[Federal Register Volume 59, Number 150 (Friday, August 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19135]
[[Page Unknown]]
[Federal Register: August 5, 1994]
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FEDERAL TRADE COMMISSION
[File No. 932-3254]
Gorayeb Seminars, Inc., et al.; 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 New Jersey-based company and its
officer from making any representation about the relative or absolute
performance or efficacy of any smoking cessation or weight loss
program, unless they possess and rely upon competent and reliable
scientific evidence to substantiate the representation.
DATES: Comments must be received on or before October 4, 1994.
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: Matthew Daynard, FTC/H-200,
Washington, D.C. 20580. (202) 326-3291.
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
In the matter of Gorayeb Seminars, Inc., a corporation, Gorayeb
Learning Systems, Inc., a corporation, and Ronald B. Gorayeb,
individually and as an officer of said corporations.
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Gorayeb Seminars, Inc., a corporation,
Gorayeb Learning Systems, Inc., a corporation, and Ronald B. Gorayeb,
individually and as an officer of said corporations (``proposed
respondents'' or ``respondents''), and it now appearing that proposed
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 Gorayeb Seminars, Inc., Gorayeb
Learning Systems, Inc., their duly authorized officers, and Ronald B.
Gorayeb, individually and as an officer of said corporations, and their
attorney, and counsel for the Federal Trade Commission that:
1. Proposed respondent Gorayeb Seminars, Inc., is a New Jersey
corporation, with its principal office or place of business at 101
Roundhill Drive, Rockaway, New Jersey, 07866.
2. Proposed respondent Gorayeb Learning Systems, Inc., is a New
Jersey corporation, with its principal office or place of business at
101 Roundhill Drive, Rockaway, New Jersey 07866.
3. Proposed respondent Ronald B. Gorayeb is the President,
Secretary, and sole director and shareholder of said corporations. He
formulates, directs, and controls the acts and practices of said
corporations and his address is the same as that of said corporations.
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; and
(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 the 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 the 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' address 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 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
Definition
For the purposes of this Order, ``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 has 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 respondents Gorayeb Seminars, Inc., a
corporation, Gorayeb Learning Systems, Inc., a corporation, their
successors and assigns, and their officers, and Ronald B. Gorayeb,
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 smoking
cessation or weight lose program, including any such program that uses
hypnosis, in or affecting commerce, as ``commerce'' is defined in the
Federal Trade Commission Act, do forthwith cease and desist from:
A. Representing, directly or by implication, that participants who
attend respondents' single-session group hypnosis seminar are cured of
smoking addiction without experiencing withdrawal, anxiety, weight
gain, or other side effects, unless, at the time of making any such
representation, respondents possess and rely upon competent and
reliable scientific evidence substantiating the representation.
B. Making any representation, directly or by implication, about the
relative or absolute performance or efficacy of any smoking cessation
program or weight loss program, unless, at the time of making any such
representation, respondents possess and rely upon competent and
reliable scientific evidence substantiating the representation.
C. Misrepresenting, directly or by implication, the performance or
efficacy of any smoking cessation program or weight loss program.
II
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 that were relied upon in disseminating 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.
III
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
corporations that may affect compliance obligations arising out of this
Order.
IV
It is further ordered, that the individual respondent named herein
shall promptly notify the Commission of the discontinuance of his
present business or of his affiliation with the corporate respondents.
In addition, for a period of three (3) years from the date of service
of this Order, the respondent shall promptly notify the Commission of
each affiliation with a new business or employment that involves a
smoking cessation program or a weight loss program. Each such notice
shall include the respondent's new business address and a statement of
the nature of the business or employment in which the respondent is
newly engaged as well as a description of the 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.
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;
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.
Analyis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Gorayeb Seminars, Inc. (hereinafter
``GSI''), Gorayeb Learning Systems, Inc. (hereinafter ``GLS'') and
their President, Ronald B. Gorayeb, marketers of The Gorayeb Method
seminar, a single, two-hour, group hypnosis session program for smoking
cessation and weight loss. The Gorayeb Method seminar is offered to the
public nationwide by Ronald B. Gorayeb at hotel locales.
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 respondents
deceptively advertised: (1) The likelihood of seminar participants'
success in achieving and maintaining abstinence from smoking cigarettes
and weight loss; and (2) the effectiveness of proposed respondents'
weight-loss programs in leading consumers to achieve and maintain
weight loss compared to other weight-loss methods.
Success
The complaint against GSI, GLS and Ronald B. Gorayeb alleges that
the proposed respondents failed to possess a reasonable basis for
claims they made regarding the success of their seminar participants in
quitting smoking and achieving and maintaining weight loss. Through
advertisements placed in various media in advance of their seminars,
proposed respondents represented that seminar participants: (1) Are
cured of smoking addiction and permanently abstain from smoking
cigarettes; (2) are cured of smoking addiction without experiencing
withdrawal, anxiety or weight gain; and (3) achieve and maintain weight
loss. Proposed respondents further represented that thousands of
consumers have permanently quit smoking and thousands have achieved and
maintained weight loss as a result of attending The Gorayeb Method
seminars.
The Commission believes that these success claims for seminar
attendees' smoking cessation, weight loss and maintenance of achieved
weight loss are deceptive because proposed respondents did not possess
adequate substantiation for those claims at the time they made the
claims.
The proposed consent order seeks to address the alleged success
misrepresentations cited in the accompanying complaint in three ways.
First, the order (Part I.B.) requires proposed respondents to possess a
reasonable basis consisting of competent and reliable scientific
evidence substantiating any claim about the performance or efficacy of
any smoking cessation or weight loss program.
Second, the proposed order (Part I.A.) prohibits proposed
respondents from representing that seminar participants are cured of
smoking addiction without experiencing side effects, such as
withdrawal, anxiety or weight gain, unless the claim is substantiated
by competent and reliable scientific evidence.
Finally, the proposed order (Part I.C.) generally prohibits
proposed respondents from misrepresenting the performance or efficacy
of any smoking cessation or weight loss program.
Efficacy
The Commission's complaint further alleges that proposed
respondents failed to possess a reasonable basis for a claim they made
regarding the relative ability of their hypnosis program to lead
consumers to achieve and maintain weight loss. GSI, GLS and Ronald B.
Gorayeb represented through their advertising that their single-
session, group hypnosis seminar is more efficacious for weight loss and
weight-loss maintenance than other weight-loss methods. The Commission
believes that this comparative efficacy claim for proposed respondents'
hypnosis program is deceptive because proposed respondents at the time
they made the claim did not possess adequate substantiation for the
claim.
To address this efficacy misrepresentation, the proposed order
(Part I.B.) requires proposed respondents to possess and rely upon
competent and reliable scientific evidence substantiating any
representation about the relative (or absolute) performance or efficacy
of any weight loss program (or smoking cessation program), before they
make such a claim. The proposed order (Part I.C.) further generally
prohibits proposed respondents from misrepresenting the performance or
efficacy of any weight loss program (or smoking cessation program).
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.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 94-19135 Filed 8-4-94; 8:45 am]
BILLING CODE 6750-01-M
