Markets Wired

The marketers of dietary supplements that purportedly prevented and treated diabetes have settled Federal Trade Commission charges that they engaged in deceptive advertising practices. According to the FTC’s complaint, Glucorell, Inc. and Anafit, Inc., both based in Orlando, Florida, made false and unsubstantiated claims that two dietary supplements, Insulow and Glucorell R, are effective for preventing and treating diabetes.

Along with statements in their ads such as “Insulow® may be the only thing between you . . . and a needle,” the defendants also made unsubstantiated claims that Insulow prevents or reduces the risk of developing Type 2 diabetes; is an effective treatment for Type 1 and Type 2 diabetes; lowers high blood sugar levels; prevents or reverses insulin resistence; increases fat loss and decreases insulin-related obesity; and enables diabetics to reduce or eliminate the amount of drugs and insulin required to keep blood sugar levels healthy and reduce insulin resistance, according to the complaint. The Commission also alleged that the defendants falsely advertised that all of these claims except the last had been proven by clinical studies.

The complaint also alleges that the defendants made unsubstantiated claims about Glucorell R. The defendants’ advertisements allegedly claimed that Glucorell R is effective for treating Type 2 diabetes, prevents or reduces the risk of developing Type 2 diabetes, and is effective in treating and preventing cancer. According to the complaint, the defendants also falsely advertised that the last two Glucorell R claims were proven by clinical studies.

According to papers filed with the court, Glucorell, Inc. has been primarily responsible for packaging, distributing, and selling Insulow, and has marketed both supplements; while Anafit, Inc., has been responsible for packaging, distributing, selling, and marketing only Glucorell R.

Under the terms of the order approved by the U.S. District Court for the Middle District of Florida on October 27, 2008, the defendants are prohibited from making the claims challenged in the complaint unless such claims are truthful, not misleading, and substantiated by competent and reliable scientific evidence. The defendants are also prohibited from making representations about the benefits, performance, or efficacy of any dietary supplement, food, or drug without competent and reliable scientific evidence.

The order contains a judgment of $493,545, which is the total amount the defendants received in sales for Glucorell R and Insulow between January 2005 and May 2008. However, the entire judgment is suspended due to their inability to pay. If it is determined that the financial information given to the FTC was untruthful, then the full amount of the judgment will automatically become due.

The complaint also names two of the companies’ principals, Laurence Berube and Jerel Scott Ferguson, as defendants. Both individuals have agreed to the terms of the stipulated order.
The order contains various record keeping provisions to assist the FTC in monitoring the defendants’ compliance.

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 final 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.

(Gluco NR.wpd)
(FTC File No. 072-3180)
(Civil Action No. 6:08cv-1649-Orl-35KRS)