FTC and FDA Take New Actions in Fight Against Deceptive Marketing

The Federal Trade Commission has charged the marketers of a dietary supplement called Coral Calcium Supreme with making false and unsubstantiated claims about the product's health benefits. This action is part of a series of initiatives the FTC and the Food and Drug Administration (FDA) are taking against the purveyors of products with unsubstantiated health and medical claims. In a complaint filed in federal district court, the FTC alleges that Kevin Trudeau; Robert Barefoot; Shop America (USA), LLC; and Deonna Enterprises, Inc., violated the FTC Act by claiming, falsely and without substantiation, that Coral Calcium Supreme can treat or cure cancer and other diseases, such as multiple sclerosis and heart disease. The FTC charges that these and other claims go far beyond existing scientific evidence regarding the recognized health benefits of calcium.

The defendants promote the product primarily through a nationally televised 30-minute infomercial featuring Trudeau and Barefoot, and through statements made in brochures accompanying the product. The informercial has aired on cable channels such as Women's Entertainment, Comedy Central, the Discovery Channel, and Bravo.

"The Commission has voiced strong concerns about deceptive claims for dietary supplements," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "These cases demonstrate that the FTC will take aggressive enforcement action, particularly when, as alleged in this case, the products are marketed as cures for serious diseases like cancer and heart disease. Marketers who step over the line will find themselves between a rock and a hard place."

In a separate action, the FTC has charged one of the defendants, Kevin Trudeau, with violating a 1998 federal district court order that prohibits him from making unsubstantiated claims about the benefits, performance, or efficacy of any products. The FTC alleges that Trudeau violated that order by making false and unsubstantiated claims about Coral Calcium Supreme, and by making unsubstantiated claims that another product, Biotape, provides significant or permanent relief from severe pain, including debilitating back pain, and pain from arthritis, sciatica, and migraines. In both of these actions, the FTC has asked the court for a temporary restraining order that would prohibit the defendants from making the challenged claims and would freeze their assets.

In related law enforcement efforts, the FTC and the FDA are sending strong warning letters to Web site operators who are marketing coral calcium products claiming that coral calcium is an effective treatment or cure for cancer and/or other diseases. In dozens of warnings sent this week, the FTC states it is aware of no competent and reliable scientific evidence supporting such claims and that such unsupported claims are unlawful under the FTC Act. Accordingly, the FTC is instructing the Web site operators to remove any false or deceptive claims from their sites immediately. In a similar action, the FDA warned Web site operators that disease claims and unsubstantiated structure/function claims cause their products to be in violation of the Federal Food, Drug, and Cosmetic Act.

"FDA and FTC are working together to maximize our efforts to combat heath fraud," said FDA Commissioner Mark B. McCellan. "We are trying to be particularly vigilant concerning fraudulent internet promotion, because this is emerging as an increasingly insidious way of trying to exploit the public."

FTC v. Kevin Trudeau, Robert Barefoot, Shop America (USA), LLC, and Deonna Enterprises

The FTC's first action alleges that Kevin Trudeau, Robert Barefoot, Shop America (USA), LLC, and Deonna Enterprises, Inc., violated the FTC Act by claiming, falsely and without substantiation, that Coral Calcium Supreme can treat or cure cancer and other diseases such as multiple sclerosis and heart disease. According to the FTC, Coral Calcium Supreme is a dietary supplement purportedly comprised of marine coral from Okinawa, Japan. A one-month supply of the product (90 capsules) costs $19.95.

The FTC's complaint alleges that the defendants claim, falsely and without substantiation, that Coral Calcium Supreme will treat and/or cure all forms of cancer and other diseases such as multiple sclerosis, lupus, heart disease, and chronic high blood pressure. The complaint also alleges that the defendants falsely claim that scientific research published in reputable medical journals proves that calcium supplements can reverse and/or cure all forms of cancer. Finally, the complaint challenges the defendants' claims that a daily serving of Coral Calcium Supreme provides the same amount of bioavailable calcium as two gallons of milk, and that the body absorbs significantly more of the calcium in coral calcium - up to 100 times more, and at a significantly faster rate - than the calcium contained in commonly available calcium supplements. The FTC is seeking preliminary and permanent injunctive relief, including restitution to consumers who purchased Coral Calcium Supreme. In addition, the FTC has asked the court for a temporary restraining order that would prohibit the defendants from making the challenged claims, and would freeze their assets.

FTC v. Kevin Trudeau

The FTC's second action, against Trudeau alone, alleges that Trudeau violated a 1998 FTC order prohibiting him from making unsubstantiated claims about the benefits, performance, or efficacy of any product. The FTC alleges that Trudeau violated the order by making false and unsubstantiated claims about Coral Calcium Supreme, and also by making unsubstantiated claims about Biotape. According to the FTC, Biotape is a purported pain-relief product which Trudeau promotes through a separate infomercial, which has aired on national cable channels such PAX Television, the Hallmark Channel, and E! Entertainment Television. Consumers are instructed to place a strip of Biotape directly on the parts of their bodies where they feel pain. One sheet of Biotape, containing 10 strips, costs approximately $10. In this action, the FTC is seeking a finding of contempt, monetary relief, and other injunctive relief, as well as a temporary restraining order that would prohibit Trudeau from making the challenged claims, and would freeze his assets.

Warning Letters

In addition to the FTC's federal court actions, the Commission is sending warning letters to dozens of Web site operators who are making similar claims for coral calcium products. In the warning letters, the FTC reminds the Web site operators that any claim that coral calcium is an effective treatment or cure for any disease must be supported by competent and reliable scientific evidence to comply with the law. The FTC states it is aware of no such evidence supporting these claims, and that without the required support, the claims are illegal under the FTC Act. Accordingly, the FTC is instructing the Web site operators to remove any false or deceptive claims from their sites immediately.

In a similar action, the FDA issued warning letters to numerous Web site operators who are promoting coral calcium on the Internet. The letters cited the organizations for representing the products as useful in the prevention or treatment of serious diseases. In addition, a majority of the letters also cited the firms for making unsubstantiated claims regarding the effect of their products on the structure or function of the body. The FDA letters warn the recipients that FDA may initiate further enforcement action if the violations are not corrected.

The FTC and FDA had conducted Internet "surfs" and found numerous Web sites touting coral calcium products as an effective treatment or cure for cancer and other diseases such as lupus, multiple sclerosis, and heart disease. The staffs of the two agencies will follow up by revisiting the target sites to determine whether the Web site operators gave deleted or revised the unproven claims.

The FTC vote to authorize filing of the cases was 5-0. The cases were filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, on June 9, 2003.

NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the complaint and related documents in both actions are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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(FTC File No. (Coral Calcium) 032 3064; Civil Action No. 03 C 904)
(FTC File No. (Trudeau) X980014; Civil Action No. 98 C 0168)