Markets Wired

Dietary supplement marketers must run more frequent and prominent advertising disclosures after violating a court order entered against them two years ago. The original order settled Federal Trade Commission charges that the defendants deceptively marketed their dietary supplements, sublingual sprays, and other products. Despite the order’s specific requirements on how to disclose that the programs were paid advertisements, the companies aired a number of television and radio infomercials that did not make the proper disclosures.

According to the FTC, the defendants violated the court order by failing to include clear, audible, and properly placed disclosures that the programs actually were paid advertisements. For example, the defendants failed to run required “paid advertising” disclosures immediately before product-ordering instructions. At times, the disclosures were too small or onscreen too briefly to be read by consumers.

The court order entered today against Great American Products, Inc., Physician’s Choice, Inc., and Stephen Karian modifies the previous order by imposing the following requirements:

• The defendants must display a visual paid advertising disclosure continuously throughout the ordering instructions during television advertisements.
• The defendants must broadcast a supplemental audio paid advertising disclosure simultaneously with the initial visual disclosure (in the first 30 seconds of the advertisement, for a period of at least 10 seconds), clearly and audibly, in a cadence sufficient for the ordinary consumer to hear and comprehend, and in a volume as loud or louder than the loudest statement in the advertisement.
• The audio paid advertising disclosure for a radio advertisement must be as loud or louder than the loudest statement in the advertisement, and the defendants must make the disclosure immediately prior to ordering instructions.

The Commission vote to authorize the staff to file the stipulated final order was 5-0. The stipulated final order for permanent injunction was entered on January 23, 2008, by the U.S. District Court for the Northern District of Florida.

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

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.