Markets Wired

Marketers of a weight-loss patch have agreed to pay $110,539 to settle Federal Trade Commission charges that they violated two 2004 consent orders by continuing to make false claims that their product causes substantial weight loss and weight loss in all users. After agreeing to the 2004 consent orders, the marketers continued making the same bogus claims they had made previously, but this time they targeted consumers abroad. They made these claims in brochures accompanying shipments of the patches that were intended for sale to overseas consumers.

In 2004, Advanced Patch Technologies (APT), its distributor, Buckhead Marketing & Distribution LLC (Buckhead), and their officers, settled FTC charges of deceptive marketing based on their claims that, among other things, the “Peel Away the Pounds” patch would cause substantial weight loss when applied to the skin. That settlement required the defendants to pay more than $1 million in consumer redress.

Together, the two new modified final orders cover APT and its president, Salomon Btesh; and Buckhead, its former co-CEO, Ralf Leszinski, and Buckhead’s successor Worldwide Excellence, Inc. These orders resolve FTC allegations that after agreeing to the 2004 consent orders, the defendants continued to engage in deceptive marketing by selling the patches, along with brochures containing prohibited claims, to a third party for resale overseas.

Under the terms of the new settlement agreements, APT and Buckhead will forfeit, or disgorge, $67,471.50 and $43,068, respectively. These amounts represent the estimated profits these companies made from selling their weight-loss patches, with brochures containing the prohibited claims, since they agreed to the 2004 consent orders. The total amount will be paid to the U.S. Treasury.

Also under the new settlements, the defendants are barred from: selling any transdermal weight-loss products; advertising that any product causes substantial weight loss in all users; and making unsubstantiated claims for any product, service, or program that purportedly provides health benefits. The defendants also are prohibited from assisting others in doing any of these things.

Both settlements also contain various record-keeping and reporting provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote authorizing the staff to file the modified final orders was 4-0. These documents were filed in U.S. District Court for the Northern District of Georgia on September 22, 2008.

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.

(Patch NR.wpd)
(FTC File No. X040035)
(Civil Action No. 1:04-CV-0670)