ANALYSIS OF PROPOSED CONSENT
ORDER TO AID PUBLIC COMMENT

The Federal Trade Commission has accepted, subject to final approval, an agreement to a proposed consent order from Body Systems Technology, Inc. ("BST"), a corporation, and William E. Chace and James D. Davis, individually and as officers of the corporation ("proposed respondents").

The proposed consent order has been placed on the public record for sixty (60) days for the receipt of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and comments received and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.

This matter involves proposed respondents' making of health-related advertising claims on the Internet and elsewhere for their shark cartilage capsules, uña de gato capsules, and uña de gato liquid. The proposed complaint alleges that BST and its two principal officers violated Section 5 of the Federal Trade Commission Act ("FTC Act") by making the following unsubstantiated claims: BST's uña de gato products are or are likely to be an effective treatment of cancer, HIV/AIDS, and arthritis; and BST's shark cartilage capsules are effective in the prevention and treatment of cancer. The proposed complaint also alleges that the proposed respondents violated Section 5 of the FTC Act by falsely representing that research studies show that BST's uña de gato products are or are likely to be an effective treatment of cancer, HIV/AIDS, and arthritis; and by falsely representing that published laboratory studies prove that BST's shark cartilage capsules are effective in the prevention and treatment of cancer.

Paragraph I of the proposed consent order prohibits proposed respondents from representing that BST's shark cartilage capsules or any other product or program is effective in the prevention of cancer or is effective in the treatment of cancer unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

Paragraph II of the proposed consent order prohibits proposed respondents from representing that BST's uña de gato capsules, BST's uña de gato liquid, or any other product or program is or is likely to be an effective treatment of cancer, is or is likely to be an effective treatment of HIV/AIDS, or is or is likely to be an effective treatment of arthritis unless, at the time the representation is made, proposed respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

Paragraph III of the proposed consent order prohibits for any food, dietary supplement, drug, or any program, representations about the health benefits, performance, efficacy, or safety of such product or program, unless, at the time the representation is made, proposed respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

Paragraph IV of our proposed consent order prohibits for any product or program, misrepresentations about the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research.

Paragraph V of the proposed consent order allows proposed respondents to make any representation that is specifically permitted in the labeling for any product by regulations promulgated by the FDA pursuant to the Nutrition Labeling and Education Act of 1990.

Paragraph VI of the proposed consent order allows proposed respondents to make any representation for any drug that is permitted by the FDA in the drug's labeling.

Paragraph VII of the proposed consent order governs proposed respondents' notification, termination, and monitoring requirements with respect to BST distributors. Proposed respondents are required to send a letter to distributors that informs them that it is against the law to make false claims about any BST product or program or to make health-related claims about any product or program of BST that are not substantiated by competent and reliable scientific evidence. The letter further states that distributors must agree not to use, rely on, or distribute any advertising or make oral representations containing false or unsubstantiated claims. Further, distributors must agree to submit all advertising to BST for approval prior to dissemination. The letter informs distributors that failure to comply with these terms will result in immediate termination, and if BST believes that the distributor has made false or unsubstantiated claims it will report the violation to the Federal Trade Commission. The proposed respondents are required to have their distributors sign, date, and return the letter as a condition of remaining a distributor.

Paragraph VIII is a record-keeping provision that requires proposed respondents to maintain records of all notification letters sent to distributors, communications between respondents and distributors referring or relating to the requirements of Paragraph VII, and any other materials created pursuant to Paragraph VII of the proposed order.

Paragraph IX of the proposed consent order requires the proposed respondents to provide full refunds for a specified period of time to all purchasers of their shark cartilage capsules, uña de gato capsules, and uña de gato liquid identifiable prior to the time the respondents stopped making, and took aggressive steps to stop its distributors from making, the alleged deceptive claims.

Paragraph X of the proposed order requires the proposed respondents to provide the FTC with a monitoring report detailing the steps respondents have taken to comply with the redress requirements.

Paragraph XI of the proposed order contains record keeping requirements for materials that substantiate, qualify, or contradict claims covered by the proposed order. Paragraph XII of the proposed order requires distribution of a copy of the order to current and future officers and agents. Paragraph XIII provides for Commission notification upon a change in the corporate respondent and Paragraph XIV requires Commission notification when the individual respondent changes his business or employment. Paragraph XV requires the proposed respondents to keep and maintain all records demonstrating compliance with the terms and provisions of the order. Paragraph XVI provides for the termination of the order after twenty (20) years under certain circumstances.

The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.