"Hair Farmer" Settles FTC Charges

Jacqueline Sabal, an infomercial promoter who claimed her "Sable Hair Farming System," could "...finally end baldness in the human race," has agreed to settle Federal Trade Commission charges that her claims were false and unsubstantiated and violated the FTC Act. The settlement would bar her, for life, from selling, or assisting in the sale of, any product which claims to treat or prevent baldness. In addition, it would bar misrepresentations about products, studies, testimonials, franchises or business ventures.

In September, a U.S. District Court judge granted a request by the FTC and issued a preliminary injunction and asset freeze, temporarily banning Sable from promoting her "Sable Hair Farming System" or any other baldness remedy, and from misrepresenting the benefits, performance or efficacy of any product or service. Sable was one of eight marketers of self-help and health-related products promoted in infomercials produced by Kevin Trudeau whom the Commission charged in January, 1998, with making false or unsubstantiated claims. Pending trial, the order issued by U. S. District Judge George W. Lindberg barred Sable from selling or assisting in the sale of any hair grower or hair loss prevention product. The order also barred her from misrepresenting material facts, including misrepresenting studies or tests, and from misrepresenting that testimonials represent the typical or ordinary experience of consumers. The Order, including the asset freeze, also applied to Sable's companies: Sable Laboratories, Inc., Contessa Cosmetics, Inc., Contessa Basile,Inc., and Perfect People Magazine, Inc. The agreement announced today would resolve the pending trial.

The settlement would bar Sabal, also known as Jacqueline Sable, from engaging in the manufacturing, labeling, advertising, promotion or sale of any product that claims to treat or prevent baldness. The settlement also bars misrepresentations about products or services; misrepresentations of tests, studies or research; misrepresentations about the benefits, performance or efficacy of any product or service; and misrepresentations of testimonials or endorsements. In addition, she is barred from violations of FDA rules or regulations, the FTC's Telemarketing Sales Rule and will be required to comply with all federal and state registration and bond requirements. Sabal is barred from misrepresenting the profitability of any business venture or franchise she markets and is required to provide potential franchisees complete and accurate disclosure documents, as provided under the FTC's Franchise Rule. Finally, the settlement contains certain record keeping provisions to allow the FTC to monitor compliance. Based on financial records supplied by the defendant, no consumer redress was ordered. Should the court find that Sabal's assets were misrepresented, the FTC can reopen this matter to seek redress.

The Commission vote to accept the consent judgment was 3-1, with Commissioner Orson Swindle dissenting. In his dissenting statement, Commissioner Swindle said, "The Commission's complaint in this matter alleges that the defendant violated Section 5 of the FTC Act by making false and unsubstantiated representations in radio infomercials advertising a purported baldness cure. The proposed settlement agreement contains extremely strong injunctive relief, including a ban on participating in any business involving hair loss prevention, hair growth, or baldness treatments. Most of the relief in the settlement is without question necessary and appropriate. I applaud the strong relief obtained in this case. On the other hand, several provisions are unrelated to the unlawful conduct alleged in the complaint or would empower the Commission to seek contempt sanctions for violations of another governmental entity's laws. These provisions are so overreaching that I cannot vote to accept this settlement.

"First, the settlement agreement prohibits violations of the Commission's Telemarketing Sales Rule, deceptive practices in the marketing of franchises and business ventures, and violations of the Commission's Franchise Rule. None of this relief is reasonably related to preventing the defendant from deceptively advertising baldness cures or engaging in similar law violations. If there is sufficient information to give the Commission reason to believe that she engaged or is likely to engage in other types of law violations, then we should seek leave to amend the complaint to establish a basis for accepting relief that addresses those violations."

"Second, the settlement agreement broadly prohibits the defendant, in connection with the manufacturing, labeling, advertising, promoting, marketing, offering for sale, sale or distribution of any product or service, from 'making any representation ... that does not comply with any applicable rule or regulation established by the Food and Drug Administration' and from 'conducting or participating in any telemarketing solicitation without compliance with all applicable federal and state registration and bond requirements.' We should not ask a federal court to empower us to enforce another agency's regulations with the club of a contempt action. To do so stretches far beyond the authority given to us by Congress."

This matter was handled for the Commission by the FTC's Chicago Regional Office.

NOTE: This consent judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the complaint and stipulated order for permanent injunction and final judgment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. X980012)