FTC Announces Settlements, New Litigation

FTC Announces Settlements, New Litigation

WASHINGTONThe Federal Trade Commission (FTC) announced severalactions concerning claims made for ephedra-containing dietary supplements. FTCreleased details on settlements with Scottsdale, Ariz.- based HealthLaboratories and Palm Harbor, Fla.-based USA Pharmacal Sales Inc. It also filedsuit against Vancouver, Canada-based Bentley Myers International, and BeverlyHills, Calif.-based Publishers Data Services and Nutritional Life Inc.

In the settlement with Health Laboratories, the company agreed to pay$195,000 in consumer redress. The defendant marketed two weight-loss productsunder the Berry Trim Plus nameone containing hydroxycitric acid (HCA) and theother ephedrine alkaloids. The products, according to FTC, used unsubstantiatedclaims in the form of testimonials, and the company did not have a reasonablebasis to advertise the products as 100% safe.

According to James Prochnow, counsel for Health Laboratories from theDenver-based arm of Patton Boggs, the company went out of business in May 2001,when FTC first entered the complaint against the company. When theres anFTC investigation, it requires a lot of resources, Prochnow said. Thecompany decided it wasnt worth its while to continue on. He added FTC washard-nosed but reasonable in its settlement with the company, which admitted tono wrongdoing.

In FTCs settlement with USA Pharmacal, the company agreed to pay $175,000in consumer redress. FTC charged USA Pharmacal with making unsubstantiatedclaims for certain weight-loss and sexual performance dietary supplements. Theweight-loss products contained ingredients such as ephedra, chitosan and HCA,while the sexual health product contained yohimbine, androstenedione and 12other active ingredients.

In a case currently in litigation, FTC charges Bentley Myers International,Publishers Data Services, Nutritional Life Inc., Michael S. Levey and GaryBallen with marketing supplements purported to cause rapid weight loss withoutdiet or exercise (ephedra-based Zymax and MillinexES, and Serotril with St. Johnswort) and another to cure arthritis (CartazyneDS with glucosamine andchondroitin). Additionally, FTC charges Levey and the three companies withviolating a 1993 FTC order in connection with these marketing activities. Levey,under terms of the 93 order, was supposed to have notified FTC within 30 daysof joining the companies; he did not. FTC is seeking civil penalties againstLevey and the companies, in addition to consumer redress.