9723255
B245224

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

TrendMark Inc., also doing business as TrendMark International, a corporation,
William McCormack, individually and as an officer of the corporation, and
E. Robert Gates, individually and as an officer of the corporation.

DOCKET NO. C-3829

COMPLAINT

The Federal Trade Commission, having reason to believe that TrendMark Inc., a corporation, William McCormack, and E. Robert Gates, individually and as officers of the corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent TrendMark Inc. ("TrendMark") is a Tennessee corporation with its principal office or place of business at 3665 South Perkins, Suite 8, Memphis, TN 33183.

2. Respondent William McCormack is an owner and officer of respondent TrendMark. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of TrendMark, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of TrendMark.

3. Respondent E. Robert Gates is an owner and officer of respondent TrendMark. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of TrendMark, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of TrendMark.

4. Respondents have manufactured, advertised, labeled, offered for sale, sold, and distributed over-the-counter weight-loss products to the public called "Neuro-Thin" and "Lipo-Thin." Neuro-Thin and Lipo-Thin are "foods" or "drugs," within the meaning of Sections 12 and 15 of the Federal Trade Commission Act.

5. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

6. Respondents have disseminated or have caused to be disseminated advertisements, including but not necessarily limited to Exhibit A--a copy of a bulk e-mail sent to users of America Online--which, among other things, directs the recipient to click on a hyperlink which takes the recipient directly to TrendMark's website (excerpts from a printout of the website are attached as Exhibit B). These advertisements contain the following statements:

A. "NEW ALL-NATURAL WEIGHT LOSS PRODUCT, NOW ON THE MARKET!!!'

If you've heard about the new 'Phen/Fen' Diet, and thought about trying it..... DON'T!!!

With the ALL NATURAL 'Thin-Thin Diet', you can achieve the same results, without the dangerous side-effect of Drugs! Eat the foods you want, and STILL lose 10-12 pounds per month! Patent Pending Thin-Thin Diet works for you to lose weight and KEEP IT OFF.

. . .

The Thin-Thin Diet Program is a Nutritional Breakthrough Program with a NO DIET, NO WILL POWER, easy way to LOSE UP TO 20 POUNDS PER MONTH and KEEP IT OFF!!"

(Exhibit A)

B. "Read what a few of the THIN-THIN DIET users are saying:

. . . 'Because of the THIN-THIN Diet, I have reached my weight-loss goal and my diabetes is much less of a problem!'

Toni H., Ohio

'After my husband died, I suffered from depression and gained 50 pounds. I tried several diets, but just couldn't lose any of the weight. I've lost 14 pounds already on the THIN-THIN DIET and feel great!'

Kay M., Tennessee

NEURO-THIN turns your 'hunger switch' off.

. . .

NEURO-THIN help[s] balance the levels of serotonin and dopamine in your brain. The result? Food cravings and hunger pangs are eliminated . . . and . . . you'll be on the way to achieving your goal!

LIPO-THIN Features:

*Absorbs and binds fat.
*Inhibits LDL cholesterol and boosts HDL cholesterol.
*Promotes healing of ulcers and lesions.
*Helps prevent irritable bowel syndrome.
*Reduces levels of uric acid in the blood.
*Correlates with improved cardiovascular health.

LIPO-THIN eliminates fat before your body can absorb it.

Forbidden foods that you craved before beginning your THIN-THIN DIET can still be eaten in moderation because the fat they contain is blocked by the chitin fiber found in LIPO-THIN. This remarkable, naturally occurring ingredient acts like a 'fat magnet' or a 'fat sponge' in your digestive tract. It forms a non-digestible gel that binds with fat molecules and prevents their absorption into your body.

. . .

This program works. The THIN-THIN DIET is based on the latest scientific studies. It stops cravings and blocks fat absorption."

(Exhibit B)

7. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that:

A. Neuro-Thin controls appetite.
B. Taking Neuro-Thin and Lipo-Thin in combination causes significant weight loss without a change in diet.
C. Taking Neuro-Thin and Lipo-Thin in combination causes long-term or permanent weight loss.
D. Lipo-Thin helps prevent the absorption of ingested fat.
E. Lipo-Thin lowers LDL cholesterol and boosts HDL cholesterol.
F. Lipo-Thin promotes healing of ulcers and lesions.
G. Lipo-Thin helps prevent irritable bowel syndrome.
H. Lipo-Thin reduces levels of uric acid in the blood.
I. Lipo-Thin helps improve cardiovascular health.
J. Testimonials from consumers appearing in advertisements for the Thin-Thin Diet reflect the typical or ordinary experience of members of the public who use Neuro-Thin and Lipo-Thin.

8. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 7, at the time the representations were made.

9. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 7, at the time the representations were made. Among other reasons, the purported support which proposed respondents did rely upon for the above claims--studies on individual components of Neuro-Thin or Lipo-Thin-- did not relate adequately to their advertising claims. For example, most of the studies that were submitted by the proposed respondents as support were test tube studies and studies of rats. These studies cannot be used as adequate support for the therapeutic effects of Neuro-Thin and Lipo-Thin in human beings. Therefore, the representation set forth in Paragraph 8 was, and is, false or misleading.

10. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that scientific studies prove that Neuro-Thin and Lipo-Thin cause significant weight loss.

11. In truth and in fact, scientific studies do not prove that Neuro-Thin and Lipo-Thin cause significant weight loss. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

12. Through the means described in Paragraph 6, respondents have represented that the statements of Toni Holcomb, John Vaught, and Kay Morton appearing in website advertisements are endorsements of Neuro-Thin and Lipo-Thin. Respondents have failed to disclose adequately that these endorsers have a material connection with individuals and entities marketing and profiting from the sales of Neuro-Thin and Lipo-Thin. At the time of providing their endorsements, Toni Holcomb and John Vaught were the spouses of independent distributors of Neuro-Thin and Lipo-Thin. At the time of providing her endorsement, Kay Morton was an independent distributor of Neuro-Thin and Lipo-Thin. These facts would be material to consumers in their purchase or use decisions regarding Neuro-Thin and Lipo-Thin. The failure to disclose adequately this fact, in light of the representation made, was, and is, a deceptive practice.

13. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices, and the making of false advertisements, in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this twenty-third day of September, 1998, has issued this complaint against respondents.

By the Commission.
Donald S. Clark
Secretary
SEAL: