FTC'S Beales Testifies on Campaign to Combat Health Fraud and the Elderly

Health fraud poses a direct and immediate threat of both economic and physical injury to persons already suffering from serious conditions and diseases, with the elderly being particularly vulnerable because of the high incidence of health-related problems in this age group, a Federal Trade Commission official told a Congressional panel today. J. Howard Beales, III, Director of the FTC's Bureau of Consumer Protection, said that despite federal and state enforcement action, unfounded or exaggerated health claims remain common in the marketplace and combating health fraud remains one of the Commission's top priorities. The FTC has a longstanding and active program to combat fraudulent and deceptive advertising claims for health products, Beales said, noting that since the fall of 1997 the FTC has filed 27 cases against companies that used false or deceptive claims to market unproven products that allegedly cure such ailments as cancer, arthritis, sleep apnea, or circulatory diseases.

Beales delivered the FTC testimony today at a hearing on health fraud and the elderly before the Senate Special Committee on Aging.

According to the FTC testimony, a number of factors, including lack of information and false beliefs about health and the causes of disease, contribute to consumer's susceptibility to health fraud. "Although aggressive law enforcement is crucial," the testimony noted, "the best consumer protection comes from preventing consumers from being deceived in the first instance." The FTC emphasizes consumer education to help consumers spot and avoid health fraud, and provides businesses with the guidance necessary to avoid violating the law.

"In addition to economic injury," the testimony stated, "some products and services can pose a serious threat to health." For example, in some instances, particularly the area of cancer, marketers have told victims that it is not necessary for them to seek conventional treatment.

"Deterred treatment is not the only risk," Beales said, "some products and services are themselves dangerous. Safety is a primary criterion the FTC uses in selecting its cases."

Beales highlighted some of the law enforcement efforts that the FTC and the Food and Drug Administration have taken to protect consumers, especially seniors, from health fraud. He summarized "Operation Cure.All"-- a comphresive consumer and business education and law enforcement initiative to combat health fraud on the Internet. The initial phase of "Operation Cure.All"consisted of two Internet surfs conducted in 1997 and 1998 that, Beales said, identified over 1600 sites worldwide making questionable claims for products marketed as treatments for heart disease, cancer, HIV/AIDS, and other serious illnesses. Over 800 of those sites were located in North America, with the vast majority in the United States. The FTC has filed 16 "Operation Cure.All" cases challenging companies that made strong claims about treatments or cures for serious diseases without adequate support. This year, as part of "Operation Cure.All," the Commission filed an additional eight cases, targeting companies that marketed a variety of devices, herbal products, and other dietary supplements to treat or cure cancer, arthritis, Alzheimer's, diabetes and many other diseases. The FTC alleged that the marketers of these products made unsubstantiated health benefit claims.

In the area of consumer education, the FTC works with other federal agencies, such as the Administration on Aging, and organizations such as AARP to get the Commission's consumer education messages to older audiences, Beales said. The Commission also uses the Internet to distribute its consumer education messages. Its website - www.ftc.gov - provides links to reliable sources of health information. "Our web-based consumer education material has received nearly 80,000 accesses since October 1, 2000," the testimony noted. The FTC also maintains a number of "teaser" sites which can be found using common search engines and are set up to mimic health fraud sites. The Commission's three health-related teaser sites - "Arthriticure," "Virility Plus," and "Nordicalite," have received over 20,000 accesses from October 1999 through August 2001.

In addition, Beales said, the FTC is releasing today a publication produced with the FDA, called "Miracle Health Claims: Add a Dose of Skepticism," which provides specific information about the efficacy and safety of popular products, and offers tips on spotting and avoiding health fraud. Another brochure, "Who Cares: Sources of Information About Health Care Products and Services," published jointly with the National Association of Attorneys General, informs consumers of where to go for information about arthritis cures, alternative medicines, and other health issues. It also tells them where to file complaints about health fraud.

In conclusion Beales stated, "The Commission will continue its aggressive law enforcement and consumer and industry education program to combat health fraud."

The Commission vote on the testimony was 5-0.

Copies of the testimony 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.