Former Officer of Weight-Loss Clinics Agrees to Settle FTC Charges

FTC News Release
September 17, 1991

The Federal Trade Commission has accepted a proposed settlement with one of the defendants in its case against Pacific Medical Clinics Management, Inc. (Medical Clinics). Karin Lynn Norred of Conroe, TX, a former officer of Medical Clinics, has agreed to settle charges that she misled consumers by falsely advertising that, through the Clinics' "medically-safe" program, consumers could adjust their metabolism and lose up to one and one-half pounds a day without exercise or strict dieting. Under the proposed consent decree filed in federal court, Norred would be prohibited from misrepresenting the efficacy of any weight-loss or health-care program, and would be required to deposit $4,000 into a consumer redress fund. The Commission case continues against Medical Clinics and defendant James Norman Wells of San Diego, Calif.

According to complaint filed by the FTC last September, Medical Clinics operated a chain of weight-loss clinics in California, Nevada, Texas, Georgia, and Virginia. In television, radio and print advertisements, Medical Clinics claimed that its weight-reduction program was "medically safe" and that by ingesting its "Growth Hormone Releaser" tablets, protein supplements, and a drug called Synthroid, consumers could adjust their metabolism and lose up to one and one-half pounds a day without exercise or strict dieting.

The FTC's complaint alleged that the three defendants failed to disclose to prospective customers that the Food and Drug Administration has not approved Synthroid as safe and effective for the treatment of obesity and has, in fact, required that the drug bear a label warning against its use as a treatment for obesity. Under the terms of the proposed consent decree, Norred would be permanently prohibited from making the false claims cited in the complaint, and would be prohibited from making false representations with respect to any weight-loss or health-care programs. (Health-care programs are defined in the settlement as any program, plan, service or product relating to the care, prevention, treatment or diagnosis of any disease or disorder.)

The proposed consent decree also would require Norred to make certain disclosures whenever she represents that a weight-loss or health-care program is medically safe or effective if the program involves use of a drug (such as Synthroid) that either has not been approved by the FDA as safe and effective for the treatment of obesity or that the FDA requires to bear certain warning labels. Under such circumstances, Norred would be required to disclose in all promotional materials the fact that the drug has not been approved by the FDA or that the FDA requires the warning label. Norred is also required to pay $4,000 in consumer redress, to be paid immediately upon entry of the judgment. This amount will be deposited into an interest-bearing account that can be used later to pay redress to Medical Clinics' consumers, if feasible.

The Commission vote to approve the filing of the proposed consent decree was 4-0, with Commissioner Dennis A. Yao not participating. The proposed consent decree was filed in the US District Court for the Southern District of California, and requires the approval of the court.

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