| U.S. Federal Trade Commission |
FTC News Release, Feb 27, 2002
FTC Announces First Two Enforcement Actions Against Purveyors of Bioterrorism Defense Products
Settlements Obtained in Both Actions
The marketers of a home test
kit for anthrax, and an on-line seller of a colloidal
silver product purported to treat anthrax, have both
settled Federal Trade Commission charges of false and
unsubstantiated product advertising. The FTC's
complaints name Vital Living Products, Inc. and its
president, Donald R. Podrebarac, and the operator of
"rawhealth.net," Kris Pletschke.
These cases are the latest in
a series of FTC efforts to combat bogus
bioterrorism-related products. Since mid-November 2001,
the FTC had sent 121 warning letters to marketers of
these products discovered during a coordinated Internet
"surf" by the Commission with the help of the Food and
Drug Administration (FDA), more than 30 state attorneys
general, and the California Department of Health
Services. To date, 62 percent of the 121 warned sites
have eliminated suspect claims to satisfy the FTC's
concerns.
"These companies used
inaccurate and unfounded claims to sell peace of mind,"
said J. Howard Beales, III, Director of the FTC's Bureau
of Consumer Protection. "They tried to cash in on
consumer anxiety about bioterrorism, but as we all know,
deception doesn't pay."
Vital Living
Products
Vital Living Products, Inc.
and its president have entered into an agreement with
the FTC to settle charges that they deceptively
advertised their "PurTest Anthrax Test" (PTAT) - a
purported do-it-yourself test kit - as an effective and
accurate means for detecting the presence of anthrax
bacteria and spores. In a complaint filed in federal
court along with the agreement, the FTC states that the
defendants claimed that the PTAT was an accurate and
effective test for detecting anthrax in air, water and
on surfaces, and that an independent FDA-registered
laboratory conducted tests, using anthrax, showing that
PTAT was effective. The complaint alleges that these
advertising claims were false and unsubstantiated. Among
other things, the proposed settlement would prohibit
sales and shipment of PTAT, unless evidence showed that
the product worked, and would prohibit false and
unsubstantiated claims for other biohazard tests or
devices.
Specifically, the FTC alleges
that Vital Living Products, Inc., a North Carolina-based
company sometimes doing business as American Water
Service, and Donald R. Podrebarac, its president,
marketed test kits that purportedly allowed consumers to
home-test for anthrax in the air, in water, or on
surfaces, at home or in the workplace. After the
September 11, 2001 tragedy, the defendants began
marketing PTAT to hardware stores and on the Internet,
claiming, among other things, that their tests were 95
percent accurate in detecting anthrax. As a result of a
Commission staff request, however, no kits were actually
sold to consumers.
According to the FTC, the
defendants' claims about PTAT are false. The proposed
stipulated final order for permanent injunction would
prohibit the defendants from selling or shipping PTAT,
or any substantially similar test or device, without
evidence showing that the product in fact accurately and
reliably detects the presence and absence of anthrax.
The proposed settlement also would prohibit the
defendants from (a) making any false or unsubstantiated
efficacy or accuracy claims for any biohazard test or
device, and (b) from misrepresenting the existence,
contents, validity, results or conclusions of any test,
study or research.
The Commission vote to
authorize staff to file the complaint and stipulated
final order for permanent injunction was 5-0. The
complaint and stipulated final order were filed in the
U.S. District Court for the Western District of North
Carolina, in Charlotte, on February 25, 2002, and the
stipulated final order requires the court's
approval.
Note: This stipulated final
order is for settlement purposes only and does not
constitute an admission by the defendant of a law
violation. Stipulated judgments have the force of law
when signed by the judge.
Raw
Health
The operator of the Web site
"rawhealth.net," Kris Pletschke, signed a final consent
agreement with the FTC concerning the Web site's
unsubstantiated claims that its colloidal silver product
could treat or cure 650 different diseases; eliminate
all pathogens in the human body in six minutes or less;
and is medically proven to kill every destructive
bacterial, viral, and fungal organism in the body,
including anthrax, Ebola, Hanta, and flesh-eating
bacteria. According to the terms of the FTC settlement,
Pletschke is prohibited from making deceptive and
misleading therapeutic claims for colloidal silver or
any other health-related product, and is required to
make refunds to consumers who purchased colloidal silver
products from the Raw Health Web site.
Under the terms of the
consent agreement, Pletschke is prohibited from making
false or misleading
representations, including anthrax treatment claims, for
colloidal silver and other health-related products. The
order requires him to have competent and reliable
scientific evidence to substantiate any future claim
that any dietary supplement, food, drug, or any other
covered product or service is effective in mitigating,
treating, preventing, or curing any disease, illness, or
health condition. In addition, Pletschke must have
scientific evidence to substantiate any health benefits,
performance, safety, or efficacy claims for any such
product or service.
Pletschke is further
prohibited from misrepresenting in any manner the nature
of any test, study, or research. The order requires
Pletschke to notify all consumers who purchased
colloidal silver from him of the FTC's action, offer
them full refunds, and make such refunds within 90 days
of the request. Finally, he must provide the FTC with a
list of all distributors who purchased colloidal silver
from him, and notify his distributors of the FTC's
action.
This case was developed as
part of a joint effort with the Oregon Attorney
General's Office. Working in close coordination with FTC
staff, the Oregon Attorney General brought its own
action against rawhealth.net and Pletschke, who is
located in Beaverton, Oregon.
Effective Date of
the Raw Health Order
FTC administrative consent
orders ordinarily become final only after a 30-day
public comment period. In August 1999, the FTC adopted
procedures that allow for an order to become effective
immediately, prior to a public comment period, stating
that it would take such action "only in exceptional
cases where, for example, it believes that the allegedly
unlawful conduct to be prohibited threatens substantial
and imminent public harm." The Commission determined
that this is such a matter and issued the complaint and
a final decision and order, and served them upon the
respondent. At the same time, it has placed the consent
agreement on the record for a period of thirty (30) days
for public comment. As a result, the order is now
effective and the respondent is subject to civil
penalties if he fails to comply.
The Commission vote to accept
and make final a Part II consent agreement was 5-0.
The text in this article was prepared by the U.S. Federal Trade Commission.