Marketers Of Formulatrim, Megaloss, Miracletrim Diet Products
Settle FTC False Advertising Charges

Settlement Also Addresses Claims for Nicotain Stop-Smoking Patch

FTC News Release
March 14, 1995

The marketers of the FormulaTrim 3000, MegaLoss 1000, and MiracleTrim diet pills, and the Nicotain Stop Smoking Patch, have agreed to settle Federal Trade Commission false advertising and unfair trade practices charges. In part, the settlement would require William J. Santamaria, owner of the companies, to post a $300,000 performance bond to be used for consumer redress should he engage in deceptive practices when marketing weight-loss or stop-smoking products in the future. The settlement also addresses FTC allegations that the respondents made a host of false and unsubstantiated claims for their products, used consumer endorsements deceptively, and charged consumers' credit cards and debited their checking accounts when not authorized to do so by the consumers or for larger amounts than the consumers had authorized.

The FTC complaint detailing the charges names Santamaria and his firms, Taleigh Corporation and Choice Diet Products, Inc. All three respondents are based in Boca Raton, Florida (collectively referred to below as "Choice"). Choice advertised the products in newspaper tabloids, magazines, and on television.

The Diet Pill Claims

The FTC alleged that Choice falsely claimed that all three diet pills cause substantial weight loss rapidly, and without diet or exercise. The FTC also cited as false the respondents' claims that FormulaTrim 3000 and MegaLoss 1000 burn more body fat daily, leading to greater weight loss than several specific examples of prolonged exercise, including five hours of aerobics or running 10 miles nonstop. Also challenged as false by the FTC were representations that the active ingredient in FormulaTrim 3000 and MiracleTrim is new or unique, the active ingredient in MegaLoss 1000 was formerly available only by prescription, and that scientific studies prove both products cause rapid, substantial weight loss. Choice also falsely represented that purchasers of MiracleTrim would receive personal consultations from a doctor or medically-trained weight-loss counselor, the FTC charged.

Further, the FTC challenged as deceptive consumer endorsements used by the respondents. Specifically, the FTC alleged, Choice represented that the testimonials reflected the typical experience of people who used the products, when they did not. Moreover, according to the complaint, Choice did not disclose that certain consumers appearing in the weight-loss ads had been compensated or offered significant compensation for their endorsements.

The FTC complaint also alleges that Choice did not have adequate substantiation for other claims it made for its products, including that one or more of the products burns body fat, shrinks millions of fat cells within the first 24-48 hours, and will not cause nervous jitters, insomnia or any dangerous side effects.

In addition to challenging these product claims, the FTC also charged Choice with debiting consumers' bank accounts or billing their credit cards without authorization or for amounts greater than those authorized. The respondents also failed to honor their money-back guarantee, deliver ordered products within a reasonable time, and transmit credits to consumers' credit card issuers within seven days after consumers returned the pills (as required by the federal Truth In Lending Act), the FTC charged.

The Nicotain Patch Claims

According to the FTC complaint, Choice falsely advertised that its Nicotain Patch enables users to stop smoking easily, regardless of how long they have smoked or how much, and that it works through a mechanism much like that of a prescription stopsmoking patch. The FTC also challenged Choice's use of testimonials for this product as deceptive.

The Proposed Settlement

The proposed consent agreement to settle these allegations is being announced today for public comment. Generally, it would prohibit the false claims cited above for the same or similar products, and require the respondents to have competent and reliable scientific evidence to back up claims like those the FTC has alleged were unsubstantiated. The settlement also would prohibit Choice from charging consumers' credit cards or debiting their checking accounts except as affirmatively authorized, and from misrepresenting, or not fully disclosing the conditions of, any refund policy. Additionally, it would prohibit the respondents from violating the Truth in Lending Act or the FTC's Mail/Telephone Order Rule, which governs when orders must be shipped and sets out consumers' cancellation and refund rights.

Among the specific false claims the respondents would be prohibited from making would be claims that any weight-loss product with phenylpropanolamine (PPA) is new or unique, results in rapid weight loss, causes substantial weight loss without diet or exercise, that it causes a user to burn more fat than the specific examples of exercise the respondents used in the challenged ads or prolonged exercise activity, or that it contains an ingredient formerly available only through doctors. Claims that Nicotain or any similar product enables users to stop smoking easily, or that it works through a mechanism much like that in a prescription stop-smoking patch, also would be prohibited. The settlement would further prohibit the respondents from misrepresenting the nature or operating mechanism of any smoking deterrent or stop-smoking product.

More broadly, the settlement would prohibit the respondents from misrepresenting that any product is new or unique, the existence or conclusions of any test or study, or that an endorsement for any product represents the typical experience of people who use it. In addition, the respondents would be required to disclose any material connection between them and any endorser.

Examples of specific claims for which the respondents would be required to have scientific substantiation include representations that a weight-loss product causes, helps cause or helps maintain weight loss, or that it helps a user to stop smoking easily. Again, more broadly, the settlement also would require the respondents to have scientific evidence to back up any representation about the performance, benefits, efficacy or safety of any weight-loss or stop-smoking product, or for any food, dietary supplement, drug, or device. The respondents also would be required to disclose in ads that make weight-loss claims that dieting or exercise or both are required to lose weight, unless they have scientific substantiation demonstrating that their product is effective without dieting or exercise.

Finally, as mentioned above, the settlement would require Santamaria to post a $300,000 performance bond, or to place that amount in an escrow account, before marketing any weight-loss product or smoking deterrent or cessation product in the future. The money would be used for redress to consumers or for disgorgement should he be found to violate the order or the FTC Act in the future.

The Commission vote to announce the proposed consent agreement for public comment was 4-0.

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