FTC Seeks To Slim Bank Accounts Of Diet Supplement Makers

The United States Federal Trade Commission (FTC) has filed complaints in four separate cases alleging that weight-loss and weight-control claims were not supported by competent and reliable scientific evidence. Marketers of the four products --Xenadrine EFX, CortiSlim, TrimSpa, and One-A-Day WeightSmart -- have settled with the FTC, surrendered cash and other assets worth at least $25 million, and agreed to limit their future advertising claims.

"You won't find weight loss in a bottle of pills that claims it has the latest scientific breakthrough or miracle ingredient," said FTC Chairman Deborah Platt Majoras. "Paying for fad science is a good way to lose cash, not pounds."

Xenadrine EFX

Two marketers of Xenadrine EFX will pay at least $8 million and as much as $12.8 million to settle FTC allegations that Xenadrine EFX’s weight-loss claims were false and unsubstantiated. The funds will be used for consumer redress. In a bankruptcy case not involving the Commission, the defendants have also agreed to pay at least an additional $22.75 million to settle claims brought by creditors and consumers, including personal injury claims for an earlier ephedra-based product.

Xenadrine EFX, which contains, among other ingredients, green tea extract (EGCG), caffeine, and bitter orange (Citrus aurantium), was advertised heavily in print and on television, including in such publications as People, TV Guide, Cosmopolitan, and Men’s Fitness. Xenadrine EFX advertising also appeared in Spanish-language publications.

The FTC's complaint alleged that the defendants made false or unsubstantiated claims for Xenadrine EFX, including that it was clinically proven to cause rapid and substantial weight loss and clinically proven to be more effective than leading ephedrine-based diet products. According
to the complaint, Robert Chinery commissioned several studies of Xenadrine EFX, none of which showed substantial weight loss. The complaint alleged that in one of these studies, subjects taking Xenadrine EFX lost an average of only 1.5 pounds over the 10-week study, while a control group taking a placebo lost an average of 2.5 pounds over the same period.

The complaint also alleged that Xenadrine EFX advertisements falsely represented that persons appearing in the ads achieved the reported weight loss solely by using Xenadrine EFX. According to the FTC complaint, consumer endorsers lost weight by engaging in rigorous diet and/or exercise programs. In addition, the endorsers were paid from $1,000 to $20,000 in connection with their testimonials; according to the complaint, Xenadrine EFX advertisements failed to disclose those payments.

The stipulated federal court order with Robert Chinery, Jr. and RTC Research & Development, LLC ("RTC") prohibits certain claims regarding Xenadrine EFX and prohibits all claims regarding the health benefits, performance, efficacy, safety, or side effects of any weight-loss product, dietary supplement, food, drug, or device, unless the representation is true, not misleading, and substantiated by competent and reliable scientific evidence. The settlement also prohibits misrepresentations about any test or study. In addition, the order prohibits misrepresentations of the actual experience of any user or endorser and requires clear and prominent disclosure of any relationship that would materially affect the weight or credibility given to a user testimonial or endorsement. Finally, Robert Chinery and RTC cannot use their settlement with the Commission as a basis for seeking a cash refund of Xenadrine EFX-related income taxes that they previously reported as paid.

CortiSlim and CortiStress

The seven marketers of CortiSlim and CortiStress will surrender, in total, assets worth at least $12 million to settle FTC charges that they made false and unsubstantiated claims that their products can cause weight loss and reduce the risk of, or prevent, serious health conditions. In the final three settlement agreements announced today, the FTC will recover $8.4 million in cash, along with proceeds from the sale of a residence acquired with CortiSlim profits. The settlements also require the two individual defendants to liquidate tax shelters and transfer to the Commission any funds that remain after paying taxes and penalties. In two earlier settlement agreements, the defendants turned over $1.5 million in cash, a boat, a truck, a real estate interest, and proceeds from a tax shelter. The funds recovered from the seven defendants will be used for consumer redress.

The advertising campaign for CortiSlim ran nationwide, including ads on broadcast and cable television, radio, print media, and the Internet. The FTC's complaint alleged that advertising claims about CortiSlim’s ability to cause rapid, substantial, and permanent weight loss in all users were false or unsubstantiated, as were claims about CortiStress's ability to reduce the risk of osteoporosis, obesity, diabetes, Alzheimer’s disease, cancer, and cardiovascular disease. The FTC also alleged that CortiSlim and CortiStress infomercials were deceptively formatted to appear as talk shows rather than advertisements.

The final settlements announced today are with Stephen F. Cheng and his company, Window Rock Enterprises, Inc., and with Gregory S. Cynaumon and his company, Infinity Advertising, Inc. All of the settlements bar misrepresentations of any tests or studies and prohibit claims about the performance, effects on weight, or other health benefits of any dietary supplement, food, drug, cosmetic, or device unless the claims are true, not misleading, and substantiated by competent and reliable scientific evidence. The stipulated orders prohibit the use of deceptively formatted television and radio advertisements. In addition, the defendants cannot use their settlement with the Commission as a basis for seeking a cash refund of income taxes that they reported as paid.

TrimSpa

The marketers of TrimSpa will pay $1.5 million to settle FTC allegations that their weight-loss claims were unsubstantiated. According to the FTC’s complaint, the marketers had inadequate scientific evidence to support their advertising claims that TrimSpa causes rapid and substantial weight loss and that one of its ingredients, Hoodia gordonii, enables users to lose substantial amounts of weight by suppressing appetite.

Many ads for “TrimSpa Completely Ephedra Free Formula X32” featured testimonials. Celebrity Anna Nicole Smith claimed to have lost 69 pounds in eight months by using TrimSpa.
Other advertising claims included “Your high speed dream body diet pill” and “It makes losing 30, 50, even 70 pounds (or however many pounds you need to lose) painless.”

TrimSpa ads appeared on television, in magazines, on radio, and in local newspapers. TrimSpa was also promoted on a Web site, at some NASCAR events, and other live events.

The FTC consent agreement requires TrimSpa's marketers – Goen Technologies Corp., Nutramerica Corp., TrimSpa, Inc., and Alexander Szynalski, also known as Alexander Goen – to pay $1.5 million. The agreement also prohibits the marketers from making any claims about the health benefits, performance, efficacy, safety, or side effects of TrimSpa, Hoodia gordonii, or any dietary supplement, food, drug, or health-related service or program, unless the claims are true, not misleading, and substantiated by competent and reliable scientific evidence.

One-A-Day WeightSmart

The Bayer Corporation will pay a $3.2 million civil penalty to settle FTC allegations that advertisements for One-A-Day WeightSmart multivitamins violated an earlier Commission order requiring all health claims for One-A-Day brand vitamins to be supported by competent and reliable scientific evidence.

Bayer ran a national advertising campaign for One-A-Day WeightSmart, which contains EGCG (epigallocatechin gallate), a green tea extract. Bayer also advertised on television, radio, and the Internet, and in newspapers and magazines, such as RedBook, Family Circle, and TV Guide.

Advertising claims included statements such as:

"Just in! Most women over 30 can gain 10 pounds a decade, due in part to slowing metabolism.… So eat right, exercise, and take One-A-Day WeightSmart. The complete multi-vitamin with EGCG to enhance metabolism."

"One-A-Day WeightSmart. The first and only complete multivitamin with an ingredient to enhance your metabolism. EGCG, a natural green tea extract, to help you while you manage your weight."

The complaint alleges that Bayer Corporation marketed One-A-Day WeightSmart with unsubstantiated claims that it

* increases metabolism;
* enhances metabolism through its EGCG content;
* helps prevent some of the weight gain associated with a decline in metabolism in users over age 30; and
* helps users control their weight by enhancing their metabolism.

The FTC alleges that these unsubstantiated claims violate a 1991 Commission order against Bayer’s predecessor, Miles Inc., that require all claims about the benefits of One-A-Day brand products to be substantiated by competent and reliable scientific evidence.

In addition to the $3.2 million civil penalty, Bayer is prohibited from violating the FTC order and from making unsubstantiated representations regarding the benefits, performance, efficacy, safety, or side effects of any dietary supplement, multivitamin, or weight-control product.

The FTC acknowledges the National Advertising Division of the Council of Better Business Bureaus for its referrals of some of these cases.

The Commission vote to accept the Bayer settlement was 5-0. At the Commission’s request, the Department of Justice filed the complaint and proposed consent decree on January 3, 2007, in the U.S. District Court for the District of New Jersey.

The Commission vote to accept the TrimSpa consent agreement, subject to public comment, was 4-0, with Commissioner Rosch recused. The FTC will publish an announcement regarding the agreement in the Federal Register. The agreement will be subject to public comment for 30 days ending February 5, 2007. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

The Commission votes to authorize staff to file the CortiSlim stipulated final orders were both 5-0. The stipulated final orders for permanent injunction were filed in the U.S. District Court for the Central District of California on October 3, 2006 for Stephen Cheng and Window Rock Enterprises, Inc. and on January 3, 2007 for Gregory Cynaumon and Infinity Advertising, Inc.

The Commission vote to authorize staff to file the Xenadrine EFX stipulated final order was 5-0. The stipulated final order for permanent injunction was filed in the U.S. District Court for the District of New Jersey on December 26, 2006.

NOTE: The proposed consent decree and the stipulated final orders are for settlement purposes only and do not constitute admissions by the settling defendants of law violations. They are subject to court approval and have the force of law when signed by the judge. Likewise, the administrative consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent agreement on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

posted by Consumer Help Web Editorial Team at 11:57 AM |