FTC, Mexican Authorities, and State Officials Continue Campaign to Halt Fraudulent Advertising Aimed At Spanish-Speaking Consumers

The Federal Trade Commission, joined by Procuraduria Federal del Consumidor de Mexico (PROFECO), the agency charged with protecting consumers in Mexico, today announced "Campaña Alerta II," the second phase of a consumer education effort to ensure that Spanish-speaking consumers in both countries receive valuable information on how to spot false and unsubstantiated health claims. As part of the campaign, the FTC has recently taken law enforcement actions against three companies the agency alleged were making unsubstantiated claims for their health products -- all of which were widely advertised on Spanish-language cable television. In addition, the Texas Attorney General's Office has brought two law enforcement actions as part of the crackdown on deceptive Spanish language advertisements.

The FTC and PROFECO have jointly produced a Spanish-language television Public Service Announcement (PSA) that will be broadcast on major Spanish-language network affiliates across the United States and Mexico. The PSA warns that consumers spend millions of dollars annually on unproven, fraudulently marketed, and sometimes useless health care products and treatments. The campaign advises consumers to check with their doctor and purchase only those products that have been proven to work. Phase one of this effort, Campaña Alerta, announced in 1997, included jointly released Spanish language PSAs and a number of FTC enforcement actions.

"Advertising in a language other than English does not mean that marketers can ignore the laws that protect consumers in this country," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "Ensuring that claims affecting consumers' health and safety are truthful is, and will continue to be, one of the Commission's top priorities."

"This is a continuation of our consumer education partnership with PROFECO, our counterpart consumer protection agency from Mexico," said Tom Carter, Director of the FTC's Dallas Regional office. "We are working effectively together to better serve Spanish-language consumers on both sides of our border."

As part of "Campaña Alerta II," the FTC has recently executed settlements with two companies:

Nutrivida, Inc. and Frank Huerta, a Brooklyn, New York-based company and its principal, according to the FTC's complaint detailing the charges, made unsubstantiated claims in infomercials for "Cartilet," a dietary supplement comprised of shark cartilage. The respondents claimed that "Cartilet" capsules are effective in the symptomatic relief, treatment, or cure of cancer, and effective in the symptomatic relief or treatment of rheumatism, arthritis, diabetes, fibroids, bursitis, circulatory problems, and cysts. In addition, the complaint alleged as unsubstantiated the claim that the testimonial from the consumer who appears in the advertisement for "Cartilet" shark cartilage capsules reflects the typical or ordinary experience of consumers who used the product. Further, the FTC charged that Nutrivida's claim that studies prove that "Cartilet" shark cartilage capsules are effective in the symptomatic relief or treatment of cancer, arthritis, and diabetes, is false. Finally, the complaint alleged that the respondents misrepresented that their infomercial for "Cartilet" was an independent television program and not a paid advertisement.

The proposed settlement would prohibit the respondents from making the specific claims as alleged in the complaint for Cartilet -- or for any other product -- unless the respondents possess and rely upon competent and reliable scientific evidence to substantiate the representations. The proposed settlement would prohibit any unsubstantiated claims regarding the health benefits, performance or efficacy of Cartilet, or any food, drug or dietary supplement. In addition, the proposed settlement would prohibit the use of testimonials unless they reflect the typical or ordinary experiences that could be expected from use of the product, or a disclosure is made indicating that the experience is not typical. The proposed settlement would prohibit misrepresentations about the existence, validity, results, or conclusions of any test or research concerning any product. Further, the settlement would require the respondents to disclose that any radio or video advertisement 15 minutes in length or longer is a paid advertisement. The settlement provisions would permit the respondents to make any representations that are specifically permitted in the labeling for any product by regulations promulgated by the FDA under the Nutrition Labeling and Education Act of 1990.

Herbal Worldwide Holdings, Inc., of Miami, Florida, and the company's two principal officers, José Diaz and Eduardo N. Naranjo, have agreed to settle charges that they made unsubstantiated weight-loss claims for "Fattaché," a purported dietary product in advertisements that ran extensively on Spanish-language television stations. Fattaché is comprised of psyllium, chitosan (from deacetylated shellfish shells), glucomannan, and apple pectin. The ads for Fattaché, according to the FTC, contained claims such as:

-- Fattaché, a revolutionary product to lose weight easily and in little time;

-- I obtained results very quickly without having to leave my favorite foods; [during this statement, a subscript states "Voluntary Testimonial."] and

-- Fattaché helps eliminate the fat that enters your body before it is digested.

The complaint charges, however, that the respondents did not possess a reasonable basis for these claims, because much of the research relied on by the respondents did not address the weight loss and fat absorption effects discussed in the advertisement, and/or the results of the research could not be applied to the population as a whole because of methodological weaknesses. Therefore, according to the complaint, the representations were false and misleading.

The proposed settlement of these charges would prohibit the respondents from representing that Fattaché, or any dietary supplement, food or drug can cause or contribute to achieving or maintaining weight loss without dieting, that such a product can prevent the absorption of ingested fat, helps eliminate ingested fat, or has any beneficial effect, unless the claims are supported by competent and reliable scientific substantiation.

The proposed settlement also would prohibit the respondents from representing that any endorsement or testimonial for any product represents the typical or ordinary experience of users unless it has evidence to support that the experience is, in fact, typical, or the respondents clearly disclose what the generally expected results for users of the product should be, or that consumers should not expect to achieve similar results. The order would permit the respondents to make any representations permitted under Food and Drug Administration nutrition labeling regulations.

In January 1998, the FTC gave final approval to a consent agreement with another Spanish-language marketer of a purported nutritional supplement. The consent order with Venegas Inc. and the company owner, Angel Venegas, prohibits the company from making unsubstantiated health claims about Alen, a powdered nutritional supplement comprised of wheat germ, wheat bran, soybean extract, and seaweed extract. The company also is prohibited from making any representations as to the benefits, performance, or efficacy of any food, drug or dietary supplement without possessing and relying upon competent and reliable scientific evidence to support the claims.

The FTC continues to expand its education efforts for Spanish-speaking consumers. The new PSA joins a number of publications that the agency has available in Spanish covering such important consumer issues as health claims, prepaid phone cards, mail or telephone order shopping, "900" numbers, and cosigning loans. In order for consumers to gain greater access to this information, these brochures are available on the FTC's home page on the World Wide Web at http://www.ftc.gov (no period).

A summary of the proposed consent agreements in the Nutrivida and Fattaché cases will be published in the Federal Register shortly. The agreements will be subject to a 60-day public comment period before the FTC determines whether to make them final and binding. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580. The Commission votes to accept the proposed consent agreements in the Nutrivida and Fattaché matters were 5-0.

The FTC's cases were handled by the agency's San Francisco and New York Regional Offices.

NOTE: Consent agreements are for settlement purposes only and do 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 $11,000. Court-filed settlements also are for settlement purposes only and do not constitute an admission of a law violation.

Copies of the two consent agreements and an analysis of each agreement to assist the public in commenting are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov or by calling 202-326-3627. Copies of the settlement in the Venegas matter and other FTC documents are also available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington D.C. 20580; 202-382-4357 (202-FTC-HELP); TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC's NewsPhone recording at 202-326-2710.

(FTC File Nos: Nutrivida--972 3071; Fattaché--972 3157; Venegas--C-3781)