| U.S. Federal Trade Commission |
FTC News Release, Oct 12, 2005
NBTY, Inc. to Pay $2 Million Penalty For Alleged Violations of FTC Order
Company Distributes Dietary Supplements in the U.S. and Abroad
Under the terms of a consent decree approved by
the Federal Trade Commission for submission by the U.S.
Department of Justice (DOJ) to the federal court for approval,
NBTY, Inc. (NBTY, formerly Nature’s Bounty, Inc.), a leading
manufacturer and distributor of dietary supplements in the
United States and abroad, will pay a $2 million civil penalty
to settle charges that it violated the terms of a 1995
Commission order by making false and misleading health claims
about two of its products. The FTC charged that the defendant
made unsubstantiated promises that its products would cause
consumers to lose weight or cure a variety of health
problems.
“Misleading health claims prevent consumers from
getting useful information and can delay treatment for serious
medical conditions,” said Lydia B. Parnes, Director of the
FTC’s Bureau of Consumer Protection. “Companies already under
order for making deceptive health claims should know better
than to try it again.”
Case Background
In 1995, NBTY and its two wholly owned subsidiaries,
Puritan’s Pride, Inc., and Vitamin World, Inc., settled FTC
charges that they made deceptive claims for 26 products. The
FTC alleged that, among other things, the company claimed
falsely or without substantiation that its products promoted
weight loss, increased muscle mass, decreased body fat,
promoted hair growth, prevented premature hair loss, lowered
cholesterol, and prevented arthritis. Under the terms of the
order settling the matter, NBTY agreed not to make
unsubstantiated claims about any dietary supplement and not to
misrepresent the results or conclusions of any test, study,
research article, or any other scientific opinion or data.
NBTY further agreed to pay $250,000 in consumer redress.
The Alleged Violations
If approved by the court, the consent decree will resolve
allegations that NBTY violated the 1995 order through its
subsidiaries. The FTC charges that from 2001 through 2003,
Dynamic Essentials, Inc., an NBTY subsidiary, marketed a
Tongan seaweed extract, “Royal Tongan Limu,” advertising in
English and Spanish that it was clinically proven to cure,
prevent, or treat a range of diseases and disorders such as
allergies, diabetes, cancer, and Alzheimer’s disease.
The FTC alleges that during this same period, NBTY, through
its subsidiaries, also claimed that “Body Success PM Diet
Program” reduces body fat, increases metabolism, and causes
weight loss, even during sleep. According to the FTC, the
company lacked reliable scientific evidence to prove that its
claims for either product were true, and misrepresented that
tests, studies, research, articles, scientific opinion, and
data supported its claims for Royal Tongan Limu.
The Consent Decree
Under the terms of the consent decree, NBTY and its
subsidiaries are barred from violating the 1995 order, and
NBTY must pay $2 million in civil penalties. The consent order
also contains terms requiring NBTY to distribute the order to
certain company personnel, as well as to keep relevant records
and provide them to the Commission to ensure compliance with
the order’s terms.
The Commission vote approving the consent
decree and authorizing transmission to DOJ for filing was
4-0. DOJ submitted the proposed consent decree
to the U.S. District Court for the Eastern District of New
York on October 12, 2005.
The text in this article was prepared by the U.S. Federal Trade Commission.