Berkeley Signs Numerous State Settlements

Berkeley Signs Numerous State Settlements

CINCINNATIBerkeley Nutraceuticals has reached settlements with atleast 10 states over alleged fraudulent marketing and business transactioncharges. Attorneys General (AG) from Arkansas, Florida, Missouri, NorthCarolina, Ohio, Oregon, Pennsylvania, Virginia, Wisconsin and the District ofColumbia announced the $5 million consent agreement with Berkeley, four relatedcompanies including Boland Naturals Inc., Warner Health Care, Lifekey Inc. andWagner Nutraceuticalsall controlled by owner Steve Warshak, who is stillunder investigation by the Federal Trade Commission (FTC). Under terms of the 10state agreements, the Berkeley family of companies will pay a total penalty of$2.5 million, with an additional $2.5 million due if they fail to meet any ofthe obligations of the agreements.

While it acknowledged no wrongdoing, Berkeley agreed to change many of itsquestionable business practices and make restitution to customers withcomplaints. Among its promises, Berkeley agreed to stop making unsubstantiatedscientific claims for products, use pre-sale disclosures with details aboutmemberships, refunds and guarantees; and cease using the word free in alladvertising unless it discloses all related terms and conditions.

Jim Petro, AG of Ohio, which led the multi-state settlement, said his statewould receive about $400,000 of the monetary penalty, which will basically coverlitigation and investigation costs. Arkansas will get about $350,000, accordingto state AG Mike Beebe. This settlement will put an end to two unlawfulpractices by one company that took advantage of Arkansans, he said. Notonly were customers being illegally charged for products they did not order orwant, but you also had a company making unproven and potentially unsafe medicalclaims about its products. He added state residents who feel they were misledor unfairly charged by Berkeley can contact his office or the local BetterBusiness Bureau in the next 90 days for help seeking restitution.

Florida AG Charlie Crist reported more than 80 of his states citizens havefiled complaints about the Berkeley companies and have received an average of$70 per customer. Marketing products with free offers and grand claimsof effectiveness must fully comply with the law, he said. Consumers havethe right to know all the terms of a so-called free offer and not besurprised with unexpected charges for what was supposed to be free.

AGs in California, Illinois, Kansas, Mississippi and Vermont are expected tofile settlements in the near future.