| U.S. Federal Trade Commission |
FTC News Release, Oct 12, 2004
Canadian Marketers of Fraudulent Weight-Loss Products Pay Redress to Settle FTC Charges
A Canadian-based fulfillment company doing
business as Beauty Visions Worldwide and SlimShop, and its
principal Robert Van Velzen, have agreed to settle Federal
Trade Commission charges that they made false and
unsubstantiated weight-loss claims for two purported
weight-loss patches - "Hydro-Gel Slim Patch" and
"Slenderstrip." Under the terms of the settlement, the
defendants are prohibited from representing, or assisting any
other entity in representing, that Hydro-Gel Slim Patch,
Slenderstrip, or any other weight-loss product causes rapid or
substantial weight loss without the need to diet or exercise.
The defendants also are required to pay consumer redress.
"Fulfillment companies that are
involved in their clients' misleading advertising can expect
to hear from the FTC," said Lydia Parnes, Acting Director of
the FTC's Bureau of Consumer Protection. "There is no product
on the market that causes permanent substantial weight loss
without diet or exercise."
In December 2003, the FTC filed a complaint
against No. 1025798 Ontario, Inc., doing business as The
Fulfillment Solutions Advantage, Inc., The FSA Group,
International Access, Beauty Visions Worldwide, Slimshop,
Hydro-Gel Slim Patch, and Slenderstrip; and Robert Van Velzen
(collectively the FSA defendants). The FTC's complaint alleged
that the FSA defendants falsely represented that Hydro-Gel
Slim Patch and Slenderstrip cause rapid and substantial weight
loss without reducing caloric intake or increasing exercise,
that these products work for all users, and that Hydro-Gel
Slim Patch causes permanent weight loss.
In March 2004, the FTC amended its complaint
by adding five new defendants who allegedly also were
responsible for the sale and advertising of the weight-loss
patches: Kingstown Associates Ltd. and BVW Associates, Inc.,
both doing business as Beauty Visions Worldwide and Slimshop;
and their principals, Gary Richard Bush, David James Varley,
and Laurence Anthony White (collectively the Kingstown
defendants). According to the FSA defendants' court filings,
their role in the marketing of Hydro-Gel Slim Patch and
Slenderstrip was limited to providing fulfillment services on
behalf of the Kingstown defendants.
The stipulated final order announced today
prohibits the FSA defendants from:
- representing that Hydro-Gel Slim Patch,
Slenderstrip, or other weight-loss products cause rapid or
substantial weight loss without the need to diet or
exercise; representing that these products work for all
overweight users; or that these products cause permanent
weight loss;
- selling, renting, or disclosing the names
of purchasers of Hydro-Gel Slim Patch and Slenderstrip, or
any other information about those customers.
The settlement requires the FSA defendants
to pay $72,422 for consumer redress, and it contains a
$1,422,481 avalanche clause, which would become effective if
the court were to find that the FSA defendants misrepresented
their financial situation.
Finally, the settlement contains a provision
requiring the FSA defendants to provide assistance in the
ongoing litigation against the Kingstown defendants, as well
as record keeping provisions to assist the FTC in monitoring
the defendants' compliance.
The Commission vote authorizing staff to
file the proposed stipulated final order was 5-0. The
stipulated final order was filed in the U.S. District Court,
Western District of New York, on September 15, 2004, and
signed by the judge on September 20, 2004. This stipulated
final order is for settlement purposes only and does not
constitute an admission by the FSA defendants of a law
violation.
The text in this article was prepared by the U.S. Federal Trade Commission.