Supplement Manufacturer Fined for Making False Claims 30381

Supplement Manufacturer Fined for Making False Claims

LOS ANGELES--Makers of the Enforma weight loss system were fined $10 million asconsumer redress for making unsubstantiated claims about the products. The Enforma weightloss system combines two products--a chitosan "fat blocker" and a pyruvate"exercise in a bottle." The Federal Trade Commission (FTC) ruled on April 25that the claims being made about the products were false.

The parties held responsible by the FTC are Andrew Grey, president and chief executiveofficer of Enforma Natural Products Inc. and Fred Zinos, a former vice president of salesand marketing. Grey and Zinos were found guilty of making deceptive weight loss claims forthe products such as, "Lose weight without diet or exercise" and "[thisproduct] blocks fat so that it can never enter your body." The two also made productclaims that the "Exercise in a Bottle" product increases metabolism because it"works on a cellular level, forcing every cell in your body to work, whether you'reexercising or not. And when your cells are working, you are burning calories or losingfat."

Two Stipulated Final Orders were filed by the FTC--one for Grey and Zinos and one forthe company--though both orders delineated the same settlement. The settlement includesprohibiting further unsubstantiated claims, adding a disclosure statement about eatingless and exercising more to future weight loss claims, requiring scientific substantiationfor future weight loss claims, and prohibiting future false claims about research, studiesor tests.

Zinos is not required to make payments to the FTC, but Grey must pay $5 million withinfive days of entering the order and the other $5 million within six months. Until theentire amount is paid, the defendants must issue a promissory note to the FTC andsurrender a security interest in all of the company's assets in order to assure payment.The FTC will use the $10 million to refund consumers that purchased the products beforeMarch 31, 2000. However, if the refund is not practical, the money will go to the UnitedStates Treasury.

"A manufacturer should have substantiation," said attorney Marc Ullman."The FTC is active and an FTC Enforcement Action is a very serious matter. The daysof the FTC routinely going away without seeking monetary relief are gone. Now, theyroutinely seek consumer redress."

After the FTC announcement, Enforma quickly put its own spin on the consumer redressissue. According to an Enforma press release, the $10 million has been "putaside" voluntarily, in order to offer consumers a refund in accordance with its 100percent satisfaction policy. In regard to settling the case, the company said it settledto avoid "costly legal battles" and that in no way does the settlement meanthere is an admission of guilt.

Other chitosan manufacturers may already label products with the notice in advertisingabout using the product in conjunction with a diet and exercise program. "There are alot of companies making claims that are not backed up by what we would call 'goodscience'--protocol that can be duplicated," said Bill Froese, marketing manager ofPharmaNutrients Inc., www.pharmanutrients.com.

"Some of the chitosan products are also being sold as 'miracle pills' and atPharmaNutrients, our position is that there is no such thing as a miracle pill,"Froese said. "It's unfortunate that our friends at Enforma have taken a slightlydifferent position regarding the product. Chitosan has been proven to assist in weightloss, however, and we strongly recommend that consumers use it as part of a proper dietand exercise program."