Markets Wired

Marketers who pitched homeopathic HCG drops as a quick and easy way to lose substantial weight have agreed to pay $1 million to settle Federal Trade Commission charges that their weight-loss claims were deceptive and not supported by scientific evidence. The defendants have stopped selling HCG Platinum drops, and under the settlement, Kevin Wright and his Utah-based companies, HCG Platinum, LLC and Right Way Nutrition, LLC, are banned from making similar weight-loss claims in the future.

The settlement marks the second time this year the FTC has taken legal action against marketers of HCG weight-loss products. In January, a company called HCG Diet Direct settled similar charges brought by the FTC.

“Fad weight-loss products like HCG drops come and go, but consumers shouldn’t be fooled by their empty promises,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The foundation of successful weight loss is to eat a healthy diet and to increase physical activity.”

HCG, or human chorionic gonadotropin, is a hormone produced by the human placenta that for decades has been falsely promoted for weight loss. In November 2011, Wright and six other HCG marketers received warning letters issued jointly by FDA and FTC staff, advising them that their products are mislabeled drugs under the Federal Food, Drug, and Cosmetic Act, and warning that it is illegal to make weight-loss claims that are not supported by competent and reliable scientific evidence.

Selling the products at GNC, Rite Aid, Walgreens, and on their own websites, Wright and his companies promised consumers that HCG Platinum drops would cause rapid and substantial weight loss, and that consumers likely would lose as much as 43 and even 50 pounds, as claimed in product testimonials.

The defendants, who also made claims on Facebook, on product packaging, and in Internet pop-up ads and magazines, directed consumers to place the HCG drops under their tongues before meals and stick to a very low calorie diet. The defendants marketed two of their three formulations as “homeopathic,” meaning the listed ingredients were diluted to the point they were undetectable. They typically charged between $60 and $85 for a 30-day supply of all three formulations, and sold approximately $10 million of the products from 2010 to earlier this year, when they were sued.

The settlement bans the defendants from making a number of specific weight-loss claims about any over-the-counter drug, patch, cream, wrap, or any other product. It also requires the defendants to substantiate any future claims that using a product causes weight loss, rapid weight loss, or a specific amount of weight loss or that consumers can expect to lose as much weight as the product’s endorser, unless they have at least two adequate and well-controlled human clinical studies. Claims regarding the health benefits, safety, performance, or efficacy cannot be made unless they are not misleading and are substantiated by competent and reliable scientific evidence. The defendants also are barred from misrepresenting the results of any scientific study.

The order also imposes a $10 million judgment, representing all net sales of HCG Platinum drops, which will be suspended, provided the defendants pay the FTC $1 million. If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgment will become due.

Information for Consumers

Consumers should carefully evaluate advertising claims for weight-loss products. For more information, see the FTC’s guidance for consumers of products and services advertised for Weight Loss & Fitness. Consumers also should be skeptical of advertisements that tout HCG in any form as a weight-loss treatment. For more information see the FDA video, Being Fooled by Empty Diet Promises.

The Commission vote authorizing staff to file the proposed stipulated final judgment and order was 5-0. Chairwoman Ramirez and Commissioner Brill issued a joint supporting statement, Commissioner Ohlhausen issued a concurring statement, and Commissioner Wright issued a concurring statement.

The proposed final order was filed in the U.S. District Court for the District of Utah, Central Division, and signed by the judge on December 9, 2014.

Defendants in the case include: 1) Kevin Wright, HCG Platinum LLC, and Right Way Nutrition, LLC; and 2) relief defendants Weeks Holdings, LLC; Primary Colors, LLC, KMATT Holdings, LLC; Nutrisport Holdings, LLC; Julie Mattingly; Ty D. Mattingly; and Annette Wright. The relief defendants will be dismissed from the case once the defendants pay $1 million to the FTC.

The FTC is a member of the National Prevention Council, which provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices. This case advances the National Prevention Strategy’s goal of increasing the number of Americans who are healthy at every stage of life. 

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers 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, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.