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National Dietary Research, Inc. (NDR) and its owner have agreed to pay $100,000 to settle Federal Trade Commission charges that they made false and unsubstantiated claims for two products: Food Source One (FS-1), a purported weight-loss and cholesterol- reducing product; and Vancol 5000 (Vancol), a purported cholesterol-reducing product. The proposed settlement also would prohibit the respondents from, among other things, making similar false or unsubstantiated claims for any product or program they offer in the future.

In November 1993, the FTC issued an administrative complaint naming NDR and The William H. Morris Company, both based in Tampa, Florida; and William H. Morris, the president and owner of both companies. In that complaint, the FTC detailed the allegedly deceptive claims for FS-1, a compressed tablet made largely from plant fiber, and Vancol, a compressed tablet made from plant fiber and other substances. Specifically, the FTC charged that the respondents failed to have adequate evidence to support their claims that FS-1:

  • causes significant weight loss, and does so without dieting or otherwise changing normal eating patterns;

  • is an effective treatment for obesity;

  • reduces hunger and is an effective appetite suppressant;

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NDR--05/04/95)

  • decreases the intestinal absorption of calories; and

  • may significantly reduce serum (blood) cholesterol.

In addition, the FTC charged that the respondents falsely claimed that scientific studies demonstrated that FS-1 is an effective weight-loss product, that FS-1 has a high fiber con- tent, that NDR is an independent research organization that has conducted research on ending worldwide health problems, and that certain of their newspaper advertisements were newspaper stories.

With respect to Vancol, the FTC alleged that the respondents made unsubstantiated claims that Vancol would significantly reduce serum cholesterol, and that it would do so without changes in diet or eating habits. The FTC also alleged that the respon- dents falsely claimed that the effectiveness of Vancol was demonstrated by scientific studies. Finally, according to the FTC, the respondents represented, without a reasonable basis, that consumer testimonials appearing in both the FS-1 and the Vancol ads reflected the typical experience of consumers who have used the product.

With respect to Vancol, the FTC alleged that the respondents made unsubstantiated claims that Vancol would significantly reduce serum cholesterol, and that it would do so without changes in diet or eating habits. The FTC also alleged that the respon- dents falsely claimed that the effectiveness of Vancol was demonstrated by scientific studies. Finally, according to the FTC, the respondents represented, without a reasonable basis, that consumer testimonials appearing in both the FS-1 and the Vancol ads reflected the typical experience of consumers who have used the product.

  • test results;

  • the amount of fiber or other dietary constituent in any product or program;

  • a product being a high or rich source of fiber or other dietary constituent; or

  • the activities of NDR or any other affiliated organization.

In addition, the consent agreement would prohibit the respondents from representing that any advertisement is something other than a paid ad, and from claiming that an endorsement is typical of the experience of consumers who use the product, unless that claim is substantiated. The proposed settlement would allow the respondents to use a truthful, non-typical (NDR--05/04/95)

testimonial, if they clearly and prominently disclose, in close proximity to the testimonial, what the generally expected performance would be in the depicted circumstances, or that consumers should not expect to experience similar results.

The consent agreement would further allow the respondents to use certain claims that are approved for labels by the Food and Drug Administration.

In addition, the consent agreement would require NDR to pay $100,000 to the Commission. If practical, the money will be used for consumer refunds. Otherwise, it will go to the U.S. Treasury.

Finally, the proposed order includes various reporting requirements that would assist the FTC in monitoring the respondents' compliance with its provisions.

The Commission vote to approve the proposed consent agree- ment for public comment was 5-0.

The proposed consent agreement will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.

Copies of the complaint, proposed consent agreement, and an analysis of the agreement to assist the public in commenting are available from the FTC's Public Reference Branch, Room 130, at the above address.

(FTC Docket No. 9263)

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