FTC KEEPS PRESSURE ON WEIGHT-LOSS FAD PRODUCTS

FROM:  U.S. FEDERAL TRADE COMMISSION 
Federal Trade Commission Continues Crackdown on Fad Weight-Loss Products
Case Is Second Settlement with Marketers of HCG Products this Year

Marketers who pitched homeopathic HCG drops as a quick and easy way to lose substantial weight have agreed to pay $1 million to settle Federal Trade Commission charges that their weight-loss claims were deceptive and not supported by scientific evidence. The defendants have stopped selling HCG Platinum drops, and under the settlement, Kevin Wright and his Utah-based companies, HCG Platinum, LLC and Right Way Nutrition, LLC, are banned from making similar weight-loss claims in the future.

The settlement marks the second time this year the FTC has taken legal action against marketers of HCG weight-loss products. In January, a company called HCG Diet Direct settled similar charges brought by the FTC.

“Fad weight-loss products like HCG drops come and go, but consumers shouldn’t be fooled by their empty promises,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The foundation of successful weight loss is to eat a healthy diet and to increase physical activity.”

HCG, or human chorionic gonadotropin, is a hormone produced by the human placenta that for decades has been falsely promoted for weight loss. In November 2011, Wright and six other HCG marketers received warning letters issued jointly by FDA and FTC staff, advising them that their products are mislabeled drugs under the Federal Food, Drug, and Cosmetic Act, and warning that it is illegal to make weight-loss claims that are not supported by competent and reliable scientific evidence.

Selling the products at GNC, Rite Aid, Walgreens, and on their own websites, Wright and his companies promised consumers that HCG Platinum drops would cause rapid and substantial weight loss, and that consumers likely would lose as much as 43 and even 50 pounds, as claimed in product testimonials.

The defendants, who also made claims on Facebook, on product packaging, and in Internet pop-up ads and magazines, directed consumers to place the HCG drops under their tongues before meals and stick to a very low calorie diet. The defendants marketed two of their three formulations as “homeopathic,” meaning the listed ingredients were diluted to the point they were undetectable. They typically charged between $60 and $85 for a 30-day supply of all three formulations, and sold approximately $10 million of the products from 2010 to earlier this year, when they were sued.

The settlement bans the defendants from making a number of specific weight- loss claims about any over-the-counter drug, patch, cream, wrap, or any other product. It also requires the defendants to substantiate any future claims that using a product causes weight loss, rapid weight loss, or a specific amount of weight loss or that consumers can expect to lose as much weight as the product’s endorser, unless they have at least two adequate and well-controlled human clinical studies. Claims regarding the health benefits, safety, performance, or efficacy cannot be made unless they are not misleading and are substantiated by competent and reliable scientific evidence. The defendants also are barred from misrepresenting the results of any scientific study.

The order also imposes a $10 million judgment, representing all net sales of HCG Platinum drops, which will be suspended, provided the defendants pay the FTC $1 million. If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgment will become due.

400,000 CLAIM CHECKS MAILED TO VICTIMS OF ALLEGED FREE-TRIAL WEIGHT-LOSS SCAM

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Mails More Than 400,000 Claim Forms to Possible Victims of Alleged LeanSpa Scam

The Federal Trade Commission, through an administrator, is mailing 449,044 claim forms to consumers who may have lost money after buying LeanSpa, a supplement whose marketers allegedly made deceptive weight loss claims. The claim forms are intended to help determine which consumers are eligible for refunds.

The FTC and the state of Connecticut sued the marketers of LeanSpa in December 2011, charging that they used fake websites to promote acai berry and “colon cleanse” weight-loss products, and that they falsely told consumers that they could receive free trials by paying a nominal cost for shipping and handling. In reality, consumers ended up paying $79.95 for the trial, and for recurring monthly shipments of the product that were hard to cancel. The defendants settled the complaint in January 2014, agreeing to stop making the claims and surrender assets valued at approximately $5.7 to $7 million for consumer refunds.

The claim forms will be mailed to consumers by Rust Consulting, Inc., an administrator working for the FTC. Consumers receiving forms will have 60 days to submit their claims online or by mail, following the instructions on the form. Consumers who lost money after buying LeanSpa, but do not receive a claim form, can still submit a complaint with the FTC using the FTC’s Complaint Assistant or toll-free number below.

Consumers with additional questions about the LeanSpa case or the claim form process can call the administrator toll-free number at 1-866-621-4156 or visit the FTC’s LeanSpa case web page. Using this information, the FTC will determine which consumers are eligible for refunds and how much they should receive. No refund checks are being mailed at this time.

The FTC urges consumers to carefully evaluate advertising claims for weight-loss products. For more information on how to avoid weight-loss scams, see the agency’s guidance for consumers of products and services advertised for Weight Loss & Fitness. The FTC also has guidance for media outlets on spotting false weight-loss claims in advertising.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

FTC TESTIFIES BEFORE SENATE ON DECEPTIVE CLAIMS IN THE WEIGHT-LOSS INDUSTRY

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Testifies Before Senate Commerce Subcommittee on Agency Efforts to Combat Fraudulent and Deceptive Claims for Weight-Loss Products

The Federal Trade Commission testified before Congress about its ongoing efforts to combat fraudulent and deceptive claims for weight-loss products through law enforcement, media outreach, and consumer education.

Testifying on behalf of the FTC before the Committee on Commerce, Science, and Transportation, Subcommittee on Consumer Protection, Product Safety, and Insurance, Mary Engle, Associate Director for Advertising Practices at the Federal Trade Commission, said that amid an ongoing obesity epidemic – in which nearly 70 percent of U.S. adults are obese or overweight – the FTC’s most recent fraud study shows that more consumers were victims of fraudulent weight-loss claims than of any other specific fraud type covered by the survey.

The testimony also noted that despite consumer spending of $2.4 billion on weight-loss products and services last year, there is very little evidence that pills or supplements alone will cause sustained, meaningful weight loss – without changes to diet and lifestyle. According to the testimony, consumers are especially susceptible to weight-loss fraud, there is an enormous amount of money to be made in the diet industry, and fraudsters will continue to gravitate toward the money.

“The endless flood of unfounded claims being made in the weight-loss industry vividly illustrates the challenges we, and consumers, are up against,” the testimony stated.

The FTC’s program to combat fraud in the weight-loss industry includes:

Law enforcement: In the past 10 years, the FTC has brought 82 weight-loss-related law enforcement actions, and since 2010, it has collected nearly $107 million for consumer restitution. Early this year, the agency announced Operation Failed Resolution, targeting new weight-loss fads that include food additives, human hormones, skin creams and acai berries.

The Commission has also noted several disturbing developments in weight-loss advertising:

reliance on proprietary studies using erroneous or fabricated data.
marketers capitalizing on weight-loss fads propelled to popularity by trusted spokespeople such as one recent FTC case involving marketers of the Pure Green Coffee dietary supplement. Within weeks of an April 2012 Dr. Oz Show touting green coffee bean extract, these marketers were making overblown claims about the supplement online, such as, “lose 20 pounds in four weeks” and “lose 20 pounds and two to four inches of belly fat in two to three months.”
Media Outreach: To combat the promotion of fraudulent weight-loss products in respected media outlets, the FTC recently issued a “Gut Check” reference guide that advises media outlets on seven claims in weight-loss ads that experts say simply cannot be true and that should cause media outlets to think twice about running the ads.

Consumer Education: Recent FTC brochures, articles, and blog posts geared toward consumers hammer home the message that the only thing they will lose is money if they fall for ads promising quick weight loss without diet or exercise. The FTC also has created teaser websites designed to reach people who are surfing online for weight-loss products.

Today, the agency is also launching a new consumer video and game – the FTC Weight Loss Challenge. The Challenge is an interactive game designed to help consumers think critically about weight-loss products and claims. Available in English and Spanish, the game separates fact from fiction in ads for products touting fast weight loss without the need for diet and exercise.

The Commission vote approving the testimony and its inclusion in the formal record was 5-0.