Markets Wired

Marketers of dietary supplements and health-related devices have agreed to pay $3 million in consumer redress to settle Federal Trade Commission charges that they deceptively claimed their products treated or prevented a wide variety of serious diseases and medical conditions.

The challenged products included an infrared sauna sold to treat cancer; and a variety of nutritional supplements sold to treat, reduce the risk of, or prevent various health conditions, including cancer, HIV/AIDS, diabetes, strokes and heart attacks, Alzheimer’s disease, Parkinson’s disease, arthritis, multiple sclerosis and other autoimmune diseases, ulcers, herpes, asthma, and glaucoma. The marketers sold their products on their Web site and in print materials, but their main advertising vehicle was a nationally broadcast, live, hour-long, call-in radio program titled “The Truth About Nutrition.”

The FTC’s complaint charges one company, Roex, Inc., and two individuals, Rodney H. Burreson and Mark Alexander, with making false or unsubstantiated advertising claims. The complaint also charges that the defendants falsely claimed that one product, Colostrum, was scientifically proven to be an effective treatment for AIDS.

Under the agreed-upon final order, the defendants are barred from making any of the claims the FTC challenged in this suit unless they are true, non-misleading, and substantiated by competent and reliable scientific evidence. The defendants also are barred from making efficacy or safety claims about any drug, food, dietary supplement, or device unless the claims are true, non-misleading, and substantiated by competent and reliable scientific evidence. Finally, the defendants are barred from misrepresenting the results of any test or study while advertising or selling any covered product or service. The order also contains various record keeping provisions to assist the FTC in monitoring the defendants’ compliance. Roex, Inc. is based in Irvine, California; Burreson is the President and CEO and Alexander is the Director of Consumer Education and its Director of Research and Development.

The Commission vote authorizing the staff to file the complaint and agreed-upon final order was 3-1, with the dissenting vote cast by Commissioner J. Thomas Rosch. “I respectfully dissent on the grounds that I believe the monetary relief in this consent decree does not reflect the seriousness of the conduct involved,” Rosch said.

These documents were filed in the U.S. District Court for the Central District of California on March 4, 2009.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant or respondent has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated order requires approval by the court and has the force of law when signed by the 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 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(Roex NR.wpd)
(FTC File No. 072-3076)