[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35023-35026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16445]
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FEDERAL TRADE COMMISSION
[File No. 932-3077]
Body Wise International, Inc.; Proposed Consent Agreement With
Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a Carlsbad, California based company from
making false claims that a food, drug, or nutritional supplement helps
users achieve or maintain weight loss without diet or exercise, and
would bar unsubstantiated weight-loss, weight-loss maintenance,
cholesterol-reduction, or other health benefits claims for such
products. In addition, it would prohibit the deceptive use of consumer
testimonials or professional endorsements, and would require clear
disclosures of any financial connection between endorsers and the
respondent or its products.
DATES: Comments must be received on or before September 5, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
[[Page 35024]]
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20508.
FOR FURTHER INFORMATION CONTACT: Jeffrey A. Klurfeld or David Newman,
San Francisco Regional Office, Federal Trade Commission, 901 Market
Street, Suite 570, San Francisco, California 94103. (415) 744-7920.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR
4.9(b)(6)(ii).
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Body Wise International, Inc. (``Body
Wise''), a corporation, and it now appearing that Body Wise, sometimes
referred to as proposed respondent, is willing to enter into an
agreement containing an order to cease and desist from the acts and
practices being investigated,
It is hereby agreed by and between Body Wise, by its duly
authorized officers and its attorneys, and counsel for the Federal
Trade Commission that;
1. Proposed respondent Body Wise is a corporation organized,
existing and doing business under and by virtue of the laws of the
State of Nevada, with its office and principal place of business at
6350 Palomar Oaks Court, Suite A Carlsbad, California 92009.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of 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.
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 draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) day, 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 respondents of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of complaint.
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, (1) issue its complaint corresponding in form and substance
with the draft of complaint and its decision containing the following
order to cease and desist in disposition of the proceeding and (2) 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 respondent's
address as stated in this agreement containing the agreed-to order
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 proposed complaint and order
contemplated hereby. It understands that once the order has been
issued, it may 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. ``Distributor'' means any person, other than direct employees of
Body Wise, who has sold nutritional supplements on behalf of Body Wise
or who has received any compensation in connection with the sale of
nutritional supplements on behalf of Body Wise, whether such person is
characterized as a consultant, associate, distributor or otherwise.
B. ``Competent and reliable scientific evidence'' means 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.
I
It is ordered that Body Wise International, Inc., a corporation,
its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from misrepresenting or assisting others in
misrepresenting, in any manner, directly or by implication, that the
nutritional supplement, food or drug:
a. Can cause, aid, facilitate or contribute to achieving or
maintaining weight loss without a reduction in total caloric intake or
an increase in exercise; or
b. Contains any ingredient that, individually or in connection with
other ingredients, can cause, aid, facilitate or contribute to
achieving or maintaining weight loss without a reduction in total
caloric intake or an increase in exercise.
II
It is further ordered that Body Wise International, Inc., a
corporation, its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
[[Page 35025]]
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from representing or assisting others in
representing, in any manner, directly or by implication, that the
nutritional supplement, food or drug:
a. Can cause, aid, facilitate or contribute to achieving or
maintaining weight loss;
b. Contains any ingredient that, individually or in connection with
other ingredients, can cause, aid, facilitate or contribute to
achieving or maintaining weight loss;
c. Reduces, can reduce or helps reduce serum cholesterol levels;
d. Contains any ingredient that, individually or in connection with
other ingredients, reduces, can reduce or helps reduce serum
cholesterol levels; or
e. Provides, can provide, or helps provide any other health
benefit;
unless, at the time of making any such representation, respondent
possesses and relies upon competent and reliable scientific evidence
that substantiates the representation.
III
It is further ordered that Body Wise International, Inc., a
corporation, its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from misrepresenting, in any manner,
directly or by implication, the existence, contents, validity, results,
conclusions, or interpretations of any test or study.
IV
It is further ordered that Body Wise International, Inc., a
corporation, its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from representing or assisting others in
representing, in any manner, directly or by implication, that any
endorsement (as ``endorsement'' is defined in 16 CFR 255.0(b)) of such
nutritional supplement, food or drug represents the typical or ordinary
experience of members of the public who use the nutritional supplement,
food or drug, unless such representation is true and, at the time of
making such representation, respondent possesses and relies upon
competent and reliable scientific evidence that substantiates such
representation.
Provided, however, respondent may use such endorsements if the
statements or depictions that comprise the endorsements are true and
accurate, and if respondent discloses clearly, prominently, and in
close proximity to the endorsement:
a. What the generally expected performance would be in the depicted
circumstances; or
b. The limited applicability of the endorser's experience to what
consumers may generally expect to achieve; i.e., that consumers should
not expect to experience similar results.
It is further ordered that Body Wise International, Inc., a
corporation, its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from failing to disclose, clearly and
prominently, a material connection, when one exists, between a person
providing an endorsement for any such product, as ``endorsement'' is
defined in 16 CFR 255.0(b), and respondent or any other individual or
entity manufacturing, labeling, advertising, promoting, offering for
sale, selling, or distributing such product. For purposes of this
Order, ``material connection'' shall mean any relationship that might
materially affect the weight or credibility of the endorsement and
would not reasonably be expected by consumers.
VI
It is further ordered that Body Wise International, Inc., a
corporation, its successors and assigns, and its officers, directors,
representatives, agents, and employees, directly or through any
corporation, subsidiary, division or other device, in connection with
the advertising, packaging, labeling, promotion, offering for sale,
sale or distribution of nutritional supplements, food or drugs, as
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from disseminating or assisting others in
disseminating any advertisement which contains any reference to
physicians or other health care professionals unless respondent
discloses clearly and conspicuously that physicians and other health
care professionals who endorse Body Wise products may be Body Wise
distributors and have a financial interest in promoting the sale of
Body Wise products.
VII
Nothing in this Order shall prohibit respondent from making any
representation that is specifically permitted in labeling for any
product by regulations promulgated by the Food and Drug Administration
pursuant to the Nutrition Labeling and Education Act of 1990.
VIII
Nothing in this Order shall prohibit respondent from making any
representation for any drug that is permitted in labeling for any such
drug under any tentative final or final standard promulgated by the
Food and Drug Administration, or under any new drug application
approved by the Food and Drug Administration.
IX
It is further ordered that respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the
corporation, such as dissolution, assignment, sale resulting in the
emergence of a successor corporation or association, or the creation or
dissolution of subsidiaries or affiliates, or any other change in the
corporation that may affect compliance obligations arising under this
Order.
[[Page 35026]]
X
It is further ordered that for three (3) years following the
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,
copies of:
A. All materials that were relied upon in disseminating such
advertisement; 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, including complaints from consumers.
XI
It is further ordered that respondent shall distribute a copy of
this Order to each of its operating divisions and to each of its
officers, agents, representatives, and employees engaged in the
preparation or placement of advertisements or other materials covered
by this Order.
XII
It is further ordered that respondent shall distribute a copy of
this Order to each of its current distributors; provided that
respondent may satisfy the requirements of this section with respect to
current distributors by publishing the full text of this Order clearly
and prominently in any periodical which is published by respondent and
which is distributed to all of its distributors.
XIII
It is further ordered that respondent shall, within sixty (60) days
after service of this Order, and at such other times as the Commission
may require, 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, subject to final
approval, an agreement to a proposed consent order from Body Wise
International, Inc. (``Body Wise'' or ``respondent''). The agreement
would settle a proposed complaint by the Federal Trade Commission that
respondent has engaged in unfair or deceptive acts or practices in
violation of section 5(a) of the Federal Trade Commission Act.
The proposed consent order has been placed on the public record for
sixty (60) days for 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 the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
The Proposed Complaint
The administrative complaint which the Commission proposed to issue
would charge that respondent markets a number of nutritional
supplements, for which it makes deceptive representations concerning
their efficacy in promoting weight loss and weight management and in
the reduction of serum cholesterol levels. The complaint also charges
Body Wise with using testimonials from physicians and consumers, when
the experiences described in the testimonials are not typical of the
likely experiences of Body Wise customers, and without disclosing that
the endorsers have a financial interest in promoting the sale of Body
Wise products. Finally, the complaint alleges that Body Wise has
encouraged the use of physicians and other health professionals as
references without disclosing to consumers that they have a direct
financial interest in promoting the sale of Body Wise products.
The definition section of the proposed order defines certain terms
used throughout the order.
Section I of the proposed order bars Body Wise from making claims
that its nutritional supplements can cause or contribute to achieving
or maintaining weight loss without a reduction in caloric intake or an
increase in exercise and or that its supplements contain any
ingredients that have that effect. Section II of the order bars
unsubstantiated weight loss, weight management and cholesterol
reduction claims. It also contains fencing-in relief that applies the
same substantiation standard to any claims regarding the health
benefits of its nutritional supplements. Section III bars Body Wise
from misrepresenting tests or studies. Section IV bars Body Wise from
using testimonials to represent the typical experience of Body Wise's
customers unless it can substantiate that such claims are in fact
typical or it clearly discloses that the endorser's experience is not
typical. Section V requires the affirmative disclosure of any material
connection between Body Wise and any endorser.
Section VI requires Body Wise, in any advertisement that contains
any reference to physicians or other health professionals, to disclose
that health care professionals who endorse Body Wise products or act as
references may be distributors and have a financial interest in
promoting the sale of Body Wise products. This section addresses Body
Wise's use of physicians as references to support the sales activities
of other Body Wise distributors.
Sections VII and VIII harmonize the requirements of the order with
the requirements of the Nutrition Labeling and Education Act of 1990
and with Food and Drug Administration procedures. The remaining
sections are standard reporting, record-keeping and notice provisions.
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 the proposed order or to modify
their terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 95-16445 Filed 7-3-95; 8:45 am]
BILLING CODE 6750-01-M
