FTC Stops Weight-loss Claims about Seaweed-based Patches

The alleged masterminds behind a fraudulent scheme to market two seaweed-based patches as weight-loss products to U.S. consumers have settled Federal Trade Commission charges. The defendants, all based in the United Kingdom, will pay $150,000 – the profits they made from selling Hydro-Gel Slim Patch and Slenderstrip in the United States. Under the settlement, the defendants will be banned in the U.S. from making, advertising, or selling any dietary supplement, food, drug, or weight-loss product, and cannot make claims about other health-related products or services unless the claims are backed by scientific evidence.

The FTC filed a complaint in December 2003 to stop the allegedly false and unsubstantiated weight-loss claims for the two patches. In May 2004, the FTC amended its complaint to include Kingstown Associates, Ltd.; BVW Associates, Inc.; Gary Bush; David Varley; and Laurence White, the defendants named in today’s announced settlement. The FTC added the defendants when the Commission discovered they were allegedly orchestrating the manufacturing, advertising, and selling of the patches in the United States. In September 2004, the original defendants settled FTC charges.

The settlement announced today against the U.K.-based defendants bans them from manufacturing, labeling, advertising, promoting, offering for sale, selling, or distributing any dietary supplement, food, drug, or weight-loss product, or assisting others to do so. The defendants are further prohibited from making representations about the health benefits, performance, or efficacy of any health-related service or program, or device unless the representations are true, non-misleading, and substantiated by competent and reliable scientific evidence at the time they are made.

The order also requires the defendants to give the FTC a list of people who bought Hydro-Slim Patch and Slenderstrip, and prohibits them from disclosing their mailing lists to others, except as required by law. They are required to pay $150,000, but if it is found that the defendants misrepresented their financial status, they will be responsible for the full judgment of $5.3 million – the total U.S. sales of the two patches. The order also contains standard record-keeping provisions.

The Commission vote to authorize staff to file the stipulated final order was 4-0. The stipulated final order for permanent injunction was filed in the U.S. District Court for the Western District of New York on September 9, 2005, and requires the signature of the judge.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the stipulated final order 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 in English or Spanish (bilingual counselors are available to take complaints), 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.