Markets Wired

An Administrative Law Judge has upheld Federal Trade Commission staff charges against a company and its officer for making deceptive claims that shark cartilage and herbal formulations prevent, treat, and cure cancer, and heal the effects of chemotherapy and radiation. After an administrative trial, the judge ordered the marketers to stop making false and unsubstantiated claims.

“[The] respondents did not possess or rely upon competent and reliable scientific evidence to substantiate their claims,” Chief Administrative Law Judge D. Michael Chappell wrote in his decision.

In September 2008, the FTC staff charged the company, Daniel Chapter One, and its officer James Feijo with deceptive advertising. Their operation was one of 11 challenged in Operation False Cures, a law enforcement sweep aimed at peddlers of phony cancer remedies.

In his decision, Judge Chappell ordered Daniel Chapter One and Feijo not to advertise that their supplements inhibit tumor formation or growth; eliminate tumors; treat or cure cancer; or heal the effects of radiation or chemotherapy unless the claim is true, non-misleading, and based on reliable scientific evidence. He also ordered them to notify customers who bought the products that the advertising claims made were false or unsubstantiated; and not to sell or otherwise disclose identifying information about the customers. In addition, the order prohibits health claims about any dietary supplement, food, drug, or other health-related product or service unless the claims are substantiated by competent and reliable scientific evidence.

The order also contains standard reporting and record-keeping provisions to allow the agency to monitor compliance.

The judge’s initial decision in this matter is subject to review by the full Commission on
its own motion or at the request of any party. The initial decision will become the final decision of the Commission 30 days after it is served on respondents, unless either they file a timely notice of appeal or the Commission places the case on its own docket for review.

Copies of the public version of the initial decision by the administrative law judge are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

(FTC File No. 082-3085; Docket No. 9329)