Maine Attorney General Stops Telemarketing of
Dubious Baldness, Psoriasis, and Weight-Loss Products
In September 2003, Maine Attorney General Steven Rowe filled suit against Jungle MD, Inc., Jungle MD.com, Inc., Consumer Response Solutions LLC, and their owners, Christopher Austin and John H. Stewart, Jr. The suit alleged that the defendants falsely claimed that their products cured baldness and psoriasis and caused rapid weight loss. The suit also alleged that the defendants failed to honor their money-back guarantee and that they charged consumer credit cards for unauthorized amounts.
The alleged baldness product was FolliGuard, which contained vitamins, shampoo, herbal tablets, and a "topical activator" that contained minoxidil, the active ingredient in the nonprescription drug Rogaine. Although minoxidil has some effectiveness against hair loss, FolliGuard advertisements falsely claimed that FolliGuard was "revolutionary," contained a unique ingredient, and was "proven to rejuvenate hair growth in more than 90 percent of people who use it." Moreover, as noted by a report on ABC-TV's "Good Morning America," Folliguard Extra cost $359 for a 3-month supply, whereas nonprescription Rogaine cost $15/month. The other products were:
PsoRelief, advertised as a “revolutionary patented formula clinically proven to treat psoriasis.” Ultra Carb Blocker and Carbogenics, claimed to promote weight loss “while enjoying the foods you want."
In November 2003, the case was settled with a consent decree—shown below— under which the defendants (a) admitted no wrongdoing; (b) agreed to pay a $25,000 civil penalty and make $115,000 available for restitution; and (c) were barred from falsely advertising any product, failing to honor any money-back guarantee, or making unauthorized credit card charges.
STATE OF MAINE
STATE OF MAINE
CONSUMER RESPONSE SOLUTIONS, LLC
DOCKET NO. CV-03-231
CONSENT DECREE & ORDER
Plaintiff, State of Maine, filed a Complaint against Defendants, Consumer Response Solutions, LLC, Jungle MD, Inc., Junglemd.com, Inc., Christopher W. Austin, and John H. Stewart, Jr. Without constituting evidence against, or admission by, any party as to any issue of fact or law other than as to jurisdiction the parties have consented to the entry of this Consent Decree and Order for the purpose of resolving the matters pending, without trial of any issue of fact or law. NOW
THEREFORE, IT IS HEREBY ORDERED, JUDGED AND DECREED AS FOLLOWS:
This court has jurisdiction over the Plaintiff and Defendants and the subject matter of this action. The Complaint states the claim for relief-under 5 M.R.S.A. § 207 of the Maine Unfair Trade Practices Act ("the UTPA”).
Pursuant to 5 M.R.S.A. § 209 and M.R. Civ. P. 65, Consumer Response Solutions, LLC, Jungle MD, Inc., Junglemd.com, Inc., Christopher W. Austin and John H. Stewart, Jr., their officers, directors, employees, agents, representatives, successors, and assigns and those in active concert or participation with them who receive actual notice of this injunction are permanently enjoined from engaging in the following acts or practices:
(A) Representing in any manner, directly or indirectly, in connection with the manufacturing, advertising, packaging, labeling, promotion, offering for sale, sale, or distribution of the Ultra Carb Blocker, Carbogenics, or any weight loss product that:
(1) Such products cause or assist in causing rapid weight loss;
(2) Such products cause or assist in causing substantial weight loss without the need to exercise or reduce caloric intake;
(3) Such products are new or unique or contain a new or unique ingredient;
(4) Any endorsement of such products represents the typical or ordinary experience of members of the public who use the product.
(B) Representing in any manner, directly or indirectly, in connection with the manufacture, advertising, packaging, labeling, promotion, offering for sale, sale, or distribution of Folliguard, or any other product designed to "cure" or reduce baldness or hair loss that:
(1) Such product is guaranteed to regrow new hair;
(2) Such product is new or unique or contains a new or unique ingredient;
(3) Such product causes or assists in causing rapid hair growth.
(C) Representing in any manner, directly or indirectly, in connection with the manufacture, advertising, packaging, labeling) promotion, offering for sale, sale, or distribution of PsoRelief, or any other product designed to "cure" or alleviate skin disorders that:
(1) Such product is guaranteed to cure psoriasis, eczema, dermatitis, or any other skin disorder or condition:
(2) Such product is new or unique or "revolutionary" or contains a new, unique, or "revolutionary" ingredient or ingredients.
(D) Using the term "'MD" or any other medical term or abbreviation used in the field of medicine in connection with the manufacture, advertising, packaging, labeling, promotion, offering for sale, sale, or distribution of any health and beauty. products.
(E) Charging any consumer's credit card account for purposes that were not knowingly or affirmatively authorized by the consumer. To comply with this paragraph, the . Defendants agree that they will either tape the entire sales conversation with the consumer or require the consumer's express written consent before charging the consumer's credit card for any up-sell or negative option sale.
(F) Representing directly or by implication that consumers can receive a refund, through the use of such terms as "money-back guarantee" or similar terms, unless the business has in place adequate and effective procedures for consumers to obtain a refund within the time stated in the guarantee, or if no time is stated in the guarantee, within thirty (30) days following receipt of a request from the consumer for a refund which complies with the conditions of the guarantee.
(G) Requiring the consumer to call a telephone number to obtain authorization to return. a product as a condition of receiving a refund.
(H) Creating, publishing, disseminating, selling, distributing, or assisting in the distribution of any type of advertising that is false, deceptive, or unsubstantiated; and
(I) Violating 10 M.RS.A. § 1210.
III. RESTITUTION AND CIVIL PENALITIES
Defendants agree to assign to the State of Maine $140,000 from funds held by Global Payments Direct, Inc. and Online Data Corp., specifically funds remaining in Jungle MD account Number 0000270500019319 and Folliguard account Number 0000006565252654 for restitution to consumers. Of this amount, $25,000 shall be paid to the State as a civil penalty. The balance of $115,000 shall be distributed to consumers who are determined by the Attorney General in his sale discretion to be eligible to receive restitution. The Attorney General will provide the Defendants with a description of the criteria and procedures used to make payments to consumers as well as an accounting of the disposition of moneys received pursuant to this paragraph, including the names of the consumers to whom payments were sent, the amount sent to each consumer, whether the checks were cashed and the amount of any money returned as undeliverable. Any balance remaining after the Attorney General has determined no further claims for restitution are outstanding shall be applied to the State as costs.
V. RETENTION OF JURISDICTION
Jurisdiction is retained by this court for the purpose of enabling any of the parties to this Consent Decree and Order to apply to the court at any time for further order and directions as may be necessary or appropriate for the modification, construction, enforcement, or execution of this Consent Decree and Order. Each and every violation of this Consent Decree and Order shall be treated as a separate contempt thereof.
VI. EFFECTIVE DATE
This order shall be effective immediately upon entry. IT IS HEREBY ORDERED
Dated: Nov. 24, 2003
Justice, Superior Court
G. STEVEN ROWE
Linda J. Conti
Assistant Attorney General
Maine Bar No. 3638
Office of Attorney General
6 State House Station
Augusta, ME 04333-0006
Tel. (207) 626-8800
ATTORNEY FOR THE STATE OF MAINE
Richard C. Cleary, Esq.
Cleary Law Office, P .A.
21 Military Street
Houlton, ME 04730
ATTORNEY FOR CONSUMER RESPONSE
SOLUTIONS LLC., JUNGLE MD, INC.,
JUNGLE MD.COM, INC. AND
Jeffrey M. White, Esq.
One Monument Square
Portland, ME 01401-4033
ATTORNEY FOR JOHN H. STEWART, JR.
Christopher W. Austin acknowledges that he is a principal in Consumer Response Solutions, LLC, Jungle MD, Inc., and Jungle MD.com, Inc., and by his signature he further acknowledges that the provisions of this Consent Decree and Order bind the above-referenced entities and him individually.
Christopher W. Austin
John H. Stewart, Jr. acknowledges that he is a shareholder in Consumer Response Solutions LLC and a shareholder and Vice President of Jungle MD, Inc., and by his signature hereon he further acknowledges that the provisions of the Consent Decree and Order bind these entities and him individually
John S. Stewart, Jr.
This page was posted on April 11, 2006.