Markets Wired

The Federal Trade Commission has asked a federal district court to order the marketers of Ab Force to return money to consumers who purchased their belts based on the marketers’s advertising claims. The ads made false and unsubstantiated claims that using their electronic muscle stimulation belt caused weight loss and well-defined abdominal muscles, and was an effective alternative to regular exercise.

In 2002, the marketers advertised “Ab Force” using visual images of well-sculpted, gym-clothed bodies wearing the Ab Force device, with verbal references to other, more expensive ab belts that were sweeping the nation at the time. The FTC alleged that through the product name, text and visual images, and by comparing their product to “those fantastic electronic ab belt infomercials on TV,” the defendants made false and unsubstantiated claims about the product’s abilities.

In 2005, the Commission upheld an administrative law judge’s ruling that the marketers violated federal law by making the deceptive claims, and that they intended to convey those deceptive claims, even though the marketers knew that they did not have substantiation. After the marketers appealed, the Fourth Circuit Court of Appeals upheld the decision on August 7, 2006.

Now, the FTC is seeking money back for consumers who purchased the belts from the marketers: Telebrands Corp., TV Savings, L.L.C., and Ajit Khubani. They sold more than 700,000 Ab Force belts and accessories, earning approximately $16 million. The FTC is also alleging that Ajit Khubani unlawfully transferred assets to his wife, Poonam Khubani. The FTC’s case names her as a relief defendant – someone who is not accused of wrongdoing, but who has allegedly received ill-gotten gains, and does not have a legitimate claim to them. The FTC is seeking full redress for consumers who purchased the ab belts, with money from the companies and Khubani, as well as the funds transferred to Khubani’s wife.

The Commission vote to authorize staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of New Jersey.

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.