[Federal Register Volume 63, Number 133 (Monday, July 13, 1998)]
[Notices]
[Pages 37581-37583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18616]
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FEDERAL TRADE COMMISSION
[File No. 972-3255]
TrendMark Inc., et al.; Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before September 11, 1998.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT: Michael Bloom or Ronald Waldman, New
York Regional Office, Federal Trade Commission, 150 William Street,
13th Floor, New York, N.Y. 10038-2603. (212) 264-1242.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period
[[Page 37582]]
of sixty (60) days. The following Analysis to Aid Public Comment
describes the terms of the consent agreement, and the allegations in
the complaint. An electronic copy of the full text of the consent
agreement package can be obtained from the FTC Home Page (for June 25,
1998), on the World Wide Web, at ``http://www.ftc.gov/os/
actions97.htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W.,
Washington, D.C. 20580, either in person or by calling (202) 326-3627.
Public comment is invited. Such comments or views will be considered by
the Commission and will be available for inspection and copying at its
principal office in accordance with Section 4.9(b)(6)(ii) of the
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to fine
approval, an agreement to a proposed consent order (``proposed order'')
from TrendMark Inc., also doing business as TrendMark International
(``TrendMark''), and its principals, William McCormack and E. Robert
Gates.
The proposed order has been placed on the public record for sixty
(60) days for receipt of comments by interested persons. Comments
received during this period will become part of the public record.
After sixty (60) days, the Commission will again review the agreement
and comments received and will decide whether it should withdraw from
the agreement or make final the agreement's proposed order.
This matter concerns weight loss products which were marketed by
the proposed respondents via unsolicited commercial e-mail sent to
users of America Online. The e-mail directed recipients to click on a
hyperlink that would then take them to TrendMark's website on the
Internet. Both the e-mail and Internet website made various weight loss
and health-related claims about respondents' Thin-Thin
DietTM which consisted of two products--Neuro-
ThinTM and Lipo-ThinTM.
The Commission's complaint alleges that proposed respondents
engaged in deceptive advertising in violation of Sections 5 and 12 of
the FTC Act by making unsubstantiated claims that: (1) Neuro-
ThinTM controls appetite; (2) taking Neuro-ThinTM
and Lipo-ThinTM in combination causes significant weight
loss without a change in diet; (3) taking Neuro-ThinTM and
Lipo-ThinTM in combination causes long-term or permanent
weight loss; (4) Lipo-ThinTM helps prevent the absorption of
ingested fat; (5) Lipo-ThinTM lowers LDL cholesterol and
boosts HDL cholesterol; (6) Lipo-ThinTM promotes healing of
ulcers and lesions; (7) Lipo-ThinTM helps prevent irritable
bowel syndrome; (8) Lipo-ThinTM reduces levels of uric acid
in the blood; (9) Lipo-ThinTM helps improve cardiovascular
health; and (10) testimonials from consumers appearing in
advertisements for the Thin-Thin DietTM reflect the typical
or ordinary experience of members of the public who use Neuro-
ThinTM and Lipo-ThinTM. The complaint alleges
that the proposed respondents did not have a reasonable basis for these
weight loss and health-related claims. In addition, the complaint
alleges that testimonials given by individuals on respondents' website
failed to disclose adequately that these individuals had material
connections with individuals marketing and profiting from the sales off
Neuro-ThinTM and Lipo-ThinTM.
The proposed respondents indicated that they neither possessed nor
were aware of any studies relating specifically to the Neuro-
ThinTM or Lipo-ThinTM products. Moreover, the
purported support which proposed respondents did rely upon for the
above claims--studies on individual components of Neuro-
ThinTM or Lipo-ThinTM--did not relate adequately
to their advertising claims. For example, most of the studies that were
submitted by the proposed respondents as support were test tube studies
and studies of rats. These studies cannot be used as adequate support
for the therapeutic effects of Neuro-ThinTM and Lipo-
ThinTM in human beings.
The complaint further alleges that proposed respondents made a
false claim that clinical evidence proves that Neuro-ThinTM
and Lipo-ThinTM cause users to lose significant weight.
The proposed order contains provisions designed to remedy the
violations charged and to prevent proposed respondents from engaging in
similar acts in the future.
Paragraph I of the proposed order prohibits proposed respondents
from claiming that Neuro-ThinTM and Lipo-ThinTM
or any other product or program: (1) controls appetite; (2) causes
significant weight loss without a change in diet; (3) causes long-term
or permanent weight loss; (4) prevents or helps prevent the absorption
of ingested fat; (5) lowers LDL cholesterol or boosts HDL cholesterol;
(6) promotes healing of ulcers or lesions; (7) helps prevent irritable
bowel syndrome; (8) reduces levels of uric acid in the blood; and (9)
helps improve cardiovascular health, unless, at the time the
representation is made, proposed respondents possess and rely upon
competent and reliable scientific evidence that substantiates the
representation.
Paragraph II of the proposed order states that the proposed
respondents shall not represent, in any manner, expressly or by
implication, that the experience represented by any user who gives a
testimonial or endorsement of the product represents the typical or
ordinary experience of members of the public who use the product,
unless: (a) at the time it is made, the proposed respondents possess
and rely upon competent and reliable scientific evidence that
substantiates the representation; or (b) the proposed respondents
disclose, clearly and prominently, and in close proximity to the
testimonial or endorsement, either: (1) what the generally expected
results would be for users of the product, or (2) the limited
applicability of the endorser's experience to what consumers may
generally expect to achieve, that is, that consumers should not expect
to experience similar results.
Paragraph III of the proposed order prohibits proposed respondents
from making any representation for Neuro-ThinTM and Lipo-
ThinTM or any other food, drug, dietary supplement, drug, or
device, about the health benefits, performance, or efficacy of such
product unless, at the time the representation is made, proposed
respondents possess and rely upon competent and reliable scientific
evidence that substantiates the representation.
Paragraph IV of the proposed order prohibits proposed respondents
from misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test, study, or study.
Paragraph V of the proposed order requires the proposed respondents
to disclose, clearly and prominently, a material connection, when one
exists, between a person providing an endorsement for any product or
program and any respondent, or any individual or entity labeling,
advertising, promoting, offering for sale, selling, or distributing
such product or program.
Paragraph VI of the proposed order provides that nothing in this
order shall prohibit proposed respondents from making any
representation about any drug permitted by the Food and Drug
Administration.
Paragraph VII of the proposed order provides that nothing in this
order shall prohibit proposed respondents from making any
representation for any product that is specifically permitted in
labeling for such product by regulations promulgated by the Food and
Drug
[[Page 37583]]
Administration pursuant to the Nutrition Labeling and Education Act of
1990.
Paragraph VIII of the proposed order contains record keeping
requirements for materials that substantiate, qualify, or contradict
covered claims and requires the proposed respondents to keep and
maintain all advertisements and promotional materials containing any
representation covered by the proposed order. In addition, paragraph IX
requires distribution of a copy of the consent order to current and
future officers and agents having responsibility with respect to the
subject matter of the order. Further, Paragraph X provides for
Commission notification upon a change in the corporate respondent.
Paragraph XI requires proposed respondents William McCormack and E.
Robert Gates to notify the Commission when either of them discontinues
his current business or employment and of an affiliation by either of
them with any new businesses or employment. Paragraph XII of the
proposed order requires the proposed respondents to file a compliance
report. Finally, paragraph XIII of the proposed order provides for the
termination of the order after twenty years under specified conditions.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-18616 Filed 7-10-98; 8:45 am]
BILLING CODE 6750-01-M
