| U.S. Federal Trade Commission |
FTC News Release, Aug 27, 2004
Two Maine Dietary Supplement Marketers Pay Nearly $1 Million to Settle FTC Deceptive Advertising Complaints
Two Maine-based dietary supplement marketers
and their principals have agreed to settle Federal Trade
Commission charges that they made deceptive advertising claims
about their dietary supplement products, in violation of
federal law. In separate actions, the FTC alleged that
Pinnacle Marketing, LLC and its principals, and VisionTel
Communications, LLC and its principals, falsely advertised
that certain dietary supplements caused substantial weight
loss without diet or exercise, and made other false and
unsubstantiated weight loss claims. The FTC also alleged that
the VisionTel defendants made unsubstantiated claims that
dietary supplements marketed for male and female sexual
dysfunction were safe and effective. The proposed settlements,
which require court approval, would permanently bar both
companies and their principals from making the challenged
false weight loss claims and from making efficacy and safety
claims for weight loss and other health-related products,
services, and programs without scientific evidence. The
Pinnacle defendants have agreed to pay $219,000 and the
VisionTel defendants have agreed to pay $750,000 to settle
these matters. These amounts are based on the defendants'
ability to pay.
Pinnacle Marketing, LLC ("Ultra
Carb")
Pinnacle Marketing, LLC, based in Biddeford,
Maine, marketed a purported weight loss system called "Ultra
Carb" consisting of two tablets: a "carb blocker" with white
kidney bean extract, chromium picolinate, and other
ingredients; and a "fat blocker" with chitosan. Pinnacle's
advertisements claimed that Ultra Carb would block the
absorption of carbohydrates and fat in the body, enabling
users to lose a substantial amount of weight - as much as 20
pounds and two to three dress or pant sizes in one month -
without diet or exercise. Pinnacle advertised Ultra Carb in
radio ads broadcast in metropolitan areas including Los
Angeles, Chicago, and Boston; through ads in newspapers such
as The Washington Post and the Detroit
Free Press; in panel advertisements on television
Interactive Programming Guides; and with an Internet coupon.
Pinnacle sold a two-month supply of Ultra Carb directly to
consumers for $99.95, plus shipping and handling.
The FTC's complaint names Pinnacle
Marketing, LLC (also doing business as Health Remedies, Acadia
Skin Care, Atlantic Skin Care, Atlantic Skin Care Products,
and Pinnacle Marketing Group, LLC), and its principals, Todd
Flaherty, Matthew Tasker, and Kevin Curty. The complaint
alleges that the defendants made false and unsubstantiated
weight loss claims for Ultra Carb, including false claims that
Ultra Carb causes substantial weight loss by blocking the
absorption of fat, and causes quick and substantial weight
loss without diet or exercise.
The proposed stipulated final order
prohibits the defendants from:
- representing that Ultra Carb, or any
other dietary supplement, food, nonprescription drug, or
device causes substantial weight loss by blocking the
absorption of fat, or causes quick and substantial weight
loss without diet or exercise;
- representing that Ultra Carb, or any
other product, service, or program that purportedly provides
health benefits, causes rapid or substantial weight loss or
fat loss, or causes substantial weight loss by blocking the
absorption of carbohydrates, unless the representation is
true and supported by scientific evidence;
- making false or
unsubstantiated claims about the benefits, performance,
efficacy, safety, or side effects of any product, service,
or program that purportedly provides health benefits;
and
- misrepresenting any test, study,
or research.
The order requires the defendants to pay
$219,000 in consumer redress or disgorgement. The order also
contains an "avalanche clause," which provides that $22.5
million will become due immediately if the court finds that
the defendants misrepresented their financial
condition.
The proposed order further includes various
recordkeeping and reporting requirements to assist the FTC in
monitoring the defendants' compliance.
VisionTel Communications,
LLC
The VisionTel defendants have sold various
dietary supplements and other products directly to consumers
through print, radio, and television ads; TV infomercials; and
on the Internet. The FTC's complaint names VisionTel
Communications, LLC, also doing business as Vision
Laboratories, and its officers, Michael McNaboe, Robert Dall
and David Amato, all based in Eliot, Maine; MJ Management,
based in Scarborough, Maine; and MAD Marketing, Inc. and LLAD
Management, Inc., both based in Cape Elizabeth, Maine. The
complaint targets claims for four products:
- Chito-Trim -
The defendants advertised that Chito-Trim, a dietary
supplement containing chitosan, "work[s] to attract fat like
a magnet, forcing your body to pass it out of your system
naturally, giving you the benefits of dieting without the
hassle of calorie counting." A one-month supply of
Chito-Trim cost $59.95. The FTC's complaint alleges that the
defendants made false and unsubstantiated claims that
Chito-Trim causes substantial weight loss without diet or
exercise and causes substantial weight loss by blocking the
absorption of fat or calories.
- TurboTone -
TurboTone contains chromium, garcinia cambogia, phaseolamin
(white kidney bean extract), citrus aurantium, and other
ingredients. Ads included statements such as: "TurboTone is
perfect for you if you want to be able to eat what you want
and lose weight and get firm without calorie counting or
long strenuous workouts." TurboTone cost $59.95 for a 30-day
supply. The FTC alleges that the VisionTel defendants
falsely claimed that TurboTone causes substantial weight
loss without diet or exercise and is clinically
proven.
- Impulse Female Herbal
Blend - The FTC alleges that the
defendants made unsubstantiated efficacy and safety claims
for Impulse, a dietary supplement containing androstenediol
and other ingredients, marketed for female sexual
dysfunction. A 30-day supply cost $59.95. According to the
FTC complaint, endocrinologists and other health
professionals have raised concerns about the lack of testing
of androgen supplements for potential health risks and
negative side effects for women.
- Maximus Male Herbal
Blend - The FTC alleges that the
defendants made unsubstantiated efficacy, safety, and "no
harmful side effects" claims for Maximus, a supplement
containing yohimbine, l-arginine and other ingredients,
marketed for male sexual dysfunction. A 30-day supply cost
$59.95. According to the FTC complaint, Maximus contains
yohimbine and other ingredients that may substantially
increase blood pressure and interact adversely with other
drugs taken by men with conditions that cause erectile
dysfunction.
To settle the FTC's charges, the proposed
stipulated final order prohibits the defendants from claiming
that Chito-Trim, TurboTone, or any other weight loss product
containing similar ingredients causes substantial weight loss
without diet or exercise, or causes substantial weight loss by
blocking the absorption of fat or calories. The order requires
the defendants to have competent and reliable scientific
substantiation for future efficacy, safety, and "no side
effects" claims for the four challenged products, as well as
any other weight loss, sexual dysfunction, or health-related
product, program, or service. The order further
prohibits the defendants from misrepresenting any test, study,
or research for any health-related product, service, or
program.
The order requires the defendants to pay
$750,000 in consumer redress or disgorgement. The order also
contains a $35 million "avalanche clause" that would make this
amount due immediately if a court finds that the defendants
misrepresented their financial condition.
Finally, the proposed order contains various
recordkeeping and reporting requirements to assist the FTC in
monitoring the defendants' compliance.
The FTC received assistance from the
Attorney General's Office for the State of Maine in connection
with these matters.
The Commission vote authorizing staff to
file the complaint and proposed stipulated final order against
Pinnacle Marketing was 5-0. They were filed in the U.S.
District Court for the District of Maine on August 26, 2004.
The order requires the court's approval.
The Commission vote authorizing staff to
file the complaint and proposed stipulated final order against
VisionTel was 5-0. They were filed in the U.S. District Court
for the District of Columbia on August 19, 2004. The order
requires the court's approval.
The text in this article was prepared by the U.S. Federal Trade Commission.