World Wide Web, at “http://www.ftc.gov/​os/​2001/​06/​index.htm.” A paper copy can be obtained from the FTC Public Reference Room, Room H-130, 600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or by calling [phone].

Public comment is invited. Comments should be directed to: FTC/Office of the Secretary, Room 159,600 Pennsylvania. Ave., NW., Washington, DC 20580. Two paper copies of each comment should be filed, and should be accompanied, if possible, by a 31/2 inch diskette containing an electronic copy of the comment. Such comments or views will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to final approval, to a proposed consent order from Robert M. Spencer and Lisa Spencer, d/b/a/ Aaron Company (“proposed respondents”). Proposed respondents marketed “Colloidal Silver,” a dietary supplement allegedly containing submicroscopic particles of silver that was intended to be taken orally for the cure and treatment of more than 650 diseases. In addition, proposed respondents marketed other dietary supplements, including Chitosan with vitamin C for substantial weight loss without a restricted calorie diet, and Ultimate Energizer as a stimulant and energizer claiming it was safe with no side effects.

The proposed consent order has been placed on the public record for thirty (30) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement and take other appropriate action or make final the agreement's proposed order.

The Commission's complaint charges that proposed respondents made false claims that their Colloidal Silver product had been (1) medically proven to kill over 650 disease-causing organisms in the body; and (2) successfully used to treat all known infections. The Commission's complaint also charges that proposed respondents failed to have a reasonable basis for claims they made about the Colloidal Silver product's (1) efficacy in treating and curing cancer, multiple sclerosis, HIV/AIDS, and other specific illnesses; (2) superiority to antibiotics in healing and curing infections; (3) safety for human consumption without side effects; and (4) superiority in treating various medical and health problems in animals. Proposed respondents have also been charged with failing to have a reasonable basis for claims they made about the efficacy of their Chitosan with vitamin C product, the safety claims for their Ultimate Energizer product containing Mahuang, and other substances. Such claims, promoting dietary supplements, appeared on the website that proposed respondents produced or caused to be produced.

Part I of the consent order prohibits proposed respondents from misrepresenting, including by means of metatags, any claims that Colloidal Silver or any service, program, dietary supplement, food, drug, or device, has been medically proven to kill disease-causing organisms or any number of infections in the body. Part II of the order requires competent and reliable scientific evidence to substantiate representations that Colloidal Silver or any covered product (1) treats and cures cancer, multiple sclerosis, HIV/AIDS, and other specific illnesses; (2) is superior to antibiotics in healing and curing infections; (3) is safe for human consumption and has no side effects; (4) treats various medical and health problems in animals; and (5) enables consumers to lose substantial weight without the need for a restricted diet. Part III of the order prohibits proposed respondents from misrepresenting, including by means of metatags, the existence, contents or interpretation of any test, study, or research. Part V of the order requires that for any future advertisement of products containing ephedra or ephedrine, proposed respondents must include affirmative warnings concerning safety issues. This warning was developed after discussions with the Food and Drug Administration. FDA has announced that it intends to initiate a rulemaking for dietary supplements for women who are or who may become pregnant. In the event that FDA issues a final rule requiring a warning for pregnant women on dietary supplements, respondents may substitute that warning for the disclosure on that topic required under the proposed order. Part IV of the proposed order permits proposed respondents to make certain claims for drugs or dietary supplements, respectively, that are permitted in labeling under laws and/or regulations administered by the U.S. Food and Drug Administration.

The remainder of the proposed order contains standard requirements that proposed respondents maintain advertising and any materials relied upon as substantiation for any representation covered by substantiation requirements under the order; distribute copies of the order to certain company officials and employees; notify the Commission of any change in the business entity that may affect compliance obligations under the order; and file one or more reports detailing their compliance with the order. Part XII of the proposed order is a provision whereby the order, absent certain circumstances, terminates twenty years from the date of issuance.

This proposed order, if issued in final form, will resolve the claims alleged in the complaint against the named respondents. It is not the Commission's intent that acceptance of this consent agreement and issuance of a final decision and order will release any claims against any unnamed persons or entities associated with the conduct described in the complaint.

The purpose of this analysis is to facilitate public comment on the proposed order, and is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.